Core Viewpoint - The article emphasizes that good housing requires good services, and good services necessitate quality and reasonable pricing. It predicts that the strong price limit policy for property fees in Chongqing in 2023 will not set a nationwide trend, but will encourage quality and reasonable pricing, potentially reversing market expectations for pricing and profitability in the property service industry [1][10]. Summary by Sections Policy Changes - In late 2023, Chongqing introduced a new property service fee management method, establishing a government-guided price for residential property service fees, which alters the previous market-adjusted pricing for high-level services. The highest service fee was set at 1.9 yuan per square meter per month, with potential exemptions for vacant properties [2]. Impact of Price Limits - The strong price limit policy may lead to a significant decline in the collection rate of existing property service contracts, creating negative externalities. The pricing constraints on existing contracts are deemed reasonable, as buyers have no bargaining power. However, the 1.9 yuan per square meter limit is considered outdated, as many listed companies charge above this rate. As of October 2024, 34% of local communities in Chongqing charged over 2 yuan per square meter [3]. Industry Challenges - Four main factors suggest that strong price limits are not advisable: 1. Overall property service quality in China is insufficient, with property fees/rent ratios significantly lower than in other countries, leading to rapid depreciation of housing value [4]. 2. The profitability of basic services in property companies is already low, and imposing price limits could drive out quality providers, negatively impacting living conditions [5]. 3. The complexity of establishing homeowners' committees and collective decision-making complicates the implementation of price limits on existing contracts [6]. 4. Residents often lack awareness of the quality of property services, which can lead to a misunderstanding of the implications of low property fees [6]. Future Policy Directions - The article anticipates that future policies will guide property service companies to enhance service quality and promote the concept of quality and reasonable pricing, rather than merely imposing price limits. The government has already repealed previous price limit documents, indicating a shift towards ensuring that any price limits set are above the average service costs of quality property service companies [7][8]. Investment Strategy - The article suggests that the property service sector is currently experiencing a dual low in valuation and profitability due to policy concerns and other factors. However, it is expected that there will be significant upward elasticity in the future, making it a sector worth monitoring for policy turning points [10].

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The report emphasizes the need to shift from "cyclical thinking" to focusing on financial performance, highlighting the significant differences in operational efficiency among companies in the industry [5][22] - The report suggests that the current low market attention on the pig farming sector and its relatively low valuation present investment opportunities, particularly in leading companies like Muyuan Foods and Wens Foodstuff Group [5][22] - The report indicates that the overall supply of pigs is expected to be high in the long term, leading to a weak price outlook for pigs [4][21] Summary by Sections 1.1. Swine - In February, the sample of breeding sows decreased by 0.05% month-on-month, primarily due to increased culling by leading enterprises [4][21] - The latest pig price reached 14.62 CNY/kg, with an average slaughter weight of 127.92 kg [4][21] - The report anticipates downward pressure on pig prices in the short term due to rising feed costs and increased willingness to sell among farmers [4][21] 1.2. Poultry - The price of broilers has rebounded, with chick prices increasing by 7.41% month-on-month [6][23] - The report highlights the concentration of industry profits towards upstream breeding sources, indicating a new normal in the industry [6][23] - Key investment targets include leading companies in imported breeding sources and full-chain leaders like Yisheng and Shengnong Development [6][23] 1.3. Feed - The report recommends Haida Group due to its cash flow turning point and overseas growth potential [7][26] - Fish prices have shown positive trends, with various species experiencing significant year-on-year price increases [7][24] - The report notes that the capital expansion phase has ended, and leading companies are now focusing on improving market share and cash flow [9][24] 1.4. Pets - The pet industry is expected to see significant growth driven by the post-2000 generation, with a projected doubling of market space [11][27] - The report suggests focusing on high-performing brands like Guibao Pet and Zhongchong Co., which are entering a growth phase [11][28] 1.5. Agricultural Products - The USDA's March report indicates a continued upward trend in agricultural prices, with significant reductions in corn imports expected [13][29] - The report highlights that corn and soybean prices are at historical lows, with a marginal improvement in supply-demand balance expected [13][29] Market and Price Situation - The Shanghai and Shenzhen 300 Index rose by 1.59% last week, while the Agricultural Index increased by 2.84% [30][30] - The animal health sector performed the best with a 4.20% increase [30][30]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The report highlights the rising prices of agricultural products and emphasizes the need to monitor cost changes in the breeding industry and the procurement advantages of leading feed companies [3][4] - In the pig sector, while the price difference for standard pigs is at a two-year high, there is insufficient marginal support expected during the consumption off-season, leading to potential downward pressure on pig prices [4][21] - The report suggests a shift from "cyclical thinking" to focusing on financial performance, recommending investment in leading pig farming companies such as Muyuan Foods and Wens Foodstuffs [5][22] Summary by Sections 1. Pig Industry - The latest pig price has dropped to 14.51 CNY/kg, with an average slaughter weight increasing to 126.52 kg. The price for 15 kg piglets has decreased to 560 CNY/head, and the price difference for 175 kg standard pigs is 1.1 CNY/kg [4][21] - The overall supply of pigs is expected to be high throughout the year, indicating a weak price trend [4][21] - The Ministry of Agriculture reported a breeding sow inventory of 40.62 million heads, exceeding the 105% capacity control threshold [4][21] 2. Poultry Industry - The price of broiler chickens has rebounded, with chick prices increasing to 2.5 CNY/bird, up 13.64% week-on-week, while the price of broiler chickens is 6.26 CNY/kg, up 11.79% week-on-week [6][23] - The report identifies two main investment lines: focusing on high-return on equity (ROE) companies like Yisheng and full-chain leaders like Shennong Development [6][23] 3. Feed Industry - The report recommends Haida Group due to its cash flow turning point and overseas high growth potential [7][10] - Fish prices have shown positive performance, with various species experiencing different percentage changes, indicating a recovery in aquaculture profitability [7][24] 4. Pet Industry - Online sales of pet food have decreased by 7% year-on-year, with various brands showing different growth rates [11][27] - The report suggests focusing on well-performing brands like Guibao Pet and Zhongchong Co., which are entering a growth phase [11][27] 5. Market and Price Situation - The Shanghai and Shenzhen 300 Index closed at 3890.05, down 2.22% from the previous week, while the Agricultural Index closed at 2460.33, down 0.89% [30][32] - The report notes that the agricultural sector is experiencing a mixed performance, with the pet food sector showing the best performance at 2.77% [30][32]