Investment Rating - The report maintains an "Increase" rating for the agricultural sector [5] Core Views - The report emphasizes the need to combat "involutionary" competition and optimize pig production capacity, as highlighted in the recent meeting of the Central Financial Committee [1][17] - The overall pig farming industry is currently profitable, with self-breeding and self-raising models showing increased profits [18][23] - The poultry sector is experiencing price declines, particularly in broiler chickens and chicken seedlings, indicating a potential for price recovery in the future [19][36] Summary by Sections Agricultural Data Tracking - The national average price for lean meat pigs is 14.82 CNY/kg, up 3.9% from last week, while the average wholesale price for pork is 20.58 CNY/kg, up 1.7% [21][22] - The average weight of pigs for slaughter has decreased to 90.05 kg, down 0.6% week-on-week [26] - The price of 15 kg piglets has decreased to 36.77 CNY/kg, down 1% from last week [29] Pig Farming - The average profit for self-breeding pigs is 119.72 CNY/head, an increase of 69.48 CNY/head from last week, while the profit for purchased piglets is -26.26 CNY/head, an increase of 105.45 CNY/head [23][24] - The report suggests monitoring the impact of recent policy changes on pig prices and inventory behavior [18] Poultry Farming - The average price for broiler chickens is 6.75 CNY/kg, down 3.7% from last week, and the average price for chicken products is 8.45 CNY/kg, down 1.2% [36] - The price for broiler chicks has dropped to 1.36 CNY/chick, down 20% from last week [31] Crop and Agricultural Products - The approval of genetically modified varieties is expected to lead to commercial sales, with potential growth opportunities for industry companies [19] Livestock Support - The report notes increased price volatility in agricultural products, with leading feed companies likely to replace smaller competitors due to their advantages in procurement and scale [19]

Investment Rating - The report rates the agricultural, forestry, animal husbandry, and fishery industry as "Overweight" due to expected overall profit improvement in the sector [3][4]. Core Insights - The report highlights that the profitability of pig farming is expected to improve, with a stable pig price and a significant increase in average profit per head for self-bred pigs [4]. - Poultry farming shows a mixed outlook, with white chicken prices bottoming out and yellow chicken profitability declining, while egg-laying chicks continue to experience high demand [4]. - The pet food sector is projected to maintain high growth, with leading companies showing strong online sales growth, despite a decline in exports to the U.S. due to tariffs [4]. - Animal health is recovering, with increased demand for vaccines and improved sales of veterinary preparations [4]. - The seed industry faces challenges with declining corn prices and increased competition, leading to pressure on the performance of leading seed companies [4]. Summary by Sections Pig Farming - The average price of pigs in H1 2025 is expected to be 14.80 CNY/kg, a decrease of 4.2% year-on-year, while the average profit for self-bred pigs is projected at 69.04 CNY/head, recovering from a loss of 24.82 CNY/head in H1 2024 [4]. Poultry Farming - White chicken prices are under pressure due to oversupply, with the average price for commodity broiler chicks at 2.4 CNY/bird, down 21% year-on-year. Yellow chicken prices are also declining, with the average price for Qingjiao chicken at 8.9 CNY/kg, down 19% year-on-year [4]. Pet Food - The domestic pet food market is experiencing a growth rate of 17% in online GMV for the first five months of 2025, compared to 14% in the same period of 2024. Leading companies like Guibao Pet and Zhongchong Co. show growth rates of 51% and 26%, respectively [4]. Animal Health - The demand for veterinary vaccines has increased, with a 15.8% year-on-year rise in vaccine approvals in the first five months of 2025. Prices for veterinary preparations like Tylosin and Tiamulin have increased by 39.8% and 9.3%, respectively [4]. Seed Industry - The corn seed market is under pressure due to falling corn prices and high competition, leading to a decline in seed prices and performance expectations for leading seed companies [4].

Group 1 - The core viewpoint indicates that the pig price is expected to maintain a central level above 15 yuan/kg in 2025 due to limited supply growth and cautious breeding practices [1][2] - The industry is experiencing a supply gap, with a notable increase in piglet losses due to a virus mutation, which is expected to drive up pig prices in Q3 2025 [1] - Recent government policies aim to regulate the pig industry, including measures to curb low-price competition and promote the orderly exit of outdated production capacity [1][2] Group 2 - The pig price is under significant downward pressure in H2 2025, but multiple government policies are expected to support price increases and alleviate CPI pressure [2] - The overall investment logic in the pig sector is improving due to supply contraction and macroeconomic catalysts, suggesting a positive outlook for investment [2] - The CSI Livestock Breeding Index reflects the performance of listed companies involved in livestock feed, veterinary drugs, and breeding, with the top ten weighted stocks accounting for 65.27% of the index [2]

Investment Rating - The report maintains a "Recommended" rating for the agriculture, forestry, animal husbandry, and fishery industry [1][61]. Core Views - The report highlights that the pig price may experience a turning point due to seasonal factors and policy changes, suggesting a bottoming out phase for the sector [2][12]. - The poultry sector is seeing price declines, but there are signs of marginal improvements in the cycle [3][24]. - The animal health sector is expected to see performance recovery, and there are investment opportunities in the pet medical industry [4][35]. - The planting sector is witnessing a week-on-week rebound in grain prices [5][43]. - The feed sector is experiencing price fluctuations, with a general downward trend [6][46]. - The pet economy is thriving, with domestic brands gaining strength [7][51]. Summary by Sections Pig Industry - The average pig price is currently fluctuating between 14-15 CNY/kg, with a notable increase in average weights compared to previous years [11][12]. - The report recommends focusing on companies with low costs and strong financial health, such as Wens Foodstuffs, Muyuan Foods, and Juxing Agriculture [12][61]. Poultry Industry - The poultry prices are declining, with the white feather chicken price at 3.48 CNY/jin, showing a slight decrease [24][25]. - The report recommends companies like San Nong Development and Yisheng Livestock, while suggesting to pay attention to He Feng and Minhe Livestock [25][61]. Animal Health - The animal health sector is expected to recover, supported by the profitability of the pig farming industry [35][36]. - The pet medical market is projected to grow, with a market size of approximately 840 billion CNY, representing 28% of the pet industry [4][35]. Planting Sector - Grain prices are showing a week-on-week increase, with corn priced at 2353 CNY/ton and wheat at 2446 CNY/ton [43][44]. - The report suggests focusing on companies involved in genetically modified seeds, such as Suqian Agricultural Development and Longping High-tech [43][61]. Feed Sector - Feed prices are experiencing a downward trend, with pig feed at 3.36 CNY/kg [46][47]. - The report recommends Hai Da Group and suggests paying attention to He Feng [47][61]. Pet Industry - The pet market is expected to reach a scale of 300.2 billion CNY in 2024, with a growth rate of 7.5% [51][52]. - The report recommends companies in the pet food sector like Guobao Pet and Zhongchong Co., and in the pet medical sector, it recommends Ruipu Biological [55][61].

Group 1: Core Insights - The report emphasizes the importance of policy measures to regulate breeding sow capacity, which may elevate the price center for pigs in 2025-2026, benefiting the poultry sector and leading feed companies [1][38]. - The report highlights the increasing focus on food security amid frequent extreme weather events and trade tensions, suggesting a strategic shift in the agricultural sector [1]. Group 2: Swine Farming - In the first half of 2025, pig prices remained strong, influenced by slow recovery in breeding sow capacity and proactive market behavior before holidays, leading to a stable price range of 14.0-15.0 yuan/kg [12][15]. - The report anticipates limited growth in pig supply for 2025 due to cautious replenishment by producers, with expectations for pig prices to remain favorable in the second half of 2025 [15][31]. - Key companies recommended for investment in the swine sector include Muyuan Foods and WH Group, noted for their cost advantages and strong performance [38]. Group 3: Poultry Farming - The report is optimistic about the white-feathered chicken breeding sector, expecting a tightening supply of parent stock in the second half of 2025, which will positively impact the market [40][58]. - For yellow-feathered chickens, the report indicates that the current low inventory of parent stock, combined with reduced production costs, sets the stage for potential price recovery and profit expansion [52][58]. - Recommended companies in the poultry sector include Lihua Agricultural and Dekang Agriculture, which are expected to benefit from improving market conditions [58]. Group 4: Feed and Veterinary Services - The report notes a recovery in demand for feed products as the breeding sector improves, with a positive outlook for companies like Haida Group, which is well-positioned to capitalize on this trend [6][38]. - The veterinary services sector is also expected to see a recovery in demand, with a focus on leading companies in the animal health space [38]. Group 5: Seed Industry - The report highlights the rising importance of food security, with a focus on the seed industry, particularly in rice and corn, as the sector enters a phase of recovery and growth [38]. - The hybrid rice seed industry is expected to see improved supply-demand dynamics, while corn prices are rebounding, encouraging farmer planting enthusiasm [38][58]. - Recommended companies in the seed sector include Longping High-Tech and Dabeinong, which are anticipated to benefit from these trends [38].

Investment Rating - The investment rating for the agriculture, forestry, animal husbandry, and fishery industry is "Positive" (maintained) [1] Core Views - The supply contraction has reached a point where the average price of live pigs is expected to rise, with the national average price at 14.74 yuan/kg as of June 29, 2025, showing a week-on-week increase of 0.45 yuan/kg but a year-on-year decrease of 3.17% [4][13] - The profit of pig farming enterprises is expected to maintain high growth year-on-year in Q2 2025, driven by increased output, heavier average weights, and reduced costs [5][23] - The investment logic for the pig sector is improving due to supply contraction and macroeconomic catalysts, suggesting a positive allocation strategy [6][30] Summary by Sections Weekly Observation - In Q2 2025, the average price of live pigs is projected at 14.55 yuan/kg, a year-on-year decrease of 11.22%, while the cost of pig farming has decreased to 13.38 yuan/kg, a year-on-year decline of 2.92% [5][23] - The average weight of pigs at slaughter has increased to 128.99 kg/head, a year-on-year increase of 2.42%, with a projected year-on-year increase of 34.07% in the total output of 12 major listed pig companies [5][23] Weekly Market Performance - The agricultural index underperformed the broader market by 1.11 percentage points, with the Shanghai Composite Index rising by 1.91% and the agricultural index increasing by 0.80% [34][36] - The aquaculture sector led the gains, with notable increases in individual stocks such as Biological Shares (+9.83%) and Spring Snow Food (+9.82%) [34][38] Price Tracking - As of June 27, 2025, the national average price for live pigs was 14.72 yuan/kg, up 0.50 yuan/kg from the previous week, while the average price for piglets was 31.6 yuan/kg, down 0.25 yuan/kg [41][44] - The feed price ratio for pigs was recorded at 4.38:1, indicating the profitability dynamics in the sector [41] Recommendations - The report recommends actively allocating investments in leading pig companies such as Muyuan Foods, Wens Foodstuff Group, and others, as well as in the feed sector benefiting from strong overseas demand [6][30]

Investment Rating - The investment rating for the agriculture, forestry, animal husbandry, and fishery industry is "Positive" (maintained) [1] Core Viewpoints - The report emphasizes the ongoing capacity regulation policies in the pig industry, recommending a "platform + ecosystem" model represented by Dekang Agriculture and Animal Husbandry [3] - The report highlights the need to shift from a cyclical perspective to focusing on financial performance, suggesting that investment should transition from "cyclical thinking" to "quality and price" [6][17] - The report identifies key investment opportunities in the pig farming sector, particularly in leading companies with cost advantages, such as Muyuan Foods and Wens Foodstuffs [6][17] Summary by Sections 1. Pig Industry - In May, the national breeding sow inventory reached 40.42 million heads, a year-on-year increase of 1.15% and a month-on-month increase of 0.1%, indicating a stable capacity within the green regulatory range [6][16] - The average pig price rose to 14.66 CNY/kg, with the complete cost for leading enterprises dropping to around 12 CNY/kg, suggesting a favorable profit outlook [5][16] - The report recommends focusing on companies with strong financial performance, such as Dekang Agriculture and Animal Husbandry, Muyuan Foods, and Wens Foodstuffs [6][17] 2. Poultry Industry - The price of parent chicken seedlings remains high, with the average price at 47.93 CNY, reflecting a 5.25% increase [7][18] - The report notes a persistent contradiction between high production capacity and weak consumption in the white feather chicken industry, leading to potential market share gains for integrated enterprises [7][18] - Key investment targets include leading companies in imported breeding stock and fully integrated enterprises like Yisheng and Shengnong Development [7][18] 3. Feed Industry - The report highlights a recovery in aquaculture profitability due to rising fish prices and falling feed prices, with expectations for a rebound in demand for aquaculture feed in 2025 [8][19] - The leading companies are expected to improve their market share and cash flow as the capital expansion phase ends [8][19][21] 4. Pet Industry - The report indicates strong performance from domestic pet brands during the Tmall 618 sales event, with brands like Guibao and Zhongchong showing significant growth [11][22] - The competitive landscape is intensifying, with a focus on brands that demonstrate continuous high growth and strong overseas performance [11][22] 5. Agricultural Products - The report notes a significant reduction in grain imports, with a 29.7% year-on-year decrease in the first five months of 2025, which may support price recovery [12][29] - The report emphasizes the importance of domestic supply and the need for price increases to enhance farmers' income [12][29] 6. Market and Price Situation - The report states that the Shanghai and Shenzhen 300 Index closed at 3922 points, reflecting a 1.95% increase, while the agriculture index rose by 0.80% [30][31] - The report highlights the overall stability in the pig market, with average prices showing a slight decline due to seasonal consumption effects [52]

Summary of Conference Call Records Industry Overview - The conference call primarily discusses the **agriculture sector**, focusing on **swine farming**, **aquaculture**, and **pet food industries** [1][2][3][4]. Key Points and Arguments Swine Farming Sector - The swine farming sector's priority has increased due to **fund allocation** and **valuation considerations**. The optimization of production capacity is expected to be the main theme, with an upward revision of market conditions anticipated for 2026 and beyond [1][3][4]. - In Q1 2025, there was significant **supply pressure** in the swine industry, leading to low price fluctuations. However, a decrease in feed prices improved farming profits, with net profits for self-bred pigs at **77.82 CNY per head**, a significant improvement from a loss of **96 CNY per head** in the previous year [1][5]. - The **number of piglets** increased by **16.33%** year-on-year, but the survival rate for fattening pigs remained stable, raising concerns about potential oversupply risks [1][6]. - The concentration of the top three companies in the swine sector reached **16.84%** in 2024, with Muyuan exceeding **10%**. The average debt-to-asset ratio for the swine farming sector was **56%**, down **4.2%** year-on-year, indicating ongoing financial pressure [1][8]. - As of April 2025, the number of breeding sows was **40.38 million**, showing a **1.3%** year-on-year increase, but still within a reasonable range for production capacity control [1][9]. Aquaculture Sector - The aquaculture sector is performing well, with prices for common fish species like grass carp and crucian carp rising due to reduced supply following previous years of losses. Specific species like **California bass** and **yellow catfish** are experiencing strong price performance [11]. - The **South American white shrimp** market has seen prices drop to their lowest for the year, but a recovery is expected towards the end of the year [11]. - Overall, the aquaculture sector is witnessing improved profitability, leading to increased feed demand, which is projected to grow year-on-year [11][12]. Pet Food Industry - The pet food market has shown significant growth, with exports increasing despite a **5%** decline in exports to the U.S. due to trade policy uncertainties. However, exports to Southeast Asia have surged by **51%** [13]. - The domestic market for pet food is also growing, with online sales showing double-digit growth, indicating a trend of consumption upgrade [13][14]. - The market concentration for pet food brands has increased, with the top 10 brands holding **36.56%** of the market share, reflecting a rise in both sales volume and prices [14]. Future Trends and Investment Directions - The swine industry is expected to maintain low prices in the second half of 2025 due to ample supply, with piglet prices also likely to fluctuate more significantly [7][10]. - Investment focus should be on low-cost, high-quality pig farming companies such as Muyuan and Wens Foodstuffs, as well as feed companies like Haida Group [16]. - In the pet sector, companies with strong product innovation and brand upgrade potential should be prioritized, alongside those capable of resource integration in the pet medical field [17]. Additional Important Insights - The overall agricultural sector performed well in the first half of 2025, particularly in consumer growth areas like pet consumption and aquaculture, with some companies exceeding expectations [2]. - The differentiation and increased trading density in the new consumption sector warrant a reevaluation of valuation levels across different segments [2][4].

Investment Rating - The report maintains an "Outperform" rating for the agricultural products sector [1][5][4]. Core Views - The report is optimistic about the reversal of the beef cycle and recommends investments in leading companies in the livestock sector, particularly in beef and raw milk, which are expected to experience a positive resonance in 2025 [3][4]. - The pet industry is highlighted as a growth sector benefiting from demographic changes, while the feed sector, particularly Haida Group, is expected to gain from the recovery in aquaculture [3][4]. - The report notes that the pig industry shows insufficient expansion willingness, but the overall market conditions are expected to remain stable through 2025, with a focus on undervalued leading companies [3][4]. - Poultry production is expected to maintain low volatility, with white chicken consumption gradually increasing and yellow chicken likely to benefit from improved domestic demand [3][4]. Summary by Sections Livestock - **Pork**: The average price of live pigs is 14.16 CNY/kg, with a week-on-week increase of 1.22%. The price of 7kg piglets is approximately 446 CNY/head, down 4.98% week-on-week [1][13]. - **Beef**: The domestic beef market price is 59.35 CNY/kg, showing a slight decrease of 0.05% week-on-week but a significant increase of 27.63% year-on-year [1][15]. - **Poultry**: The price of broiler chicks is 1.23 CNY/bird, down 43% week-on-week, while the price of eggs in major production areas is 2.90 CNY/jin, up 9.85% week-on-week but down 35.27% year-on-year [1][14]. Feed and Raw Materials - **Soybean Meal**: The spot price is 3024 CNY/ton, with a week-on-week increase of 1%. The report indicates strong support for supply and demand in the medium to long term [2][3]. - **Corn**: The domestic corn spot price is 2415 CNY/ton, with a week-on-week increase of 0.37% and a year-on-year increase of 0.12% [2][3]. - **Sugar**: The price in Guangxi is 5980 CNY/ton, down 0.17% week-on-week, with attention on import rhythms and crude oil price fluctuations [2][3]. Investment Recommendations - Recommended stocks include: - **Beef**: Guangming Meat Industry - **Pets**: Guibao Pet, Zhongchong Co., and Ruipu Biological - **Feed**: Haida Group - **Pork**: Dekang Agriculture, Muyuan Foods, Huazhong Agriculture, and others - **Poultry**: Lihua Co., Yisheng Co., and Shengnong Development [3][4].

Group 1: Pig Farming Industry - The pig prices are expected to rebound unexpectedly in the second half of 2025 due to easing supply pressure and seasonal consumption peaks, with recommendations to focus on leading companies like Muyuan and Wens [1][2] - The average price of live pigs from the beginning of 2025 to June 16 is approximately 14.81 yuan/kg, showing a year-on-year decrease of about 4% [12][14] - Major pig farming companies have seen a reduction in breeding costs, with Muyuan's cost dropping to around 12.2 yuan/kg, indicating improved profitability potential [12][14] Group 2: Aquaculture and Feed Industry - The aquaculture feed industry is expected to benefit from rising fish prices, with a notable increase in grass carp prices by approximately 10% since March 2024 [37][39] - Haida Group is highlighted for its strong competitive advantages and potential for growth in both domestic and overseas feed markets, with a projected compound annual growth rate (CAGR) of about 20% for overseas feed sales from 2025 to 2030 [38][39] - The domestic feed industry is anticipated to recover due to improved profitability in the pig farming sector and a rebound in aquaculture [37][38] Group 3: Pet Industry - The pet industry is experiencing significant growth driven by a younger demographic of pet owners, with 90s and 00s generation pet owners accounting for over 66.8% of the market by 2024 [45][47] - The average annual spending on pets in China is currently at 2419 yuan, indicating room for growth compared to international standards [46][47] - The market share of domestic pet brands is increasing, with the top five domestic brands reaching a combined market share of 13.9% in 2024, while foreign brands are declining [54][55] Group 4: Snack Retail Industry - The snack retail industry is transitioning towards a dual oligopoly structure, with leading brands like Mingming and Wancheng expected to capture significant market shares of 34% and 30% respectively by May 2025 [4][39] - The industry has substantial room for expansion, with an estimated ceiling of 67,000 stores, indicating a potential for 1.4 times current capacity [4][39] - The profitability of leading snack retail companies is projected to improve due to economies of scale and enhanced bargaining power with suppliers [4][39]