Summary of Key Points
On July 1st, the livestock and poultry breeding sector saw a collective surge in performance, with the broiler chicken segment leading the gains (the chicken industry index rose by 7.2%). Leading companies in the broiler chicken sector, such as Yisheng Shares, hit daily price limits, while major pig breeding companies like Muyuan and Wen's also experienced significant increases of over 5%. The direct trigger was Yisheng Shares' announcement of a staggering profit increase of 42-47 times for the first half of 2026. The reasons behind this include a tight supply in the white-winged broiler chicken industry (due to avian influenza in France, which reduced imports of breeding stock), pig prices rising above 10 yuan per kilogram again, and a rebound from previous excessive declines (the sector had fallen by nearly 19% this year).
1. Yisheng Shares' "Performance Bomb" Sets Off the Sector
On the evening of June 30th, Yisheng Shares, a leading company in the white-winged broiler chicken industry, released its forecast: net profit for the first half of 2026 is expected to be between 270 million and 300 million yuan, representing a year-on-year increase of 4287%-4774% (an increase of 42-47 times). The non-recurring profit growth is expected to reach as high as 87 times. Why such a sharp increase? The company explained that the white-winged broiler chicken industry is experiencing booming demand, with both the volume and price of chicks rising. Avian influenza in France and other regions has led to a decrease in imports of breeding stock from abroad, resulting in a tight supply within the domestic market. The prices of parent stock chicks have been rising for three consecutive quarters and remain high, making this business segment a major source of profit for the company.
2. The Broiler Chicken Sector Leads the Gains: Tight Supply is the Core Logic
There are issues on the supply side of the white-winged broiler chicken industry: Avian influenza abroad has significantly reduced the amount of breeding stock imported, leading to a shortage of parent stock chicks in China. This in turn has caused shortages in the supply of commercial chick chicks and chicken meat, driving up prices. As a leader in the industry, Yisheng Shares holds a large inventory of high-priced parent stock chicks, which contributed to its substantial profit increase and drove its stock price to a daily limit. This positive performance has also boosted the entire broiler chicken sector.
3. The Pig Breeding Sector Benefits: Prices Finally Turn Around
Pig prices have been struggling recently: After the Spring Festival this year, they continued to fall due to overcapacity, dropping below 9 yuan per kilogram in April, causing many pig farming companies to suffer losses. However, the situation is improving now. On June 30th, the national average price for pigs was 5.06 yuan per jin (10.12 yuan per kilogram), rising above 10 yuan for the first time in several months. The increase in prices indicates that pig farming companies may see improved profits, which is why leading pig breeding stocks have also seen significant gains.
4. Rebound from Excessive Declines: Prices Have Fallen Too Much, Now It's Time for a Recovery
Since the beginning of this year, the CSI Livestock and Poultry Breeding Index has fallen by nearly 19%, with many stocks experiencing excessive declines. Market analysts believe that the recent surge is partly a recovery from these previous losses. With positive earnings and price trends, investors are entering the market to buy up discounted shares, driving stock prices higher. New Hope also stated on an interactive platform that the previous sharp decline in the pig breeding sector was due to capital preferences rather than changes in the industry's fundamentals. Now that stock prices have corrected, they are beginning to stabilize and recover.
5. Strong Industry Cycles: Investors Need to Be Cautionous about Risks
Although Yisheng Shares is performing exceptionally well this year, its financial performance is highly volatile, with revenue declining by 5.85% and net profit dropping by 67% in 2025. This highlights the cyclical nature of the livestock and poultry breeding industry: profits can soar during good times but plummet or even result in losses during bad periods. Investors should not solely focus on short-term performance and follow trends without understanding the industry's cyclical patterns to avoid being caught in a market downturn.
This analysis clearly explains the reasons for the sector's strong gains, the underlying logic of each sub-sector, and warns about potential risks. It is written in plain language, making it easy for even non-professionals to understand.