Investment Rating - The investment rating for the agriculture industry is "Positive" (maintained) [1] Core Viewpoints - The agriculture sector's profit has contracted significantly due to the unexpected decline in pig prices, leading to a year-on-year profit drop of 58.8% in Q3 2025 [17] - The overall revenue for the agriculture industry in Q1-Q3 2025 reached 872.718 billion, with a year-on-year increase of 6.44%, while the net profit attributable to shareholders was 35.477 billion, up 10.63% year-on-year [5][17] - The average price of pigs in Q3 2025 was 13.81 yuan/kg, down 28.89% year-on-year, with the lowest price of 10.84 yuan/kg recorded on October 13, 2025 [5][17] Summary by Sections Overall Industry - In Q3 2025, the agriculture sector's profit contracted by 58.8% due to falling pig prices [17] - The industry's sales gross margin for Q1-Q3 2025 was 11.79%, up 0.12 percentage points year-on-year, while the net profit margin was 4.21%, up 0.21 percentage points year-on-year [20] - The industry’s net asset return rate was 6.75%, an increase of 0.28 percentage points year-on-year [20] Subsector Analysis - The pig farming sector has entered a de-stocking cycle, while the feed and animal health sectors are experiencing post-cycle operational improvements [6][25] - In Q1-Q3 2025, the revenue growth rates for pet food, animal health, feed, and planting were 20.34%, 17.69%, 12.38%, and 9.50% respectively [6][25] - The net profit growth rates for animal health, agricultural product processing, and feed sectors were 69.40%, 59.33%, and 54.17% respectively [6][25] Pig Farming - In Q1-Q3 2025, pig farming enterprises achieved revenue of 341.269 billion, a year-on-year increase of 8.32%, with a net profit of 22.175 billion, up 14.29% year-on-year [7][28] - The overall pig output from 12 enterprises was 123.9948 million heads, a year-on-year increase of 19.45% [41] - The profitability of the pig farming sector has declined due to falling prices, with average gross margin, net margin, and ROE at 12.25%, 4.08%, and 5.87% respectively [31] Poultry Farming - In Q1-Q3 2025, revenue for poultry farming reached 40.215 billion, a year-on-year increase of 6.92%, while net profit was 1.646 billion, down 9.52% year-on-year [44] - The profitability metrics for poultry farming were a gross margin of 12.61%, a net margin of 2.83%, and a return on equity of 4.18% [46] Feed Industry - The feed sector generated revenue of 152.955 billion in Q1-Q3 2025, reflecting a year-on-year increase of 11.69%, with a net profit of 4.505 billion, up 8.72% year-on-year [8][57] - The average gross margin, net margin, and ROE for feed enterprises were 9.41%, 1.17%, and 3.65% respectively [57] Animal Health - The animal health sector achieved revenue of 9.977 billion in Q1-Q3 2025, a year-on-year increase of 14.08%, with a net profit of 1.265 billion, up 45.51% year-on-year [63] - The average gross margin, net margin, and ROE for animal health enterprises were 53.42%, 17.77%, and 4.35% respectively [63] Seed Industry - The seed sector reported revenue of 6.814 billion in Q1-Q3 2025, down 5.82% year-on-year, with a net profit of -880 million, a decline of 53.87% year-on-year [68]