Shenwan Hongyuan Group Co., Ltd. released a research report stating that on September 14, the national average selling price of live pigs (Duroc×Landrace×Yorkshire) was 13.27 yuan/kg, down 2.5% week-on-week. This week, the national average selling price of weaned piglets was 294 yuan/head, dropping 29 yuan/head week-on-week, hitting a new low for the year. The average selling price of breeding sows was 1,595 yuan/head, down 1 yuan/head week-on-week, also reaching a new yearly low. The weakness in piglet and sow prices reflects the industry's pessimistic expectations for pig prices in 2026. Recently, expectations for upgraded policy regulations against industry involution have resurfaced, with potentially clearer capacity restrictions and methods for large-scale enterprises. The focus should be on the "anti-involution" process in the pig breeding industry.

Shenwan Hongyuan's main viewpoints are as follows:

**Pig Breeding**: Expectations for upgraded capacity regulation resurface, focus on industry "anti-involution" process and grasp certainty of leading pig enterprises' value revaluation

This week, pig price decline accelerated. According to Yongyiconsulting data, on September 14, the national average selling price of live pigs (Duroc×Landrace×Yorkshire) was 13.27 yuan/kg, down 2.5% week-on-week. This week, the national average selling price of weaned piglets was 294 yuan/head, dropping 29 yuan/head week-on-week, hitting a new low for the year. The average selling price of breeding sows was 1,595 yuan/head, down 1 yuan/head week-on-week, also reaching a new yearly low. The weakness in piglet and sow prices reflects the industry's pessimistic expectations for pig prices in 2026.

Looking forward, even without considering the effects of anti-involution policies, this round of endogenous capacity expansion cycle in the pig breeding industry is nearly over, and industry capacity is expected to gradually decline in the second half of 2025. Shenwan Hongyuan believes that expectations for upgraded anti-involution policy regulations have resurfaced recently, with potentially clearer capacity restrictions and methods for large-scale enterprises. Focus should be placed on the "anti-involution" process in the pig breeding industry. Industry capacity is expected to enter a stage of steady, high-quality development, with both profit centers and profit stability for enterprises expected to improve significantly, bringing valuation reratings for quality pig enterprises.

Recommended stocks: Muyuan Foods Co., Ltd. (002714.SZ), DEKON AGR (02419), Wens Foodstuff Group Co., Ltd. (300498.SZ), Shennong Group Co., Ltd. (605296.SH), Juxing Agriculture and Husbandry Co., Ltd. (603477.SH), etc.

**Broiler Breeding**:

White Feather Broilers: Prices across the industrial chain return to weakness According to Mysteel data, this week the average selling price of white feather broiler commercial day-old chicks was 3.26 yuan/head, down 1.21% week-on-week; the average selling price of white feather live broilers was 3.45 yuan/kg, down 1.15% week-on-week, and the average selling price of chicken cuts was 8,687.95 yuan/ton, down 0.09% week-on-week.

Shenwan Hongyuan believes that the seasonal rebound in July-August has concluded, and abundant white chicken supply remains the theme for 2025. At the bottom, focus on leading enterprises' own development and long-term value. Recommended stock: Sunner Development Co., Ltd. (002299.SZ).

Yellow Feather Broilers: "Golden September, Silver October" is materializing, focus on related companies' Q3 earnings inflection points. According to Mysteel data, on September 12, the national average selling price of yellow feather broilers was 5.75 yuan/jin, down 0.3% week-on-week, maintaining high levels for the year. Since July, yellow feather broiler prices have rebounded significantly, with "Golden September, Silver October" materializing, rebounding nearly 45% from the bottom of around 4 yuan/jin in late June. In August, the industry overall turned profitable, and September profitability is expected to improve further. Focus on related companies' Q3 earnings inflection points.

Recommended stocks: Lihua Animal Husbandry Co., Ltd. (300761.SZ), Wens Foodstuff Group Co., Ltd.

**Pet Food**: August 2025 Pet Food Online Data Tracking

In August, pet food sales across Tmall, JD.com, and Douyin platforms totaled 2.34 billion yuan, up 8% year-on-year and 19% month-on-month. Cumulative sales from January to August 2025 were 19.21 billion yuan, up 11% year-on-year.

Listed company performance: ①Gambol Pet: August combined GMV up 15% year-on-year and 12% month-on-month, with Myfoodie and Flegetanis up 2% and 59% year-on-year respectively. ②Zhongpet Co., Ltd.: August combined GMV up 27% year-on-year and 21% month-on-month, with Wanpy, Zeal, and Luscious up 33%, -19%, and 39% year-on-year respectively. ③Pettechs Co., Ltd.: August combined GMV up 20% year-on-year and 10% month-on-month, with Jue Yan and Homate up 27% and -32% year-on-year respectively.

From January to August 2025, Gambol Pet, Zhongpet Co., Ltd., and Pettechs Co., Ltd. held online market shares of 10%, 2%, and 1% respectively.

Leading domestic brands: In August, Blue's, Honest Kitchen, and Fresh Lang were up 42%, 33%, and 27% year-on-year respectively.

Leading overseas brands: In August, Pro Plan, Royal Canin, and Orijen were up 45%, 28%, and 17% year-on-year respectively.

**Risk Warnings** Sustained weakness in pig and broiler prices; domestic pet food brand sales falling short of expectations; outbreak of breeding diseases.