China Merchants Securities: Post-Holiday White Chicken Prices Decline Slightly, Yellow-Feathered Chickens Still Have Good Profitability

China Merchants Securities releases a research report stating that in February, chicken supply was relatively sufficient, but post-holiday demand was limited, leading to a gradual slight decline in chicken prices after the Spring Festival. Due to previously low costs for chicks, the breeding sector still maintained certain profits. The prices of chicken products significantly outperformed previous years. After the holiday, chick supply was limited, and breeding enterprises showed a strong willingness to maintain prices, supporting the upward trend in chick prices. During the Spring Festival, catering and household consumption of yellow-feathered chickens improved, especially with steadier slow-growing chicken prices before the holiday, while fast-growing chickens remained profitable during the holiday period. Currently, the cost of raising yellow-feathered broilers has fallen to a low level, with leading breeding companies’ per-head profit reaching around 2 yuan in February, and the outlook for high prosperity in yellow chickens continuing into 2026.

Main points from China Merchants Securities:

White-feathered Chicken: Prices fell after the holiday, but chicken product prices significantly outperformed previous years

In February, the average price of live chickens in main production areas was 7.49 yuan/kg, up 24% year-on-year but down 1.9% month-on-month; the average price of chicks was 2.52 yuan per bird, up 19.2% year-on-year and 4.4% month-on-month; the average price of chicken products was 9,300 yuan/ton, up 2.8% year-on-year and 0.5% month-on-month; the average profit per bird for breeders was a loss of 0.02 yuan. This month, chicken supply was relatively ample, but post-holiday demand was limited, causing prices to gradually decline after the Spring Festival. Due to previously low chick costs, the breeding sector still enjoyed certain profits; chicken product prices were notably better than in previous years. Chick supply was limited after the holiday, and breeding enterprises showed a clear willingness to maintain prices, supporting the upward trend in chick prices.

In 2025, China’s import volume of grandparent breeding chickens is expected to decrease by over 10% year-on-year. Additionally, outbreaks of avian influenza occurred in France’s main breeding regions of Maine-et-Loire and Morbihan in November-December 2025, further impacting domestic imports. The outlook for the breeding sector remains optimistic.

Yellow-feathered Chicken: Catering and household consumption both boost, significant improvement in profitability

In February, the average price of fast-growing chickens was 4.24 yuan/jin, down 13.4% year-on-year and 12% month-on-month; the average price of Xueshan grass chickens was 7.93 yuan/jin, down 5% year-on-year but up 3.3% month-on-month. During the Spring Festival, consumption of yellow-feathered chickens in catering and households improved, especially with steadier slow-growing chicken prices before the holiday, while fast-growing chickens remained profitable during the holiday period.

Considering capacity, current parent-generation capacity has fallen to historically low levels. Coupled with industry losses lasting over half a year in 2025, capacity reduction is expected to continue, laying the foundation for rising chicken prices. Since Q4 2025, yellow-feathered chickens have entered an upward cycle, with significant price recovery and high-quality companies experiencing both volume and price increases. Currently, the cost of raising yellow-feathered broilers has fallen to a low level, with leading breeding companies’ per-head profit reaching around 2 yuan in February, and the outlook for high prosperity in yellow chickens continuing into 2026.

The breeding sector for white-feathered chickens is improving, and yellow chickens may generate profits in 2026

1. White-feathered Chicken: In 2025, China’s import volume of grandparent breeding chickens is expected to decrease by over 10% year-on-year. Additionally, outbreaks of avian influenza occurred in France’s main breeding regions of Maine-et-Loire and Morbihan in November-December 2025, further affecting import prospects. The breeding sector is expected to remain strong in 2026, which will also influence the supply of commercial chicken chicks. The outlook for the breeding sector remains positive. Key recommendation: Shengnong Development (002299.SZ).

2. Yellow-feathered Chicken: Current parent-generation stock has fallen to historically low levels. Coupled with industry losses lasting over half a year in 2025, supply contraction will support subsequent price increases. Since Q4 2025, yellow chickens have entered an upward cycle, with significant price recovery and high-quality companies experiencing both volume and price growth, with excellent per-head profits. The high prosperity of yellow chickens is expected to continue into 2026. Key recommendations: Lihua Co., Ltd. (300761.SZ), Dekang Agriculture & Animal Husbandry (02419).

Risk Tips

• Chicken price fluctuations exceeding expectations;
• Performance of listed companies’ sales and costs below expectations;
• Sudden large-scale uncontrollable disease outbreaks;
• Feed raw material price volatility beyond expectations;
• Major food safety incidents.