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.