Shenwan Hongyuan Securities·2025-11-11 06:49Investment Rating - The report maintains a "positive" outlook on the agricultural, forestry, animal husbandry, and fishery sectors, with specific attention to the potential for value reassessment in leading pig farming companies [2][3]. Core Insights - The agricultural sector's net profit for the first three quarters of 2025 increased by 11% year-on-year, with five sub-sectors showing profit growth, including animal health (+96%) and agricultural processing (+50%) [11][12]. - The pig farming industry is experiencing significant challenges, with a notable decline in pig prices leading to widespread losses among companies, although some are still managing to maintain profitability due to cost advantages [3][19]. - The pet food sector continues to show strong domestic sales growth, while exports are negatively impacted by increased tariffs, highlighting a divergence in performance between domestic and international markets [3][6]. Summary by Sections 1. Agricultural Sector Overview - The agricultural sector's net profit for Q1-Q3 2025 reached CNY 369.4 billion, reflecting an 11% increase year-on-year, with most sub-sectors reporting profit growth [11][12]. - In Q3 2025, the sector's net profit dropped by 58% year-on-year, with significant declines in the feed and breeding industries [13][14]. 2. Key Sub-Sectors Performance 2.1 Pig Farming - The pig farming sector saw a 30% increase in the number of pigs slaughtered in the first three quarters of 2025, but Q3 prices fell sharply, leading to a 68.4% drop in net profit for the quarter [21][16]. - The average profit per pig for self-breeding operations was approximately CNY 60 per head, but this dropped to CNY 43 in Q3, indicating a significant decline in profitability [32][33]. 2.2 Chicken Farming - The white feather chicken segment is facing price declines, but downstream companies are seeing profit recovery due to improved cost structures [53][59]. - The yellow feather chicken segment is experiencing a significant downturn, with profits down by 75.2% year-on-year for the two listed companies in this category [3][59]. 2.3 Pet Food - The domestic pet food market remains robust, with a 17.7% increase in revenue for the first three quarters of 2025, while exports to the U.S. fell by 25.6% due to tariffs [3][6]. - Leading domestic brands are gaining market share, with significant growth in online sales [5][6]. 2.4 Animal Health - The animal health sector reported a 70.2% increase in net profit, driven by high livestock inventory levels and the introduction of new products [4][3].