Investment Rating - The report gives an "Overweight" rating for the agricultural sector, indicating it is expected to outperform the overall market [2][4]. Core Insights - The agricultural sector index rose by 0.6%, while the Shanghai and Shenzhen 300 index remained flat. Notable stock performances included a 100.2% increase for Huisheng Biological and a 23.7% increase for Xiaoming Co. [4] - The report emphasizes focusing on the pet food sector and monitoring the performance of pig farming as egg chick prices remain high. The profitability in pig farming is expected to decline, potentially leading to losses in Q2 [4][2]. - The report highlights the significant drop in the import of parent stock chickens due to avian influenza, which is expected to impact the supply chain and lead to price increases for egg chicks starting from Q4 2024 [4][2]. Summary by Sections Agricultural Stock Market Performance - The agricultural sector index increased by 0.6%, with the top five gainers being Huisheng Biological (+100.2%), Xiaoming Co. (+23.7%), and others. The top five losers included Langyuan Co. (-19.2%) and Kaichuang International (-18.3%) [4][11]. Investment Analysis - The report suggests focusing on the pet food market and monitoring pig farming. The profitability in pig farming has decreased to below 50 CNY per head, with expectations of further declines in Q2 [4][2]. - The egg chick prices have been rising, with the average price in March 2025 at 4.37 CNY per chick, a year-on-year increase of 35.8% [4][2]. Key Company Reports - A detailed report on Huisheng Biological indicates a recovery in demand and new product launches that are expected to drive growth in the veterinary drug sector. The company has also expanded into the pet medicine market, which is anticipated to provide new revenue streams [4][2]. Pig Farming Insights - The report notes that pig prices are experiencing slight fluctuations, with the average price for external three yuan pigs at 14.55 CNY/kg, reflecting a week-on-week decrease of 0.68% [4][2]. - The report advises monitoring the balance sheets of leading pig farming companies and their shareholder returns, as the sector is expected to face a downturn in the short term [4][2]. Chicken Farming Insights - The report indicates that chicken prices are stabilizing at low levels, with the average price for white feather chicken chicks at 2.84 CNY per chick, showing a week-on-week decrease of 1.4% [4][2]. - The report emphasizes the importance of consumer demand, particularly in the restaurant and catering sectors, for the recovery of the chicken farming sector [4][2].