Group 1 - The livestock industry is experiencing a downward trend in profitability, particularly in the pig sector, while the poultry sector shows signs of recovery due to seasonal demand and reduced imports [1][2] - In Q3 2025, the average price of live pigs in China is approximately 14.0 CNY/kg, reflecting a 4% decrease quarter-on-quarter and a 28% decrease year-on-year, with self-breeding profits at about 42 CNY per head and losses of 118 CNY per head for purchased piglets [1][2] - The policy direction continues to focus on reducing breeding sows and controlling weight, with the number of breeding sows at 40.38 million as of the end of August 2025, a slight decrease of 0.1% [2][3] Group 2 - The pig farming sector faces short-term pressure on profitability due to high supply and declining prices, with expectations of a 10%-16% year-on-year increase in supply for Q3 and Q4 [3][4] - The white-feathered chicken market is stabilizing, with prices recovering due to seasonal demand, while yellow-feathered chicken prices rebounded significantly in August after a decline earlier in the year [4][5] - The livestock sector is expected to see a bottoming out and recovery, with supply-side adjustments and weight reductions likely to support price recovery in the pig sector, while the poultry sector continues its upward trend [5][6] Group 3 - The livestock industry is transitioning from a cyclical bottom to a recovery phase, with the livestock ETF (159865) receiving significant capital inflows, totaling 1.595 billion CNY in the past month [5][6] - As of October 15, 2025, the price-to-earnings ratio (PE) of the livestock index is 14.35, indicating a low valuation compared to historical levels, with the pig industry accounting for about 60% of the index [5][6] - The industry is expected to see improvements in supply-demand dynamics and profitability recovery from Q4 2025 to the first half of 2026, presenting investment opportunities related to capacity reduction [5][6]