Investment Rating - The industry investment rating is "Overweight" [5] Core Views - The report highlights a divergence in the data for breeding sows, with a 0.96% decrease in the breeding sow inventory at the end of Q1, marking the end of three consecutive quarters of increase. This indicates a potential shift in production capacity [1][2] - Despite the recent increase in pig prices, the report suggests that the downward trend in prices may be difficult to reverse in the future due to increased supply from rising breeding sow inventories and piglet numbers [1][3] - The report emphasizes the importance of monitoring the official start of production capacity reduction, which could present investment opportunities in companies such as Muyuan Foods, Wens Foodstuff Group, Juxing Agriculture, and Shennong Group [1][3] Summary by Sections Breeding Sow Inventory - As of the end of Q1, the national breeding sow inventory was reported at 40.39 million heads, a decrease of 390,000 heads or approximately 0.96% from the previous quarter, ending a trend of increases observed from Q2 to Q4 of the previous year [2] - Third-party monitoring data shows mixed results, with some reporting increases while others indicate a decrease, suggesting a more accurate reflection of actual production capacity trends [2] Pig Prices - Post-Spring Festival, pig prices have remained stable, fluctuating between 14.5 to 14.7 yuan per kilogram, with a brief increase to 15 yuan per kilogram around mid-April, which was stronger than market expectations [3] - The report attributes the stability in prices to factors such as low frozen product inventories and increased market demand, although it warns that the overall trend may still be downward due to rising supply [3] Investment Recommendations - The report recommends focusing on companies that may benefit from the anticipated changes in production capacity, specifically highlighting Muyuan Foods, Wens Foodstuff Group, Juxing Agriculture, and Shennong Group as key investment opportunities [1][3][8]

Investment Rating - The report maintains a "Recommended" rating for the agriculture, forestry, animal husbandry, and fishery industry [1] Core Views - The report highlights the weak fluctuation of pig prices, with expectations of a downward trend in the short term and a long-term weak operation in 2025 due to increased supply and weak demand [4][14] - The poultry sector may see price improvements due to the impact of tariffs and a shortage of quality breeding stock caused by avian influenza [5][28] - The animal health sector is expected to benefit from improved downstream demand and external expansion opportunities, with rising prices for key products like Tylosin [6][41] - The planting sector is experiencing price fluctuations for major grains, with a focus on the commercialization of genetically modified seeds [8][46] - The feed sector is seeing a decline in prices, with recommendations for companies like Haida Group [8][49] - The pet market continues to grow rapidly, with strong performance from domestic brands and recommendations for companies in the pet food and medical sectors [8][54][57] Summary by Sections Pig Industry - Pig prices are expected to adjust slightly, with a forecast of weak performance in 2025 due to increased supply [4][14] - As of April 10, 2025, the average price of live pigs is 14.6 CNY/kg, with no change from the previous week [14] Poultry Industry - The poultry sector may see price increases due to tariff impacts and a lack of quality breeding stock [5][28] - The average price of broiler chickens is 3.75 CNY/lb, reflecting a weekly increase [28] Animal Health - The animal health sector is experiencing improved profitability, with Tylosin prices rising significantly [6][41] - The report suggests focusing on companies with expected external expansion, such as Reap Bio [6] Planting Sector - Major grain prices are fluctuating, with corn priced at 2199 CNY/ton and wheat at 2422 CNY/ton [8][46] - The report recommends companies involved in genetically modified seed development [8] Feed Sector - Feed prices are declining, with pig feed at 3.35 CNY/kg [8][49] - The report suggests focusing on companies like Haida Group due to expected industry consolidation [8] Pet Industry - The pet market is projected to reach 300.2 billion CNY in 2024, with a growth rate of 7.5% [8][54] - Recommendations include companies like Guobao Pet and Zhongchong Co., which are experiencing significant growth [8][57]

智通财经APP获悉，光大证券发布研报称，从行业成长角度来看，生猪养殖行业正处于规模化加速过程 中，龙头企业通过一体化整合，正在向"养殖-屠宰-流通"全产业链延伸，未来成长空间广阔。从周期角 度来看，2024年行业迎来景气回升，但随后产业端迅速补充母猪产能、提升生产效率，导致25年H1开 始全国生猪供给压力重回高位，低价预期之下，去产能逻辑再度兑现具备确定性。考虑到2024年行业高 景气持续性较短，养殖主体资产负债表修复有限，在此背景下，25年行业一旦再度步入深亏，届时的产 能去化极有可能表现为猪舍等长期资产的出清，而更为彻底的产能出清会大幅提升行业在下轮周期中的 景气持续性。 光大证券主要观点如下： 美国生猪养殖业的规模化启示 风险分析：重大动物疫情发生风险;原料价格波动风险;生猪价格不及预期;生猪出栏量不达预期。 对标美国生猪养殖产业规模化进程，该行认为当前中国生猪养殖集中度仍有较大的提升空间。在行业长 期规模化趋势下，行业各方面也都将发生深刻变革： (1)成本：规模化加速阶段也是养殖效率提升最快的阶段，有望带动实际成本的下降。规模化完成后， 行业养殖技术的革新会推动养殖效率的进一步提升，但整体优化幅度有所 ...

Core Viewpoint - The livestock farming sector is showing strong performance in the market, with related ETFs experiencing significant gains today, particularly in the context of domestic demand recovery [1][3]. Group 1: ETF Performance - Livestock farming ETFs have shown robust performance, with all four related ETFs rising over 1% in half a day [1]. - Specific ETF performances include: - Livestock Farming ETF (516670) up by 1.44% to 0.634 - Breeding ETF (159865) up by 1.4% to 0.578 - Livestock ETF (159867) up by 1.38% to 0.587 - Breeding ETF (516760) up by 1.32% to 0.614 [2]. Group 2: Market Trends and Investment Logic - The overall scale of livestock ETFs has remained stable this year, with minimal changes in shares, particularly the largest Breeding ETF (159865), which saw a decrease of just over 30 million shares [3]. - The investment logic indicates that by 2025, pig prices may enter a loss zone, leading to a focus on capacity reduction within the industry. Long-term trends suggest that cost management will become increasingly critical, with low-cost companies likely to achieve better profits and higher valuation premiums [3]. - In the poultry sector, the decline in feed costs and improved breeding efficiency have led to a significant reduction in the cost of raising broilers, with expectations of stable cost reductions this year, especially for leading companies with full industry chain advantages [3]. Group 3: Index and Weighting - The CSI Livestock Farming Index selects listed companies involved in livestock feed, veterinary drugs, and livestock farming to reflect the overall performance of related companies [4]. - The index has demonstrated the best historical returns within the agricultural sector while also exhibiting lower drawdowns, resulting in superior Sharpe ratios compared to other agricultural indices [4]. - Major weighted stocks in the CSI Livestock Farming Index include: - Haida Group (002311) with a weight of 11.28% - Muyuan Foods (002714) with a weight of 10.17% - Wens Foodstuffs (300498) with a weight of 10.15% - New Hope Liuhe (000876) with a weight of 66.8% [5].

Group 1 - The China Livestock Breeding Index (930707) has seen a strong increase of 2.15%, with stocks such as Xiangjia Co., Ltd. (002982) hitting the daily limit, and other stocks like Mido Li (300381) and Blue Biological (603739) also rising significantly [1] - The Livestock ETF (159867) rose by 2.07%, with a trading volume reaching 16.42 million yuan, indicating strong market interest [1] - The current price-to-earnings ratio (PE-TTM) of the Livestock ETF is 19.19, which is at a historical low, being below 98.21% of the time over the past year [1] Group 2 - As of March 31, 2025, the top ten weighted stocks in the China Livestock Breeding Index account for 69.05% of the index, with major companies including Haida Group (002311) and Wens Foodstuffs Group (300498) [2] - New Hope reported a significant increase in revenue for the fiscal year 2024, achieving approximately 103.06 billion yuan in total revenue and a net profit of about 474 million yuan, marking a year-on-year growth of 90.05% [1]

Investment Rating - The report maintains a "positive" investment rating for the agriculture, forestry, animal husbandry, and fishery industry, indicating an expectation of performance that exceeds the market benchmark by more than 5% in the next six months [5]. Core Insights - In February 2025, the average price of live pigs decreased due to oversupply, while the price of piglets remained strong. The average prices for piglets, live pigs, and pork were 36.21 CNY/kg, 16.00 CNY/kg, and 27.46 CNY/kg respectively, with month-on-month changes of 6.59%, -3.68%, and -1.57% [11][16]. - The supply side is seeing a gradual recovery in post-holiday pig sales, leading to an overall sufficient market supply. However, demand has been slow to recover, with a slaughtering rate of 20.24% in February [13][19]. - The report anticipates that the pig prices in the coming months will rely on the entry of secondary fattening [13][21]. Summary by Sections Supply and Demand Performance - February saw a slight price adjustment in live pigs and pork due to a post-holiday consumption decline, while piglet prices showed resilience [11][16]. - The supply of pigs is expected to increase in March, putting pressure on the supply side [13][19]. Cost and Price Trends - The report highlights that the imposition of tariffs on certain imported agricultural products may lead to increased breeding costs, with expectations of a rise in costs for 2025 [16][19]. - The average sales prices for major pig farming companies in February showed a decline, with specific figures for companies like Muyuan, Wens, and New Hope [24][25]. Future Market Outlook - The report predicts that high-quality production capacity will maintain profitability in 2025, with leading companies expected to benefit from valuation recovery as consumption policies are implemented [21][33]. - The report suggests focusing on leading companies with cost advantages and high performance, such as Muyuan, Wens, and Tian Kang Biological [21][34].

Investment Rating - The report maintains an "Overweight" rating for the agriculture, forestry, animal husbandry, and fishery industry, expecting the industry index to outperform the market index by over 10% in the next six months [39]. Core Views - The SW agriculture, forestry, animal husbandry, and fishery industry outperformed the CSI 300 index, rising by 1.72% from February 28, 2025, to March 13, 2025, exceeding the index by approximately 3.15 percentage points [7][8]. - Most sub-sectors recorded positive returns during the same period, with animal health, feed, aquaculture, and fishery sectors increasing by 4.45%, 3.22%, 2.45%, and 0.99% respectively, while agricultural product processing and planting sectors saw declines of 0.5% and 2.11% [8][9]. - The overall price-to-book (PB) ratio for the SW agriculture, forestry, animal husbandry, and fishery industry is approximately 2.47 times, indicating a recent recovery and positioning at about 54.6% of the historical valuation center since 2006, which is considered historically low [12]. Industry Key Data - **Pig Farming**: The average price of external three yuan pigs fluctuated from 14.57 CNY/kg to 14.67 CNY/kg during the reporting period. The cost of corn was 2263.04 CNY/ton, showing an upward trend, while soybean meal was priced at 3470 CNY/ton, reflecting a slight decline. The profit for self-bred pigs was 35.15 CNY/head, showing a slight increase, while the profit for purchased piglets was -34.44 CNY/head, indicating a decrease [15][16][19]. - **Poultry Farming**: The average price of broiler chicks rose by 21.4% to 2.79 CNY/chick, while the average price of layer chicks fell by 0.6% to 4.3 CNY/chick. The average price of white feather broilers increased by 14.5% to 7.11 CNY/kg, with a profit of -0.51 CNY/chick, which is an improvement compared to the previous period [21][25]. - **Aquaculture**: The average wholesale price for crucian carp and carp remained stable at 19.66 CNY/kg and 14.21 CNY/kg respectively as of March 13, 2025 [27]. Company Insights - **Muyuan Foods (牧原股份)**: The company is recognized as a leading domestic pig farming enterprise with cost advantages and substantial cash reserves, expected to maintain its leading position [40]. - **Wens Foodstuff Group (温氏股份)**: The company is expanding its pig production capacity steadily and has strong cost control capabilities, maintaining its leading position in the yellow feather chicken business [40]. - **Haid Group (海大集团)**: The company is a leading player in the feed industry, with market share expected to continue to grow [40]. - **Yisheng (益生股份)**: The company is a leading enterprise in the white feather chicken breeding sector [40].

Summary of Conference Call Notes Industry Overview - The discussion primarily focuses on the **basic materials industry**, particularly **coal, steel, cement, and iron ore** [1][7]. - There is a consensus that the **demand outlook** for basic materials is not expected to change significantly this year, with attention on **supply-side changes** [1]. Key Points on Coal Industry - The coal sector is anticipated to experience a new round of **supply-side reforms**, although the likelihood of significant changes is lower compared to steel and cement [1]. - Historical context from the **2016-2017 supply-side reforms** is referenced, highlighting the weak demand for electricity coal due to declining real estate construction and poor performance in downstream sectors [2]. - The **elasticity of electricity demand** has improved in recent years, driven by emerging industries such as **renewable energy, AI, and big data**, leading to higher coal prices [2]. Supply and Demand Dynamics - In the initial phase of the 2016 reforms, coal production capacity utilization was around **60%**, with total capacity at **5.7 billion tons** and actual production at approximately **3.75 billion tons** [3]. - The coal workforce decreased from **4.4 million** to below **3 million** due to reforms, indicating effective personnel management [3][5]. - Current coal supply is described as **relatively loose**, with recent price declines attributed to local government interventions encouraging increased production after a **3.5% year-on-year drop** in output last year [5][6]. Current Market Conditions - The coal industry is currently facing a **high production capacity utilization rate** of around **86-87%**, but is experiencing a seasonal demand weakness due to a warm winter [6]. - The industry is under pressure to balance **production, cost, and safety**, with concerns that maintaining high output could lead to safety incidents [6][7]. - The expectation is that the coal sector will remain stable in the near term, with potential investment opportunities arising from current low prices [7]. Future Outlook - The potential for further supply-side reforms in the coal industry is limited due to the low levels of new capacity additions in recent years, averaging less than **50 million tons** annually compared to **80 million tons** previously [7]. - The overall sentiment is that the coal industry is in a favorable operational phase, with opportunities for profitability in the coming year [7]. Additional Insights - The team conducted field research in **South America** regarding various minerals, including **copper, iron ore, and lithium**, which will be shared in future discussions [8].

Summary of Conference Call on Swine Industry Industry Overview - The conference call focuses on the swine industry, specifically the current market conditions and trends in pig farming and pricing. Key Points and Arguments 1. **Current Market Conditions**: The swine market entered a secondary fattening phase starting February 10, with prices at 14.6 CNY/kg, but farms are experiencing losses due to high costs. As of now, prices have slightly decreased to 14.5 CNY/kg [2][3] 2. **Utilization of Blue Coupons**: The utilization rate of blue coupons for secondary fattening increased from 10%-15% to 20%-30% between January 20 and February 28, with significant growth in regions like Heilongjiang and Liaoning [2][3] 3. **Slaughtering Plans**: There is a notable increase in slaughtering plans from January to March, with Shanghai Steel Union reporting a month-on-month growth of 10.95% and Yongyi reporting 14.25%. This indicates significant pressure on slaughtering rates in March and continued growth into April [4] 4. **Weight Trends**: Post-Spring Festival, the average weight of pigs has been rising, reaching 127.06 kg by March 6, the highest since 2019. The average post-slaughter weight was recorded at 89.57 kg as of February 28, indicating a general trend of increasing weight [5] 5. **Accumulation Phenomenon**: The market is experiencing both volume and weight accumulation, particularly evident after the Spring Festival. It is expected that this accumulation will gradually be released in March and April, impacting the market [6] 6. **Fat and Lean Price Differential**: The average fat and lean price differential was approximately 0.46 CNY/jin from February 28 to March 6, maintaining a positive value post-Spring Festival. The absolute price differential has been narrowing for about a month [7] 7. **Pre-Spring Festival Sales**: Ahead of the Spring Festival, farmers anticipated potential losses and thus sold pigs early, leading to a 3% year-on-year increase in slaughtering volume at Muyuan's slaughterhouse from December to January [8] 8. **Feed Data Impact**: Feed data turned positive in January and February, with rising prices for corn and soybean meal. This has led to increased feed consumption, aligning with the overall accumulation in the swine industry [9] 9. **Future Supply Expectations**: In the coming months, the supply side is expected to be in a bottleneck state, particularly in Sichuan where slaughter weights have exceeded 135 kg. Prices may drop to between 13-13.5 CNY/kg as the backlog is released, with secondary fattening and frozen storage demand providing support [10] 10. **Impact on Company Stock Prices**: As production capacity is reduced and piglet prices decline, a strong phase of capacity reduction is anticipated in March and April. If pig prices exceed 14-15 CNY/kg, it could positively impact the stock prices of companies like Muyuan, Wens, Shennong, and Juxing, which have lower costs and growth potential [11] Other Important Insights - The overall trend indicates a complex interplay of rising weights, price pressures, and market expectations that could influence investment opportunities in the swine industry. The focus on cost management and market timing will be crucial for stakeholders in this sector.