Shenwan Hongyuan Securities·2025-07-28 06:13Investment Rating - The report maintains an "Overweight" rating for the agricultural sector, indicating a positive outlook compared to the overall market performance [4][5]. Core Insights - The report highlights the ongoing "de-involution" process in the pig farming industry, recommending high-quality pig farming companies as key investment opportunities. The Ministry of Agriculture and Rural Affairs has emphasized the need for capacity control measures in the industry, which is expected to enhance profitability and stability for leading companies [4][5]. - The report notes a rebound in the prices of yellow feathered chickens, suggesting a potential turnaround in profitability as the traditional consumption peak approaches [4][5]. - The pet food sector is experiencing mixed performance, with export figures showing a decline due to trade tensions, but domestic growth remains promising [4][5]. Summary by Sections Agricultural Stock Market Performance - The Shenwan Agricultural Index rose by 3.6%, outperforming the CSI 300 Index, which increased by 1.7%. The top five gainers included ST Tianshan (39.8%), Dayu Water-saving (36.2%), and Shennong Group (15.4%) [4][5]. Pig Farming Industry - The report emphasizes the importance of the "de-involution" process in the pig farming sector, with a focus on capacity control measures. The average price of live pigs was reported at 14.10 yuan/kg, a decrease of 2.0% week-on-week [4][5]. Poultry Farming - White feather chicken prices have shown a seasonal rebound, with the average sales price for broiler chicks at 1.60 yuan/chick, up 28.0% week-on-week. Yellow feather chicken prices have also increased, indicating a potential for profitability as the consumption season approaches [4][5]. Pet Food Industry - In June 2025, China's pet food export value was 824 million yuan, down 10.0% month-on-month and 20.2% year-on-year. The cumulative export value for the first half of 2025 was 4.999 billion yuan, showing a slight increase of 0.4% year-on-year [4][5].