HK Stock Market Move | Pork concept stocks rose in early trading. Relevant departments held a meeting and requested pig companies to fulfill their commitment to reduce production targets.

Pork concept stocks rose across the board in early trading. As of the time of writing, DEKON AGR(02419) rose 4.99% to HK$81.05; COFCO JOYCOME(01610) rose 3.14% to HK$1.64; WH GROUP(00288) rose 0.74% to HK$9.56; Muyuan Foods(02714) rose 0.67% to HK$45.08. On the news front, according to Caixin, the relevant departments held a meeting on the morning of March 19, requiring all pig companies to report their annual production targets and to adjust their commitment targets, reducing the annual output after reducing the number of sows. Currently, the price of pork has fallen to a seven-year low, and the pig industry is in a deep loss phase, entering a phase of cash flow consumption. Dongxing pointed out that the short-term situation of oversupply of live pigs is severe, pork prices are bottoming out, and losses are accumulating. With the continuing trend of fine-tuned control policies since 2016, it is expected that the post-holiday digestion of production capacity will gradually accelerate. The industry is currently in a key stage of digestion of production capacity and a window period for left-hand layout. In terms of valuation, the industry index's PB bottom is rising, the sector's market has started, but it is still at the historical median level, with room for further upward movement.