According to reports, Gf Securities has stated that the previous effects of industry expansion are gradually becoming evident. In September, pig prices experienced fluctuations and a downward trend accelerated after National Day, with the current national average dropping to approximately 11 RMB per kilogram, pushing the entire industry into a loss-making zone. The price of piglets has dropped quickly, with Junyi Consulting reporting that the price of 7-kilogram piglets at large-scale farms has fallen to 183 RMB per head, down 43.5% since early September. Considering that the next 1-2 months will continue to be a low season for replenishment, the price of piglets is expected to remain sluggish.

In terms of production capacity, the entire industry is currently operating at a loss, and coupled with the impact of the "anti-involution" policy, the reduction of pig production capacity is expected to accelerate. According to the Ministry of Agriculture, the number of breeding sows decreased by 0.1% month-on-month in August. Key insights from Gf Securities are as follows:

Tracking of Listed Companies' Slaughter Volume: Based on monthly operational data disclosed by various companies, the overall slaughter volume of listed companies in September 2025 increased on a month-on-month basis, while the slaughter volume for the first three quarters witnessed a year-on-year growth of 30.7%.

Regarding slaughter structure, demand for piglets has receded during the replenishment low season, resulting in a month-on-month decline in the sales ratio of piglets among listed companies. However, the overall average weight sold by listed companies increased by 0.7% in September.

In terms of slaughter volume, the listed companies reported a total of 14.23 million pigs slaughtered in September, down 6.3% month-on-month but up 26.3% year-on-year. Excluding Muyuan Foods, the total slaughter volume among listed companies reached 8.65 million heads, representing a month-on-month growth of 17.6% and a year-on-year increase of 38.8%. For the first three quarters, the total slaughter volume of listed companies amounted to 142.2 million heads, reflecting a year-on-year increase of 30.7%.

Specifically, in September, Muyuan Foods, Wens Foodstuff Group, New Hope Group, and Dekon Agriculture respectively slaughtered 5.573 million (excluding piglets), 3.325 million, 1.394 million, and 840,000 pigs, with changes of -20.4%, +2.5%, +4.2%, and +3.4% on a month-on-month basis, and year-on-year changes of +10.7%, +32.5%, +16.9%, and +36.4%. For the first three quarters, the cumulative slaughter volume year-on-year growth for Muyuan Foods (including piglets), Wens Group, New Hope, and Dekon Agriculture was +37.9%, +28.3%, +0.5%, and +25.8%, respectively.

Regarding small and medium-sized farming enterprises, in September, Tangrenshen, Tiankang Bio, Shennong Group, and Juxing Agriculture saw their slaughter volumes grow month-on-month by +1.2%, +1.2%, +37.6%, and +0.8%, with year-on-year changes of +28.3%, -5.3%, +15.0%, and +42.8%. For the first three quarters, the cumulative slaughter volume year-on-year growth was +34.8%, +6.5%, +26.8%, and +63.9%, respectively.

In terms of sales prices, the average selling price of the listed companies in September was estimated at 13.0 RMB per kilogram, a month-on-month decrease of 6.12%. The average slaughter weight in September for 11 listed companies was approximately 114.7 kilograms per head, showing a month-on-month increase of 0.7%.

Both fat pigs and piglets are currently operating at a loss, and the reduction in production capacity is expected to accelerate.

Investment Recommendation: The current pig farming sector is facing widespread losses, with pig prices falling below the cash costs of most enterprises; meanwhile, the sale of piglets is also at a loss. Given the current industry loss status, combined with the context of the industry "anti-involution," the stage for capacity reduction in pig production has commenced, highlighting the need to focus on industry policies, potential catalysts such as winter epidemics, etc.

In terms of stocks, the current valuations in this sector are relatively low; thus, it is advisable to select leading enterprises with cost advantages. Key recommendations include Wens Foodstuff Group (300498.SZ) and Muyuan Foods (002714.SZ), with attention on Dekon Agriculture (02419) and New Hope Group (000876.SZ). For potential operational reversals, consider focusing on Zhengbang Technology (002157.SZ) and small to medium-sized farming enterprises such as Tiankang Bio (002100.SZ), Shennong Group (605296.SH), and Tangrenshen (002567.SZ).

Risk Reminders: Price volatility of agricultural products, epidemic risks, policy risks, and food safety issues.