The pig feed ratio hits a ten-year low, yet leading company Wen's Shares has repurchased over 700 million yuan in just half a month! When will the industry see a glimmer of hope?

Ask AI · Will Wen’s Shares Buyback Against the Market Indicate an Approaching Industry Bottom?

Meiri Economics Reporter: Yan Fengfeng Meiri Editor: Wu Yongjiu

Recently, leading aquaculture company Wen’s Shares has carried out intensive buybacks, accumulating a total of 732 million yuan in repurchased company shares within half a month. However, accompanying this is that the nationwide average price for external three-yuan pigs at slaughter has once dropped to 10.06 yuan/kg, hitting a nearly seven-year low, and the pig-to-grain ratio has also reached a ten-year low, with per-head farming losses exceeding 300 yuan.

Although the government has initiated central frozen pork stockpiling, the dual pressures of overcapacity and weak demand have pushed pig futures prices to new lows, with a decline of over 20% so far this year. Why are pig prices so weak? When will the pig farming industry see a glimmer of hope?

In response, the “Daily Economic News” reporter conducted an investigation. During this industry downturn, many institutions believe that market-driven capacity reduction caused by low prices may present investment opportunities in the sector.

Leading Aquaculture Company Wen’s Shares Buys Back 732 Million Yuan in Half a Month

According to Wen’s Shares’ April 1 announcement on buyback progress, as of March 31, 2026, the company had repurchased a total of 43.3655 million shares through centralized bidding, accounting for 0.6517% of the total share capital, with a total transaction amount of 732 million yuan (excluding transaction fees). The highest transaction price for the repurchased shares was 17.59 yuan per share, and the lowest was 16.47 yuan per share.

Notably, Wen’s Shares’ buyback activity was quite swift. The company announced this buyback plan on February 25, 2026, proposing to repurchase no less than 800 million yuan and no more than 1.2 billion yuan worth of shares, aiming to buy back 0.5% to 0.75% of its total shares, for implementation of employee stock ownership plans or equity incentives. According to the announcement, the first buyback was carried out on March 16, with a total of 96.4357 million yuan worth of shares repurchased that day. By March 31, the total buyback had reached 732 million yuan. In other words, between March 16 and March 31, Wen’s Shares repurchased 732 million yuan worth of shares in half a month. Despite this, the company’s stock price fell by 4.65% during the same period.

In fact, this is not Wen’s Shares’ first large-scale buyback. The company previously announced a buyback plan on September 18, 2024, to repurchase between 900 million and 1.8 billion yuan of shares for employee stock plans or incentives. The buyback was completed on September 17, 2025, with a total of 51.3869 million shares repurchased, accounting for 0.7723% of total share capital, with a total transaction amount of 900 million yuan, at an average price of about 17.52 yuan per share. Notably, the lowest price on the day of this buyback plan announcement was 14.47 yuan (pre-adjusted), the lowest in nearly four years for the company.

Looking at Wen’s Shares’ stock price over the past three years, it mostly traded between 16 and 20 yuan. On April 3, the stock closed at 16.31 yuan, again approaching the lower end of this range.

Pig Prices Hit Seven-Year Low, Pig-to-Grain Ratio at Ten-Year Low

Behind Wen’s Shares’ continuous buybacks is the ongoing weakness in the pig farming industry. Data from the National Bureau of Statistics shows that in 2025, the nationwide pig slaughter volume was 719.73M head, an increase of 2.4%.

The increase in pig slaughter volume has exerted significant pressure on pig prices. Data from Zhuochuang Information indicates that the average pig price in 2025 was 13.74 yuan/kg, down 17.97% month-on-month, the lowest in nearly five years.

Entering 2026, pig prices continued to decline. Monitoring data from China Swine Network shows that by the end of March 2026, the average price for external three-yuan pigs at slaughter had once fallen to 10.06 yuan/kg, hitting a nearly seven-year low.

The main contract of pig futures also hit a new historical low since listing. The pig futures main contract on the Dalian Commodity Exchange fell from 11,795 yuan/ton at the end of 2025 to a closing price of 9,370 yuan/ton on April 3, a decline of 20.5% in just about a quarter.

The continuous decline in pig prices has caused the pig-to-grain ratio (the ratio of pig prices to corn prices) to keep falling. According to the National Development and Reform Commission’s warning mechanism, when the pig-to-grain ratio drops below 5, a first-level excessive decline warning is triggered. Data from Tonghuashun shows that recently, the nationwide pig-to-grain ratio has remained below 4, and on March 30, it fell as low as 3.73, a near 10-year low. Historically, the ratio has mostly ranged between 5 and 9, with an extreme high approaching 20 in October 2019.

Under the continuous decline of pig prices, pig farming enterprises face considerable pressure. Data from Minmetals Futures shows that, based on current slaughter costs, the average loss per pig exceeds 300 yuan; meanwhile, piglet prices have rarely fallen below production costs even during peak seasons, further reflecting the pessimistic market sentiment. Zhuochuang data indicates that on March 27, the profit from self-breeding and self-rearing was -316 yuan per head, an increase in loss of 264 yuan compared to early in the year; the profit from piglet fattening was -221 yuan per head, an increase of 135 yuan in loss.

Amidst the persistent low pig prices, the central government’s frozen pork reserve work has quietly begun. On April 1, news reported that the National Development and Reform Commission, Ministry of Commerce, and Ministry of Finance will carry out the second batch of central frozen pork stockpiling this year, requiring localities to participate simultaneously to better utilize reserves for market regulation. Going forward, the departments will continue to closely monitor the pig market, increase stockpiling efforts, strengthen capacity regulation, guide farmers to plan production reasonably, and promote stable market operation.

Supported by positive news, many listed pig farming companies saw significant stock price increases on April 2, and pig futures also rebounded temporarily. However, the market’s response to the pork reserve news appears limited. By April 3, many listed pig companies’ stock prices had fallen back, and pig futures prices hit new lows again.

Low Prices Drive Market-Driven Capacity Reduction, Potentially Creating Investment Opportunities

So, why are pig prices so weak? When will the pig farming industry see a turnaround?

The main reasons are the supply peak combined with seasonal demand slowdown after the Spring Festival. In this regard, Cai Tong Securities’ research report shows that in the first quarter of 2026, the increased capacity of sows in the early stage transmitted to slaughtered pigs, combined with high slaughter weights, continuously releasing supply pressure. Meanwhile, demand was affected by the post-Festival meat consumption lull. Under the oversupply condition, pig prices kept falling. Cai Tong Securities believes that the current pig farming industry remains in a state of oversupply, and it will take some time to digest inventories. In the short term, pig prices are likely to stay at the bottom with oscillations, making a trend reversal unlikely.

Mingroup Futures’ report suggests that multiple cycles—production cycle, efficiency cycle, and cost cycle—are resonating, leading to further declines in pig prices. The production cycle is at its peak capacity, which is a critical period for price decline. Regarding efficiency and costs, after the African swine fever pandemic in 2019–2020, large amounts of capital flooded into pig farming, significantly improving production efficiency and lowering costs. Since 2023, with corn and soybean meal prices remaining low, the overall breeding costs have dropped below 12 yuan/kg. The improvements in efficiency and reductions in costs mean that even when pig prices fall, losses are not severe and may still be profitable, encouraging upstream producers to expand production. The herd size continues to grow, offsetting the decline in breeding sows, prolonging the pig cycle, and leading to excess capacity. The industry’s complete clearing is likely to occur by late 2026 or spring 2027.

However, amidst the ongoing low pig prices, many institutions see opportunities arising from capacity reduction driven by low prices.

Shanxi Securities believes that if prices remain low, it could further promote market-driven capacity reduction. Under policies aimed at “countering internal competition” in the pig industry, capacity reduction through policy regulation is also advancing. Additionally, the slope of the productivity curve of sows, represented by PSY, may slow down stage-wise. This year could see the third significant capacity reduction since 2021, potentially restoring the sector’s fundamentals and valuation.

Caitong Securities notes that the industry currently faces multiple challenges, including “bottomed pig prices, significant decline in piglet prices, and rising raw material costs,” which may accelerate the clearance of breeding sow capacity. The next upward cycle’s prosperity is worth expecting.

Disclaimer: The content and data in this article are for reference only and do not constitute trading advice. Please verify before acting. Use at your own risk.

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