According to Zhitong Finance APP, Guosheng Securities released a research report stating that, according to Xinxinmu Network, in the third week of August, the average prices of fast-growing, medium-growing, and slow-growing yellow feather broilers were 10.84 yuan/kg, 12.68 yuan/kg, and 15.24 yuan/kg respectively, with year-on-year increases of +5.9%, +5.0%, and +5.0%. Yellow chicken prices have risen for five consecutive weeks. According to the forecast from Xinxinmu Network, on the supply side, the supply of medium and fast-growing types has significantly decreased, leading to shortages in the market, while the sales of high-end genuine products are smooth, and non-standard products are still being processed, but there is a strong sentiment for price increases. On the demand side, consumption is driven by graduation banquets, market demand is improving, and preparations for the Mid-Autumn Festival and National Day are gradually starting, boosting overall sales.

Guosheng Securities' main viewpoints are as follows:

Yellow Chicken Prices Continue to Rise

According to Xinxinmu Network, in the third week of August, the average prices of fast-growing, medium-growing, and slow-growing yellow feather broilers were 10.84 yuan/kg, 12.68 yuan/kg, and 15.24 yuan/kg respectively, with year-on-year increases of +5.9%, +5.0%, and +5.0%. Yellow chicken prices have risen for five consecutive weeks. Based on LIHUA's cost of 11 yuan/kg, assuming the weight of a single yellow feather broiler is 2.2 kg, the profit per bird has been restored to 3.7 yuan.

Guosheng Securities believes that the previous low prices may have stimulated some production cuts in the industry, combined with seasonal demand driving the upward price trend. According to the forecast from Xinxinmu Network, on the supply side, the supply of medium and fast-growing types has significantly decreased, leading to shortages in the market, while the sales of high-end genuine products are smooth, and non-standard products are still being processed, but there is a strong sentiment for price increases. On the demand side, consumption is driven by graduation banquets, market demand is improving, and preparations for the Mid-Autumn Festival and National Day are gradually starting, boosting overall sales.

Guosheng Securities stated that even considering the industry's replenishment cycle, this round of prosperity may last for about one quarter, and the sector may see a warming of the fundamentals. It is recommended to pay attention to leading yellow chicken stocks such as WENS (300498.SZ) and LIHUA (300761.SZ).

Pig Farming

This week, the national price for lean meat pigs was 13.71 yuan/kg, down 0.2% from last week. Current valuations are still relatively low, and attention should be paid to leading stocks with highlighted valuation and cost-performance ratios, as well as low-cost high-growth targets, including MUYUAN (002714.SZ), WENS, Dekang Agriculture (02419), Shennong Group (605296.SH), Juxing Agriculture (603477.SH), New Hope (000876.SZ), and LIHUA.

Poultry Farming

For white feather chickens, the price of live chickens this week was 7.33 yuan/kg, up 1.8% from last week; the average price of chicken products this week was 8.75 yuan/kg, down 0.6% from last week. The price of broiler chicks this week was 3.58 yuan each, unchanged from last week. White chicken prices have been low for a long time, and attention should be paid to the price reversal after sentiment recovery. It is recommended to focus on Yisheng (002458.SZ), Shengnong Development (002299.SZ), Hefeng (603609.SH), Xiantan (002764.SZ), and Minhe (002234.SZ). For yellow feather broilers, as yellow chicken production capacity continues to adjust, it is recommended to pay attention to seasonal price elasticity opportunities and focus on LIHUA Planting and Agricultural Products

The approval of genetically modified varieties has been finalized, and after the public announcement period, it will officially enter commercial sales. Subsequently, with the gradual confirmation of actual transaction prices, profit distribution, and the new season's breeding and seed production, the growth potential and realization timeline of industry companies are worth looking forward to.

Breeding Support

The price fluctuations of agricultural products upstream and downstream have intensified, and livestock and poultry prices have not yet entered a stable prosperity cycle. Leading feed companies, relying on procurement, scale, capital, and industrial chain advantages, are expected to replace small and medium-sized feed companies. Attention should be paid to Haida Group (002311.SZ) and Hefeng Co., Ltd.; in terms of vaccines, attention should be paid to the recovery of prosperity in the following quarters.

Risk Warning

Risks of agricultural product price fluctuations, epidemic risks, policy risks, industry competition, and product risks