Core Viewpoint - The A-share market concluded the Year of the Snake with all major indices showing positive performance, with the Shanghai Composite Index rising by 25.58%, the Shenzhen Component Index increasing by 38.84%, and the ChiNext Index leading with a remarkable gain of 58.73% [1]. Summary by Category Market Performance - The Year of the Snake saw significant gains across major indices, with the Shanghai Composite Index up by 25.58%, the Shenzhen Component Index up by 38.84%, and the ChiNext Index up by 58.73% [1]. Stock Performance - Despite the overall positive index performance, certain stocks experienced substantial declines. The top ten stocks with the largest declines, excluding newly listed stocks and ST stocks, are: 1. Kang Le Wei Shi 2. Hua Lian Shares 3. Tian Jian Shares 4. Wan Tai Biological 5. Chuan Yin Holdings 6. Guai Bao Pet 7. Yi Hua Lu 8. Ai Bo Medical 9. Long Da Mei Shi 10. Bei Shi Da Ke [1].

Group 1 - The core transaction of Guibao Pet Company on February 13 involved a block trade of 146,900 shares, with a total transaction value of 8.9345 million yuan, accounting for 6.68% of the total trading volume for that day [1][2] - The transaction price was 60.82 yuan per share, which remained stable compared to the market closing price of 60.82 yuan [1][2]

Investment Rating - The report maintains an investment rating of "Outperform" for the agriculture, forestry, animal husbandry, and fishery industry [8] Core Insights - The report highlights the stabilization and rebound of pig prices, with the January average price for external three yuan pigs at 12.68 yuan/kg, reflecting a month-on-month increase of 9.58% but a year-on-year decrease of 19.52% [8][21] - The "No. 1 Document" emphasizes the promotion of biological breeding industrialization, which is crucial for achieving self-sufficiency in seed sources and enhancing grain production capacity [19][20] - The pet food sector shows a positive trend, with December 2025 pet food exports reaching 37,700 tons, a year-on-year increase of 15.49% [35] Summary by Sections Market Review - In January 2026, the agriculture, forestry, animal husbandry, and fishery index rose by 1.63%, ranking 23rd among 30 sectors, while the Shanghai and Shenzhen 300 index increased by 1.65% [11] - The animal health sector performed well, while the forestry processing sector saw declines [11] Biological Breeding - The "No. 1 Document" calls for the implementation of actions to revitalize the seed industry and accelerate the breeding and promotion of breakthrough varieties [19][20] - The focus is on stabilizing grain and oil production and enhancing yield levels [19] Livestock and Poultry Data Tracking - Pig prices showed a rebound in January, with a tight supply supporting price increases [21] - The average price of white feather chickens rose to 3.73 yuan/jin, with a month-on-month increase of 1.36% [28] Pet Food Exports - Pet food exports maintained a year-on-year growth, with total exports for 2025 reaching 361,300 tons, a 7.78% increase [35] Investment Recommendations - The report suggests focusing on companies such as Muyuan Foods, Pulaike, Qiule Seed Industry, Guobao Pet, Zhongchong Co., and Petty Holdings, as the industry’s price-to-earnings and price-to-book ratios are below historical averages, indicating potential for valuation recovery [8]

Investment Rating - The report maintains an investment rating of "Outperform" for the agricultural, forestry, animal husbandry, and fishery industry [8] Core Insights - The report highlights the stabilization and rebound of pig prices, with the "No. 1 Document" reiterating the importance of biological breeding [8] - The report emphasizes the significance of the biological breeding industry for achieving self-sufficiency in seed sources and enhancing grain production capacity [19][20] - The report indicates that the industry is currently undervalued, with price-to-earnings (P/E) and price-to-book (P/B) ratios below historical averages, suggesting potential for valuation recovery [8] Summary by Sections Market Review - In January 2026, the agricultural, forestry, animal husbandry, and fishery index rose by 1.63%, underperforming the Shanghai and Shenzhen 300 index, which increased by 1.65% [11] - The animal health sector showed strong performance, while the timber processing sector lagged [11] Biological Breeding - The "No. 1 Document" emphasizes the need to promote the industrialization of biological breeding, which is crucial for achieving self-reliance in seed sources and enhancing grain production [19][20] Livestock Farming Data Tracking - In January 2026, the average price of pigs was 12.68 yuan/kg, reflecting a month-on-month increase of 9.58% but a year-on-year decrease of 19.52% [21] - The average price of white feather chickens rose to 3.73 yuan/jin, with a month-on-month increase of 1.36% and a year-on-year increase of 2.75% [28] Pet Food Exports - In December 2025, pet food exports reached 37,700 tons, a year-on-year increase of 15.49%, while the total export value for the year was 1.41 billion USD, a decrease of 4.62% [35] Investment Recommendations - The report suggests focusing on companies such as Muyuan Foods, Pulike, Qiule Seed Industry, Guobao Pet, Zhongchong Co., and Petty Co., as they are expected to benefit from the industry's recovery [8]

Investment Rating - The report maintains an "Overweight" rating for the agriculture, forestry, animal husbandry, and fishery industry [1][53]. Core Insights - The SW agriculture, forestry, animal husbandry, and fishery industry slightly underperformed the CSI 300 index, declining by 2.88% from January 30, 2026, to February 12, 2026, which is approximately 2.16 percentage points lower than the index [7][14]. - Among the sub-sectors, only the fishery sector recorded positive returns, increasing by 0.27%, while feed, breeding, planting, agricultural product processing, and animal health sectors all experienced negative returns, with declines of 1.36%, 2.02%, 4.45%, 4.8%, and 7.3% respectively [15][19]. - The overall price-to-book (PB) ratio for the industry is approximately 2.61 times, reflecting a slight decline in valuation, and is at about 58.7% of the historical average since 2006, indicating a relatively low historical valuation level [22][24]. Industry Important Data - **Pig Farming**: - The average price of the national external three-line pigs fell from 12.52 CNY/kg to 11.57 CNY/kg during the reporting period [25]. - The cost of corn and soybean meal slightly decreased, with corn priced at 2372.16 CNY/ton and soybean meal at 3164 CNY/ton as of February 12, 2026 [27]. - Profitability for self-bred pigs was reported at -98.32 CNY/head, while for purchased piglets, it was 53.1 CNY/head, both showing a decline compared to the previous week [31]. - **Poultry Farming**: - The average price of broiler chicks increased to 2.4 CNY/chick, while the price for layer chicks remained stable at 3.2 CNY/chick as of February 13, 2026 [33]. - The average price for white feather broilers decreased to 7.48 CNY/kg, with profitability reported at -0.2 CNY/chick, indicating a decline from the previous week [36]. Industry News - The report highlights that the breeding capacity of sows is expected to continue decreasing in 2025, leading to a gradual reduction in pig supply and a potential increase in pig prices in 2026, which may improve breeding profitability [53]. - The report emphasizes the importance of monitoring the capacity reduction and the expected profitability improvement, particularly for leading companies in pig farming and poultry sectors [53]. Company Highlights - Key companies to watch include: - Muyuan Foods (牧原股份, 002714): A leading pig farming company with cost and scale advantages. - Wens Foodstuff Group (温氏股份, 300498): A major player in both pig and poultry farming with strong cost control. - Haida Group (海大集团, 002311): A leading feed company expected to maintain steady market share growth. - Shengnong Development (圣农发展, 002299): A leader in the white feather broiler industry with a strong supply chain. - Reap Bio (瑞普生物, 300119): A leader in the animal health sector with a growing product matrix for pet health [54].

Group 1 - The company, Guibao Pet (301498.SZ), clarified that it has not established a factory in Ohio, USA [1] - The company's high-end pet food project in New Zealand (Phase I) is currently undergoing approval and filing procedures with local government authorities [1] - The total construction period for the New Zealand project is set to be five years [1]

Core Viewpoint - Yiyi Co., Ltd. has announced the termination of its planned acquisition of 100% equity in Gao Ye Jia, a pet food company, due to discrepancies in operational expectations and valuation agreements with the sellers [3][4]. Group 1: Acquisition Details - The acquisition was initially announced in October 2025, with Yiyi planning to purchase Gao Ye Jia through a combination of share issuance and cash payment, including a goodwill payment of 30 million yuan to the sellers [3]. - After four months of planning, Yiyi decided to terminate the acquisition due to Gao Ye Jia's sales adjustments during the 2025 Double Eleven shopping festival and the impact of new product promotions on its financial performance [3][4]. - Yiyi and the sellers could not reach an agreement on key commercial terms, leading to the decision to terminate the transaction in a mutual and amicable manner [3][4]. Group 2: Company Performance - Yiyi Co., Ltd. reported a revenue of 1.306 billion yuan for the first three quarters of 2025, a slight decline of 0.72% year-on-year, while the net profit attributable to shareholders was 156 million yuan, an increase of 3.82 million yuan [8]. - The company’s revenue from its core pet hygiene business was 417 million yuan, down 4.17% year-on-year, with a net profit of 54 million yuan, a decrease of 2.23% [8]. - Despite being a leader in the pet hygiene sector, Yiyi's revenue and profit figures are relatively small compared to major players in the pet food market, such as Guai Bao Pet and Zhong Chong Co., Ltd., which reported revenues of 4.737 billion yuan and 3.86 billion yuan respectively for the same period [8]. Group 3: Future Outlook - Yiyi Co., Ltd. aims to establish a comprehensive "supplies + food + medical" industry chain, but the termination of the Gao Ye Jia acquisition puts its pet food market expansion plans on hold [9]. - The company has announced a partnership with Beijing Fangyuan Jinding to invest 70.2 million yuan in Ruipai Pet Hospital, a leading pet hospital operator in China, which could enhance Yiyi's distribution channels and brand influence [9]. - The future of Yiyi's investment in the pet medical sector and potential adjustments to its pet food strategy remain uncertain following the acquisition's termination [9].

Market Overview - The CSI 300 index decreased by 1.33% during the week of February 2-8, while the agriculture, forestry, animal husbandry, and fishery sector fell by 1.92%, ranking 23rd among sectors [5] - The top-performing sub-industries included food and feed additives, broiler farming, pig farming, aquaculture, and grain and oil processing [5] Pig Farming Industry - Pig prices continued to decline, with self-breeding pig farming profits showing losses. As of February 6, the average prices for external three yuan pigs in Sichuan, Guangdong, and Henan were 11.65, 11.96, and 12.38 yuan/kg, reflecting week-on-week decreases of 4.12%, 1.64%, and 1.98% respectively [13] - The average pork price was 18.34 yuan/kg, down 1.45% from the previous week. The average wholesale price for piglets remained stable at 16.50 yuan/kg [13] - As of February 6, self-breeding farming profits were -38.09 yuan/head, a decrease of 63.19 yuan/head from the previous week, while profits from purchasing piglets were 91.42 yuan/head, down 32.71 yuan/head [13] Feed Industry - The competition in the feed industry has shifted from product competition to value chain competition, leading to accelerated industry consolidation. Market share is increasingly concentrated among leading companies with advantages in R&D, scale, and integrated services [2] - Haida Group is expected to benefit from this trend due to its efficient internal management, effective business incentives, and strong service advantages in the supply chain [2] Broiler Farming Industry - The price of white feather broilers decreased, with a weekly price of 7.53 yuan/kg, down 2.71%. The profit from broiler farming was -0.26 yuan/bird, a significant drop of 166.67% from the previous week [29] - The price of eggs was 8.2 yuan/kg, down 6.82% from the previous week [29] Aquaculture Industry - In the marine product sector, prices for sea cucumbers and shrimp remained stable at 120 yuan/kg and 320 yuan/kg respectively. In freshwater products, prices for various fish showed slight increases [45] - The international spot price for fish meal was 2239.77 USD/ton, unchanged from the previous week [45] Grain and Oil Processing - Grain prices showed mixed trends. As of February 6, corn was priced at 2368.43 yuan/ton (-0.33%), soybeans at 4072.11 yuan/ton (unchanged), and wheat at 2531.11 yuan/ton (+0.05%) [55] - The price of soybean meal was 3159.14 yuan/ton, down 1.19%, while the prices for both soybean oil and rapeseed oil decreased by 1.72% and 1.95% respectively [55]

Investment Rating - The report maintains an "Outperform" rating for the agricultural sector [4] Core Views - The agricultural sector is expected to experience a cyclical recovery, particularly in the beef and dairy markets, driven by domestic and international demand [3] - The pig farming sector is anticipated to stabilize due to capacity control measures, benefiting leading companies with improved cash flow and cost advantages [3] - Poultry supply is expected to remain stable, with potential for increased cash flow returns for leading enterprises as demand recovers [3] - The feed industry is likely to see enhanced competitive advantages for leading companies due to deeper industrialization and specialization [3] - The pet industry is identified as a growth sector benefiting from demographic trends [3] Summary by Sections Livestock - Beef prices are expected to continue rising, with the average price for fattened bulls at 25.20 CNY/kg, stable week-on-week and up 8.15% year-on-year [2] - Dairy cow depopulation is likely to accelerate, with raw milk prices expected to reach a turning point in 2026 [2] - The pig price on February 6, 2026, was 12.05 CNY/kg, down 1.31% week-on-week and down 20.67% year-on-year [13] Poultry - Chicken supply has slightly increased, with a focus on seasonal consumption recovery [13] - Egg prices in major production areas were 3.44 CNY/jin, up 6.83% week-on-week and up 19.44% year-on-year [13] Feed - Soybean meal prices are at historical lows, with potential catalysts from weather or trade factors [2] - Corn prices are expected to maintain a stable upward trend, with a current price of 2331 CNY/ton, down 0.09% week-on-week but up 8.52% year-on-year [2] Key Companies and Investment Recommendations - Recommended livestock companies include YouRan MuYe and Modern MuYe [3] - Recommended pig farming companies include HuaTong Co., DeKang Agriculture, and MuYuan Co. [3] - Recommended poultry companies include LiHua Co. and YiSheng Co. [3] - Recommended feed company is HaiDa Group [3] - Recommended pet company is GuaiBao Pet [3]

Core Viewpoint - The pet food industry in China is showing strong growth resilience despite overall consumption pressures, with an expected GMV of 30.71 billion yuan in 2025, reflecting a year-on-year increase of 10.2% [1] Long-term Outlook - The number of "new pet owners" is expected to continue growing, driven by the demographic of 20-35 year-olds, with a sustained increase in the number of graduates from 2025 to 2038 [1] - Historical data from Japan indicates that pet food prices can maintain long-term resilience, with China's current pet consumption still below that of Japan [1] Mid-term Trends - The pet food industry is undergoing a consumption upgrade, with high-end cat and dog food segments (60-100 yuan/kg) expected to outpace overall industry growth from 2024 to 2025 [2] - Innovations in production processes and raw materials are driving this consumption upgrade, reflecting the competitive landscape among domestic brands [2] Short-term Insights - The pet food market is experiencing strong growth, with online GMV projected to reach 30.71 billion yuan in 2025, and a significant increase in market share for leading platforms like Taobao and Douyin [4] - The concentration of the industry is increasing, with the top five brands capturing 25.3% of the market share, indicating a trend towards market consolidation [4] Future Industry Outlook - The trend of consumption upgrading is expected to continue, with high-end product segments showing significant growth while low-end segments face declines [6] - The market share of foreign brands is anticipated to rise, particularly in the prescription food segment, as consumer awareness increases [6] - Product innovation is becoming crucial, with functional and prescription foods likely to emerge as new industry trends [6]