GF Securities: Listed companies listed in September increased year-on-year, and overall sales of piglets declined month-on-month

The Zhitong Finance App learned that GF Securities published a research report saying that the listing of listed companies increased year-on-year in September, and overall sales of piglets declined month-on-month. Considering the marked decline in the number of piglets born in the first half of the year, adding that the fourth quarter is the traditional peak consumption season, pig prices are expected to continue to maintain strong performance in the fourth quarter. Currently, 7 kg piglets have fallen below 300 yuan/head in some regions. Side effects suggest that the industry is pessimistic about pig price expectations after the Spring Festival next year, and enthusiasm for filling up the list has declined markedly. It is expected that the industry's sow storage will resume relatively slowly, and the industry boom is expected to continue significantly longer. Benefiting from stronger pig prices and a marked decline in breeding costs, it is estimated that pig companies performed well in the 3rd quarterly report. Currently, sector valuations are at a historically low level.

Pig prices rebounded in early October, and sow production capacity continued to slowly recover. As the impact of short-term centralized sales faded away, and the enthusiasm of some secondary fattening groups increased, pig prices have rebounded to around 18 yuan/kg since early October. Currently, overall farming profits are still in a good profit range. According to Wind data, the average profit of self-breeding and self-raising groups on October 11 was 306 yuan/head. In terms of production capacity, the current industry's sow production capacity continues to slowly recover. According to Yongyi Consulting data, the number of sows that can breed increased 0.6% month-on-month in September.

Listed company tracking: According to the monthly operating data announcements of each company, the overall number of pigs released by listed companies continued to increase year-on-year in September 2024. In terms of listing structure, overall piglet sales of listed companies declined month-on-month. (1) Release volume: In September, the total number of commercial pigs released by listed companies was 12.14 million, a decrease of 4.07% from the previous month and an increase of 1.66%; after excluding Muyuan, the total number of commercial pigs released by listed companies was 6.785 million, an increase of 5.74% over the previous year and an increase of 3.24% over the previous year. In the first 3 quarters of 24, the number of commercial pigs released by listed companies increased by 4.3% year on year; after excluding Muyuan, the number of commercial pigs released by listed companies increased by 2.3% year on year.

Among them, Muyuan Co., Ltd., Wen's Co., Ltd. and New Hope listed 5.358 million commercial pigs in September, respectively, down 14.1%, 6.6%, and 6.7% from the previous month; in the first three quarters, Muyuan Co., Ltd., Wenshi Stock, and New Hope listed commercial pigs increased 6.7%, 17.7%, and 4.9%, respectively. In terms of small and medium-sized breeding enterprises, in September, Tang Renshen, Tiankang Biology, and Huatong Co., Ltd. listed 320,000 commercial pigs, respectively, up 5.5%, 17.6%, and 4.4% month-on-month; in the first 3 quarters, the cumulative number of commercial pigs released by Tang Renshen, Tiankang Biology, and Huatong Co., Ltd. increased by 6.1%, 4.2%, and 15.9%, respectively. (2) Sales price: In September, it was estimated that the average sales price of listed companies was 18.84 yuan/kg, down 6.67% from the previous month. (3) Listing weight: In September, due to factors such as declining piglet sales, the overall listing weight of the listed companies increased month-on-month. It is estimated that the average listing weight of the 11 listed companies was about 109.8 kg/head, an increase of 3.6% over the previous month.

Investment recommendations:

Benefiting from stronger pig prices and a marked decline in breeding costs, it is estimated that pig companies' performance in the 3rd quarterly report is impressive. The current sector valuation is at a historically low level. Large enterprises focus on recommending Wen's shares (300498.SZ), Muyuan shares (002714.SZ), and focus on new hopes (000876.SZ), and small and medium-sized breeding enterprises focus on Tang Renshen (002567.SZ), and Huatong (002840.SZ).

Risk warning. The risk of pig price fluctuations, raw material price fluctuation risk, animal disease risk, food safety, etc.