CICC: Pig Industry Leader Growth and Value Attributes Double Rise, China's Agricultural Science and Technology Ushers in a New Narrative of AI Empowerment

The Zhitong Finance App learned that CICC released a research report saying that looking ahead to 2026, industrial changes such as the “new paradigm of the pig industry” and the “golden age of the pet economy” will continue. Pig industry leaders will grow and value attributes will both rise, and pet industry leaders will break through the middle of the market with high-end brand matrices. Furthermore, the “Age of Discovery” of China's agriculture and animal husbandry industry has begun, and new AI-enabled narratives of China's agricultural science and technology, such as “machine replacement,” have also reached an inflection point.

CICC's main views are as follows:

Looking ahead to 2026, we judge that industrial changes such as the “new paradigm of the pig industry” and the “golden age of the pet economy” will continue. Pig industry leaders will grow and value attributes will both rise, and pet industry leaders will break through the middle ground with high-end brand matrices. Furthermore, the “Age of Discovery” of China's agriculture and animal husbandry industry has begun, and new AI-enabled narratives of China's agricultural science and technology, such as “machine replacement,” have also reached an inflection point.

Cycle: The pig industry strengthens a new paradigm, and China's agriculture and animal husbandry industry begins the Age of Discovery. We think 1) Pigs: The characteristics of the new paradigm have continued throughout, leading growth and value attributes have both increased. On the price side, we estimate the characteristics of a new paradigm where pig prices may continue to converge and fluctuate in 26 years. The price center declined, the pace was suppressed and then raised, and efficient leaders are expected to maintain annual profits. On the management side, pig companies have begun a new paradigm of growth of reducing costs, increasing value, and expanding overseas, and the launch of enterprises has remained stable. On the investment side, core leaders balance growth and value, and are expected to continue leading the way. 2) Broiler: Relaxed supply, leading players that seize the advantages of breeding sources, channels, and brands are expected to increase operating premiums. 3) Feed: The domestic value of leading aquatic products and the overseas growth logic continue to strengthen. It is expected that in 26 years, leading feed companies will increase their share of high-quality domestic products, and accelerate the beginning of the global age of exploration. 4) Agricultural products: The supply and demand pattern has improved marginally, and food prices are expected to bottom out.

Consumption: The pet economy is at the center stage, and product innovation and channel efficiency determine victory or loss. We think 1) Pet food: competition reaches the middle ground, high-end innovation breaks the game. As the industry shifts to high-quality growth, superimposing capital and increasing investment in the industry, the margin of competition intensifies. With the scale, brand power, and supply chain integration advantages accumulated during the historical opportunity period, leading domestic goods companies may accelerate share growth and high-end brand matrices. Short-term revenue growth is excessive, and long-term profit margins can be expected to recover. 2) Pet medicine: Undertake the growth of pet food relays, and the capital competition returns to business competition. The industry is shifting from horse racing to improving quality and efficiency, and the chain rate is increasing. Leaders with reasonable business models are expected to lead the way. 3) Brand agriculture: Iterative channel efficiency boosts the profits of traditional kitchen food categories and helps create new single products for fresh corn.

Technology: Machine replacement, smart agriculture. China's agricultural science and technology ushered in a new narrative empowered by AI. 1) Intelligent agricultural equipment: Through the deep integration of drones, robots, AI and big data, labor costs have increased and machine costs have been reduced. An intelligent ecosystem covering the entire process of “cultivation, planting, management, and harvesting” of agriculture is being formed, and the inflection point of “machine replacement” in agricultural production has reached. 2) Seed industry: Increased expansion of biological breeding combined with weakening factors dragging down food prices, sector profits can be expected to be realized. 3) Smart agriculture: AI empowers important agricultural scenarios and enters a stage of rapid development.