Understanding the Market | Pork Concept Stocks Continue to Rise; Breeding Sow Inventory Falls Below Normal Retention Level; Capacity Reduction Accelerates Marginally in October

Zhitong Finance APP learned that pork concept stocks continued to rise. As of press time, DEKON AGR (02419) rose 4.53% to HK$59.95; COFCO JOYCOME (01610) rose 3.06% to HK$1.18; and MUYUAN (02714) rose 0.62% to HK$39.02.

In terms of news, data from the National Bureau of Statistics showed that the national inventory of breeding sows at the end of the third quarter was 36.02 million head, falling below the normal retention level of 37.5 million head for the first time. This represents a year-on-year decrease of 4.33 million head, or 10.7%, indicating substantial progress in capacity reduction. Data from Mysteel samples showed that the inventory of breeding sows in October 2026 decreased by 1.57% month-on-month, with the decline widening by 0.71 percentage points compared to September, marking the ninth consecutive month of month-on-month decline.

Notably, statistics show that the combined Net Profit Attributable To Parent Company for 13 listed pig farming enterprises in the third quarter totaled -RMB 6.947 billion, turning to a loss year-on-year, while the industry's average asset-liability ratio rose to 62.98%. Kaiyuan Securities pointed out that whether profitability during the peak season for piglets in the first half of 2027 can repair cash flow is a key observation point. If profitability only recovers to near the break-even point, production cuts may continue; if losses persist, active capacity reduction may accelerate further.