On September 23, 2026, Hong Kong's stock market saw structural differentiation amid volatility, with the Hang Seng Index rising 0.3% slightly, while the agricultural sector outperformed, becoming the day's core highlight. Among them, the livestock sub-sector led the industry with a 1.8% gain, with leading stocks like Muyuan Foodstuff (01610.HK), Wens Foodstuffs (0308.HK), and New Hope (0976.HK) collectively rising, driving the agricultural sector index up 1.2% and significantly outperforming the broader market. Behind this phenomenon are the continuous warming of pig cycle reversal expectations, concentrated release of policy dividends, and intensive southbound capital allocation, which together drive the agricultural sector to form an independent trend. This article will deeply analyze the dynamic logic of Hong Kong's agricultural sector, interpret the latest progress of the pig cycle, and uncover the investment code behind capital flows.
I. Daily Market: Agricultural Sector Outperforms, Livestock Stocks Become Capital Favorites
On September 23, the Hang Seng Index closed at 29,812.45 points, up 0.3% slightly, but the agricultural sector staged a "counter-trend rebound". Wind data shows the agricultural sector index (HSI_AGR) rose 1.2% that day, ranking second in gains among all industries, only behind the power sector. Among them, the livestock sub-sector performed particularly well, with Muyuan Foodstuff (01610.HK) leading with a 3.5% gain, Wens Foodstuffs (0308.HK) up 2.8%, and New Hope (0976.HK) up 2.1%. In addition, sub-sectors like seed and fertilizer also performed actively, with Longping High-Tech (0188.HK) up 1.9% and Yuntianhua (0596.HK) up 1.6%.
From a capital flow perspective, southbound capital net inflowed approximately 270 million HKD into the agricultural sector that day, with livestock stocks accounting for 65%. HKEX disclosed shareholding data shows southbound capital's stake in Muyuan Foodstuff increased by 0.3 percentage points from the previous day, while Wens Foodstuffs' stake rose by 0.2 percentage points. This data indicates that institutional investors' confidence in the agricultural sector is rapidly recovering, especially regarding pig cycle reversal expectations, prompting accelerated capital allocation.
II. Pig Cycle Reversal Signals Strengthen: Supply-Demand Improves, Profit Turnaround Nears
The pig cycle is the "core logic" of the agricultural sector, especially for livestock stocks, as its fluctuations directly determine corporate profitability and stock performance. Currently, the pig cycle's turning point signals are shifting from "expectation" to "reality".
From the supply side, live pig inventory continues to decline. Data from the Ministry of Agriculture and Rural Affairs shows that in August 2026, China's live pig inventory was 408 million heads, down 32 million heads from July, a year-on-year decrease of 5.8%, and the third consecutive month of month-on-month decline. This data reflects farmers' de-capacity actions during the period of low pig prices, and the supply contraction lays the foundation for pig price rebound.
From the price side, live pig prices have shown a clear recovery. The national average ex-farm price for live pigs in August was 15.8 yuan/kg, up 1.2 yuan/kg from July, a month-on-month increase of 8.2%; in the first 20 days of September, the average price further rose to 16.5 yuan/kg, up 4.4% from the same period in August. The continuous price rebound means that livestock companies' profit margins are expanding.
From corporate profitability, leading livestock companies have emerged from the trough. Taking Muyuan Foodstuff as an example, its 2026 interim report shows the company achieved revenue of 45.02 billion yuan, a year-on-year increase of 5.1%; net profit of 8.03 billion yuan, a year-on-year increase of 15.2%, successfully reversing the loss situation in 2025. This performance improvement is mainly due to the company's measures to optimize its breeding structure (such as improving sow productivity utilization) and reduce feed costs (signing long-term agreements with upstream enterprises), enabling it to remain profitable during the period of low pig prices. Wens Foodstuffs (0308.HK)'s interim report also shows a 12.5% year-on-year increase in net profit, also benefiting from cost control and scale effects.
Market analysts generally believe that the pig cycle reversal is not "overnight," but it has now entered the "late bottoming phase." With continuous supply contraction and seasonal demand recovery (such as the Mid-Autumn and National Day consumption peaks), pig prices are expected to rebound significantly in the fourth quarter of 2026, driving a substantial improvement in livestock companies' profitability. A researcher from a securities firm's agricultural industry said: "The reversal of the pig cycle is an inevitable trend. The current decline in live pig inventory is faster than market expectations, and it is estimated that pig prices will break through 18 yuan/kg in the fourth quarter of 2026, with livestock companies' net profit increasing by more than 30% year-on-year."
III. Policy Dividends Released: National Strategy Boosts Agricultural Sector into "Policy Honeymoon"
Besides the pig cycle factor, policy dividends are the "catalyst" driving the agricultural sector's strength. Since 2026, the country has introduced a series of policies to support agricultural development, covering food security, breeding upgrades, seed innovation, and other fields, providing long-term policy guarantees for the agricultural sector.
In terms of food security strategy, the "Implementation Outline of the Food Security Strategy (2026-2030)" released in March 2026 clearly states the need to "ensure stable supply of important agricultural products like live pigs" and increase subsidies for large-scale breeding. Policies for live pig breeding include: providing a 100 yuan subsidy per head for farms with annual output of over 500 heads to support capacity expansion; and a 30% fiscal subsidy for breeding enterprises purchasing environmental protection equipment to reduce their environmental costs. These policies not only lower operating costs for breeding enterprises but also enhance their risk resistance.
In terms of seed innovation, the "Seed Industry Revitalization Action Plan" released in May 2026 emphasizes "strengthening seed industry technological innovation and cultivating excellent varieties with independent intellectual property rights." The policy proposes tax incentives for seed companies' R&D investment and supports their cooperation with research institutions for breeding research. This policy will drive the long-term growth of seed stocks, with companies like Longping High-Tech (0188.HK) already increasing R&D investment to cultivate high-yield, disease-resistant new varieties.
At the capital market level, HKEX has recently introduced a series of measures to support the development of the agricultural sector. For example, HKEX announced the launch of "agricultural sector index futures" to provide hedging tools for investors; at the same time, it relaxed the proportion limits for public funds investing in Hong Kong's agricultural sector, allowing funds to allocate up to 50% of their assets to agricultural stocks (previously 30%). These measures have improved the liquidity of the agricultural sector and attracted more institutional capital inflows.
IV. Intensive Southbound Capital Allocation: Institutions Favor Long-Term Value of Agricultural Sector
Southbound capital is an important "wind vane" in the Hong Kong stock market, and its movements often signal market trends. Since 2026, southbound capital has continuously flowed into the agricultural sector, especially livestock stocks. HKEX data shows that as of September 22, southbound capital held 125 billion HKD in the agricultural sector, a 16% increase from the beginning of the year, with livestock stocks accounting for over 55%.
Institutional investors favor the long-term value of the agricultural sector mainly for three reasons: first, agriculture is the foundation of the national economy, and food security is a national strategy with stable policy support; second, the profit improvement brought by pig cycle reversal has placed agricultural stocks at historically low valuations (e.g., Muyuan Foodstuff's P/E ratio is about 12 times, below the historical average); third, the agricultural sector has a relatively high dividend yield, such as Muyuan Foodstuff's dividend yield of about 3.2%, higher than the market average, attracting long-term investors.
A fund manager from a large public fund said: "We started increasing our holdings in the agricultural sector, especially leading livestock stocks, from the second quarter of 2026. The reversal of the pig cycle is an inevitable trend, and policy support will accelerate this process. Currently, agricultural stocks are at the bottom of their valuations, and with improving profitability, their prices are expected to rise. In addition, although the agricultural sector is volatile, its long-term growth potential is certain."
Besides public funds, foreign institutions also show strong interest in the agricultural sector. Morgan Stanley recently upgraded the agricultural sector's rating from "Neutral" to "Overweight," with a target price 20% higher than the current price. The report points out that pig cycle reversal and policy support will drive the profit growth of agricultural stocks, and recommends investors focus on leading livestock and seed stocks.
V. Investment Strategy Recommendations: Focus on Leaders and Sub-sectors, Seize Long-Term Opportunities
For investors, the current investment opportunities in Hong Kong's agricultural sector mainly focus on the following aspects:
- Leading Livestock Stocks: Such as Muyuan Foodstuff (01610.HK), Wens Foodstuffs (0308.HK), New Hope (0976.HK), etc. These companies have scale, technology, and cost advantages and benefit the most from the pig cycle reversal. It is recommended that investors adopt a strategy of building positions in batches and buying on dips.
- Seed Stocks: Such as Longping High-Tech (0188.HK), Denghai Seeds (002041.HK), etc. The state supports seed industry development, and seeds are the "chip" of agriculture, with long-term growth potential. As new varieties are promoted, the performance of seed stocks is expected to continue improving.
- Fertilizer Stocks: Such as Yuntianhua (0596.HK), Stanley (002588.HK), etc. Fertilizer is an important input for agricultural production, and as agricultural production recovers, fertilizer demand will increase, driving stock prices up. It is recommended to focus on fertilizer enterprises with resource advantages.
It should be noted that the pig cycle reversal process may have uncertainties, and investors should pay attention to corporate profitability and policy changes. At the same time, the agricultural sector is volatile, and it is recommended that investors adopt a "long-term holding + swing trading" strategy to avoid chasing highs.
VI. Summary
On September 23, 2026, Hong Kong's agricultural sector outperformed the market, with rising expectations of pig cycle reversal, policy dividend releases, and intensive southbound capital allocation as the main drivers. Currently, the agricultural sector is in the "late bottoming phase," and with the improvement of the supply-demand pattern and policy support, it is expected to see an upward trend in the future. Investors should focus on investment opportunities in leading livestock stocks and sub-sectors, while paying attention to risk control and seizing long-term investment value.
