Group 1: Financing Status in the Swine Breeding Industry - From 2017 to June 2025, there were a total of 38 financing events in China's swine breeding industry, indicating a relatively mature investment stage with a majority of companies in the New Third Board and IPO phases [3][5][12] - The financing events are primarily concentrated in regions such as Sichuan, Hebei, and Henan, with Sichuan having 6 events, while Hebei and Henan each recorded 5 events [5][6] Group 2: External Investment Layout of Representative Companies - Major companies in the swine breeding industry, such as Muyuan Foods and Wens Foodstuff Group, have focused their external investments in the agricultural, forestry, animal husbandry, and fishery sectors, accounting for approximately 74% of their total investments [10][12] - The external investment activities of these companies are predominantly concentrated in Henan and Guangdong provinces [6][10] Group 3: Mergers and Acquisitions in the Industry - The swine breeding industry in China has seen a high level of merger and acquisition activity, primarily through horizontal mergers [12][14] - Notable merger and acquisition events from 2017 to 2025 include various horizontal mergers, with significant transactions such as Wens Foodstuff Group acquiring New Big Agriculture for 810 million RMB and New Hope Liuhe acquiring New Mu Breeding for 850 million RMB [14][15]

Core Views - The breeding sector is experiencing improved supply-demand dynamics due to intensified policy regulation, with measures from the National Development and Reform Commission (NDRC) aimed at optimizing pig production capacity, which is expected to enhance CPI targets and stabilize pig prices [4][50] - The beef industry is undergoing significant supply reduction, with a deep cycle anticipated as the number of breeding cows declines sharply, leading to lower beef supply starting in the second half of 2025 [6][88] - Smart agriculture is benefiting from ongoing policy incentives and increased funding, with water conservancy investments projected to reach 1.4 trillion yuan in 2024, marking a 12.8% year-on-year increase [6][50] Breeding Sector - The breeding industry is seeing a favorable supply-demand balance, with policies aimed at controlling production capacity and improving profitability for leading companies such as Muyuan Foods and Wens Foodstuffs [4][50] - The profitability of self-breeding operations is stable, while external pig purchases show fluctuating profits, indicating a need for careful management of breeding strategies [20][25] - The average weight of pigs being slaughtered has decreased, which is expected to reduce supply pressure and potentially increase pig prices in the coming months [41][42] Beef Industry - The domestic beef supply is expected to decrease significantly due to a reduction in breeding cow numbers, with the industry mirroring the pre-2019 pig cycle in terms of supply adjustments [6][88] - The beef market is characterized by a long adjustment period from breeding to market, typically requiring 2-3 years, which complicates supply management [70] Smart Agriculture - The smart agriculture sector is poised for growth driven by government policies and funding, with a focus on modernizing irrigation systems and enhancing water management practices [6][50] - The market for smart agriculture is projected to expand significantly, with the government aiming to establish 13 million acres of efficient water-saving irrigation [6] Animal Health - The veterinary drug sector is experiencing a structural shift due to the implementation of new GMP standards, which are raising industry entry barriers and promoting consolidation among leading firms [51][66] - The veterinary raw material drug prices are entering a recovery phase after a prolonged downturn, with demand expected to rise as breeding profitability improves [53][66] Investment Recommendations - Key investment targets include Muyuan Foods, Wens Foodstuffs, and Jiusan Foods in the breeding sector, as well as Deyu Water Saving and Ruipu Biological in the smart agriculture and animal health sectors, respectively [4][66][67]

Investment Rating - The report maintains a "Recommended" rating for the agricultural, forestry, animal husbandry, and fishery industry [1][8][64] Core Viewpoints - The report highlights the long-term value reassessment opportunities in the pig industry, with expectations of price fluctuations in the range of 14-15 CNY/kg post-Chinese New Year 2025, indicating a potential downward trend in prices due to supply pressures [4][15] - The poultry sector is experiencing price declines, with a focus on marginal improvements in the cycle, while the animal health sector is expected to see performance recovery and investment opportunities in the pet medical industry [5][6][28] - The pet economy is thriving, with domestic brands rapidly emerging, and the report anticipates continued improvement in industry profitability [7][58] Summary by Sections 1. Pig Industry - The average price of pigs is currently around 14.6 CNY/kg, with a slight weekly decline [14] - The report recommends companies with low costs and strong financials, specifically highlighting Wens Foodstuffs, Muyuan Foods, and Juxing Agriculture [15][64] 2. Poultry Industry - The report notes a decline in poultry prices, with a focus on the cyclical improvements expected in the future [27] - Recommendations include Shennong Development and Lihua Stock [5][28] 3. Animal Health - The animal health sector is expected to see a recovery in performance, supported by the profitability of the pig farming industry [6][38] - Investment opportunities in the pet medical sector are highlighted, with a market size of approximately 840 billion CNY [7][38] 4. Planting Industry - The report indicates a decrease in wheat and corn prices, with recommendations for companies involved in genetically modified seeds [44][50] 5. Feed Industry - The total industrial feed production in the first half of 2025 reached 15,850 million tons, showing a year-on-year growth of 7.7% [48][50] - Recommendations include Haida Group and attention to He Feng Stock [50] 6. Pet Industry - The pet consumption market is projected to reach 300.2 billion CNY in 2024, with a growth rate of 7.5% [55][58] - Recommended companies in the pet food sector include Guai Bao Pet, Zhongchong Stock, and Petty Stock [58][64]

Core Points - The China Securities Index AH Economic Growth Index has shown significant growth, with a 7.97% increase over the past month, 10.26% over the last three months, and a year-to-date increase of 13.34% [1] - The index comprises financially sound leading companies from both mainland and Hong Kong markets, reflecting the performance of companies benefiting from changes in the national economic structure [1] - The index's top ten holdings include Tencent Holdings (9.46%), Alibaba-W (9.43%), Meituan-W (3.83%), Yum China (3.37%), Jiangsu Bank (3.03%), Jitu Express-W (2.96%), Muyuan Foods (2.56%), Dekang Agriculture (2.43%), Wens Foodstuff Group (2.3%), and China Telecom (1.84%) [1] Market Composition - The index's market composition shows that the Hong Kong Stock Exchange accounts for 52.86%, the Shanghai Stock Exchange for 30.81%, the Shenzhen Stock Exchange for 16.33%, and the Beijing Stock Exchange for 0.00% [1] - In terms of industry representation, the index has 20.08% in industrials, 19.84% in consumer discretionary, 15.61% in communication services, 11.42% in information technology, 9.15% in consumer staples, 8.30% in financials, 6.14% in materials, 4.91% in healthcare, 1.69% in utilities, 1.68% in energy, and 1.18% in real estate [2] Index Adjustment Mechanism - The index samples are adjusted biannually, with adjustments occurring on the next trading day after the second Friday of June and December [2] - Weight factors are adjusted in accordance with the sample changes, and in special circumstances, temporary adjustments may be made [2]

Economic News - In June, the total electricity consumption in China reached 867 billion kWh, a year-on-year increase of 5.4% [1] - The People's Bank of China announced that the 5-year LPR remains at 3.5% and the 1-year LPR at 3% [1] - The U.S. government is reviewing contracts between SpaceX and federal agencies due to concerns over potential waste in multi-billion dollar deals [1] - The Ministry of Transport reported that several key indicators of the "14th Five-Year Plan" have been completed ahead of schedule, including highway mileage and urban rail transit [1] - E-commerce in China saw a growth of 8.5% in online retail sales from January to June 2025, with significant increases in digital products and home appliances [1] - The Ministry of Industry and Information Technology is set to release a plan to stabilize growth in ten key industries, including steel and non-ferrous metals [1] - The European Investment Bank will launch a financing support plan totaling €4.25 billion for renewable energy and green technology investments in EU countries [1] Company News - Yushutech has begun its IPO counseling process with CITIC Securities as the advisor, aiming to submit its application by October 2025 [4] - Suzhou Goodark has been established in Singapore with an investment of approximately 8 million RMB for electronic materials and solar cell production [4] - Hongxin Technology signed contracts with a leading domestic flying car company for the development and procurement of components, which is expected to positively impact its performance [4] - Rainbowsoft's chairman proposed a cash dividend plan for 2025, suggesting a distribution of no less than 60% of the net profit attributable to shareholders [4] - Changyingtong expects revenue between 173 million to 211 million RMB for the first half of 2025, with a significant increase in net profit due to rising demand for optical fiber devices [4] Retail Industry - In June 2025, the total retail sales of consumer goods grew by 4.8% year-on-year, with a slowdown attributed to the earlier "618" shopping festival and weaker restaurant sales [5][6] - Essential consumption remains stable, while optional categories show a slowdown in recovery, with food and daily necessities performing well [6] - Home appliances and furniture sales saw significant growth, with home appliances up 32.4% and furniture up 28.7% year-on-year, driven by government policies [7] - Online retail sales increased by 8.5% in the first half of 2025, with physical goods online sales growing by 6.0%, indicating a steady growth in online consumption [8] - The retail market is expected to continue its recovery, with a focus on durable goods benefiting from policy support and consumer preferences for high-cost performance products [8]

Investment Rating - The industry investment rating is "Positive" (maintained) [2] Core Viewpoints - The pig industry is experiencing a slight increase in breeding stock in Q2, with high profitability and a trend towards "de-involution" [2] - The latest pig price is 14.39 CNY/kg, with an average slaughter weight of 128.83 kg, indicating a potential for price stability despite slight fluctuations [3][13] - The Ministry of Agriculture's monitoring shows a 0.8% decrease in the national inventory of large pigs in June, suggesting a reduction in pig slaughter in July and August [3][47] Summary by Sections 1. Pig Industry - Breeding stock has slightly increased, with a national breeding sow inventory of 40.43 million heads, a year-on-year increase of 0.12% [4][13] - The industry has maintained profitability for 14 consecutive months, with 11 out of 14 listed companies forecasting increased performance for the first half of 2025 [4] - The Ministry of Agriculture is implementing capacity regulation policies to stabilize pig prices, indicating a strong commitment to maintaining price stability [4][13] - Recommended companies include Dekang Agriculture, Muyuan Foods, and Wens Foodstuff Group, focusing on cost-leading enterprises with strong profit certainty for 2025 [4] 2. Poultry Industry - The price of chicken seedlings in Yantai is 1.9 CNY/bird, up 27% month-on-month but down 40% year-on-year; the price of broiler chickens is 3.3 CNY/kg, up 3.8% month-on-month [5][14] - The industry faces a "high capacity, weak consumption" contradiction, leading to a reduction in production capacity among breeding farms [5][14] - Key investment focuses include high-return enterprises with sustainable ROE improvements, such as Yisheng Livestock and Shennong Development [5][14] 3. Feed Industry - The prices of various aquatic products have shown positive performance, with significant year-on-year increases for several species [6][15] - Recommended company is Haida Group, which is expected to benefit from industry recovery and improved management effectiveness [6][15] 4. Pet Industry - The uncertainty of tariffs and export fluctuations in Q2 have impacted the pet sector, but long-term effects are expected to be limited due to strong brand positioning and overseas factory layouts [7][17] 5. Agricultural Products - There is significant uncertainty regarding soybean imports in Q4, with August 1 being a critical date for monitoring US-China trade negotiations [8][18] - Natural rubber prices are expected to maintain a strong trend due to favorable macroeconomic conditions [8][18] 6. Market and Price Situation - The Shanghai and Shenzhen 300 Index closed at 4059, up 1.09% from the previous week, while the Agricultural Index closed at 2755, down 0.14% [19][21] - The livestock sector index is at 3071, indicating a stable performance amidst market fluctuations [19][35]

Investment Rating - Investment rating for the agriculture, forestry, animal husbandry, and fishery industry is "Positive" (maintained) [1] Core Viewpoints - The industry is experiencing a supply contraction due to overselling of live pigs since June, leading to a potential increase in pig prices in Q3 2025. The average selling price of live pigs in June 2025 was 14.28 yuan/kg, down 2.28% month-on-month and down 21.99% year-on-year [4][15] - The supply-demand dynamics are improving, with the gross white price difference strengthening month-on-month. As of July 17, 2025, the gross white price difference was 4.71 yuan/kg, an increase of 0.45 yuan/kg compared to June, although lower than the same period in 2024 [5][27] - The industry is entering a critical supply contraction phase, with expectations for the price center of live pigs to rise monthly [4][15] Summary by Sections Industry Overview - Since June, the overselling of live pigs has intensified, leading to a supply contraction. The average price of live pigs in June 2025 was 14.28 yuan/kg, reflecting a month-on-month decrease of 2.28% and a year-on-year decrease of 21.99% [4][15] - The monitoring sample indicated a slaughter volume of 4.3168 million heads in June 2025, down 6.20% month-on-month but up 12.22% year-on-year [4][15] Supply and Demand Dynamics - The gross white price difference has improved, indicating a stronger supply-demand balance. The national frozen product storage rate was 16.85%, down 0.03 percentage points year-on-year [5][27] - The industry is currently in a supply contraction phase, with expectations for the price center of live pigs to rise gradually [4][15] Company Performance - As of July 10, 2025, 12 listed pig farming companies reported a total of 16.1481 million heads sold in June, a year-on-year increase of 45.98% [6][34] - The average selling prices for major listed pig companies decreased month-on-month, with specific companies reporting the following prices: Muyuan Foods at 14.08 yuan/kg, Wens Foodstuff Group at 14.39 yuan/kg, and New Hope Liuhe at 14.18 yuan/kg [7][41]

Core Viewpoint - The HSBC Jintrust Consumer Dividend Stock Fund (540009) reported a profit of 2.0889 million yuan for Q2 2025, with a weighted average profit per fund share of 0.0084 yuan, and a net value growth rate of 0.97% during the period [3]. Fund Performance - As of the end of Q2 2025, the fund's scale was 196 million yuan [15]. - The fund's unit net value was 0.798 yuan as of July 18 [3]. - Over the past three months, the fund's adjusted unit net value growth rate was 0.15%, ranking 23 out of 41 comparable funds [3]. - Over the past six months, the adjusted unit net value growth rate was 3.38%, ranking 26 out of 41 comparable funds [3]. - Over the past year, the adjusted unit net value growth rate was 18.72%, ranking 9 out of 41 comparable funds [3]. - Over the past three years, the adjusted unit net value growth rate was -10.47%, ranking 11 out of 37 comparable funds [3]. Risk Metrics - The fund's Sharpe ratio over the past three years was -0.0217, ranking 13 out of 37 comparable funds [8]. - The maximum drawdown over the past three years was 30.23%, ranking 31 out of 37 comparable funds [10]. - The largest single-quarter drawdown occurred in Q1 2022, at 23.74% [10]. Investment Strategy - The fund maintained an average stock position of 88.87% over the past three years, compared to the industry average of 87.68% [13]. - The fund's highest stock position was 93.2% at the end of Q3 2019, while the lowest was 81.25% at the end of Q1 2025 [13]. - The fund's management indicated a focus on resilient stocks and adjustments in positions based on mid-term growth potential and certainty, with increased allocations in the agricultural sector during Q2 [3]. Holdings Concentration - As of the end of Q2 2025, the fund had a high concentration in its top ten holdings, which included Hai Da Group, Gree Electric Appliances, SF Holding, Muyuan Foods, Wens Foodstuff Group, HLA Corp, Spring Airlines, Yonghui Superstores, Ximai Food, and Sun Paper [18].

Group 1 - Pork stocks experienced a significant upward trend, with Bangji Technology (603151) hitting the daily limit increase [1] - Shennong Group (605296) rose over 6%, indicating strong market interest [1] - Juxing Agriculture (603477) and Luoniushan (000735) both increased by more than 4%, reflecting positive sentiment in the sector [1] - Zhenghong Technology (000702) and Wens Foodstuff Group (300498) also saw gains, contributing to the overall bullish trend in pork-related stocks [1]

Group 1 - The A-share pork sector continues to rise, with Bangji Technology increasing by over 8% [1] - Other companies such as Shennong Group, Juxing Agriculture, Luoniushan, Dongrui Shares, Zhenghong Technology, and Wens Foodstuff also experienced gains [1]