On July 29, 2026, Hong Kong's three major stock indexes were mixed. The Hang Seng Index closed at 21,853 points, down 0.22%, but the agriculture, forestry, animal husbandry and fishery sector bucked the trend, rising 2.15% throughout the day, becoming the biggest highlight in the market. Among them, COFCO Meat (01610.HK) rose 4.68% to HKD 2.46; WH Group (00288.HK) rose 3.22% to HKD 6.73; Shenzhen-Hong Kong Stock Connect target Putian Food (01699.HK) rose 5.10%; feed leader Charoen Pokphand Foods (00043.HK) rose 2.85%. More than 80% of stocks in the sector closed in the green, with trading volume up 38% from the average of the previous five trading days.
Pork prices stabilize and rebound, breeding stocks benefit directly
On the news front, data released by the National Bureau of Statistics on July 28 showed that the national live pig (outer ternary) price was RMB 18.5/kg in mid-July, up about 12% from the end of June. This is the first time this year that live pig prices have risen for two consecutive weeks month-on-month, and the market widely believes that the downward phase of this pig cycle is nearing its end. Wang Gang, agricultural industry analyst at Galaxy Securities, said: "The number of breeding sows has fallen about 8% from the high in 2024, and the supply-side contraction trend is clear. Combined with the start of the summer consumption season, pig prices are expected to continue to rise in the third quarter." COFCO Meat, as a leading domestic pig breeding and meat processing enterprise, has outstanding cost control capabilities, and the recovery of pig prices has the greatest profit elasticity for it. WH Group's subsidiary Shuanghui Development has pricing power in slaughter and meat processing, and also stands to benefit from the improving industry prosperity.
Policy boost: new round of agricultural subsidies and credit support rolled out
In addition to pig price factors, strong policy support is also an important driver of the agricultural sector's strength. On July 28, the Ministry of Agriculture and Rural Affairs and the Ministry of Finance jointly issued the "Notice on Increasing Credit Support for Leading Agricultural Industrialization Enterprises," clearly stating that new loans to national-level agricultural leading enterprises will receive an interest subsidy of up to 2%, and banks are encouraged to set up dedicated agricultural credit plans. Meanwhile, Guangdong Province, Shandong Province, and other regions have begun to issue a new round of breeding sow subsidies, raising the subsidy per sow from RMB 200 last year to RMB 350. Analysts pointed out that these measures will help alleviate the funding pressure on farmers, accelerate industry capacity recovery, and benefit upstream and downstream enterprises such as feed and animal health.
Southbound capital continues to flow into agricultural sector; institutions see long-term value
Data on southbound capital flows through the Stock Connect show that from July 27 to 29, southbound capital net bought the agricultural sector for three consecutive trading days, with a cumulative net inflow of about HKD 1.28 billion. COFCO Meat, WH Group, and China Agri-Industries Holdings (00606.HK) were among the top net buys. A recent report from HSBC Global Research noted: "Hong Kong agricultural stocks are currently trading at the historical bottom of valuations, with an average P/E ratio of only 12 times, far below the consumer sector average. With the reversal of the pig price cycle and increasing focus on food security, the agricultural sector has valuation recovery potential." Notably, many of the stocks that moved today are Shenzhen-Hong Kong Stock Connect and Shanghai-Hong Kong Stock Connect targets, indicating increased northbound capital allocation to Hong Kong agricultural stocks.
Commodity futures linkage: soybean meal and corn prices rise, passing on cost pressure
In the futures market, the main contract of Dalian Commodity Exchange soybean meal closed up 1.7% at RMB 3,560/ton today, while the main corn contract rose 0.9% to RMB 2,650/ton. Rising feed raw material prices usually compress breeding profits, but this round of pig price increases far exceeded raw material price increases, expanding breeding profits instead. According to estimates, under the self-breeding and self-raising model, the current per-head breeding profit has turned from a loss of RMB 50 in June to a profit of about RMB 200. Therefore, the rise in feed costs did not drag down breeding stocks; on the contrary, due to the positive pig price outlook, it became a reason for capital to chase. However, investors need to be cautious if raw material prices continue to rise sharply while pig prices fail to keep pace, which could suppress the sector.
Outlook: focus on confirmed pig price recovery and interim results
Looking ahead, analysts from Hai Tong International believe that whether the agricultural sector can continue its strength depends on two key variables: first, whether pig prices can stabilize above RMB 19/kg during the consumption peak season in August and continue to rise; second, whether the interim results of listed companies can deliver revenue growth. Leading companies such as COFCO Meat and WH Group will disclose their interim results in mid-August, and the market generally expects sequential improvement in second-quarter results. From a short-term technical perspective, today the agricultural sector broke through the 60-day moving average on strong volume, and a MACD golden cross has formed, which may challenge the year's high. However, the overall market sentiment in Hong Kong remains cautious, as the Hang Seng Index failed to hold above 22,000 points. If the broader market weakens, the agricultural sector may not be able to stand alone. Overall, it is recommended that investors moderately pay attention to low-valuation, high-elasticity breeding leaders, while also watching for catch-up opportunities in feed and seed stocks.
