Investment Rating - The investment rating for the agriculture sector is "Positive" (maintained) [1] Core Insights - The agriculture sector's profit growth in H1 2025 is driven by the recovery of the breeding chain, with a significant increase in both revenue and net profit compared to the previous year [3][15] - The overall revenue for the agriculture sector reached 569.91 billion yuan, representing a year-on-year growth of 9.28%, while the net profit attributable to shareholders increased by 193.46% to 25.794 billion yuan [15][12] - The recovery in breeding profitability is attributed to a rapid decline in pig farming costs and an increase in the output of leading listed pig companies [15][4] Summary by Sections Overall Industry Performance - The agriculture sector's revenue and profit both showed year-on-year growth in H1 2025, with a revenue of 569.91 billion yuan and a net profit of 25.794 billion yuan [15][12] - The sector's gross profit margin improved to 12.49%, up by 5.52 percentage points year-on-year, and the net profit margin reached 4.00%, an increase of 5.24 percentage points [15][16] Subsector Analysis - The breeding chain's profitability has recovered, with all subsectors except for fisheries showing revenue growth. Key growth rates include animal health (+24.85%), pet food (+24.25%), livestock farming (+14.92%), and feed (+11.60%) [4][22] - The pig farming sector achieved a revenue of 226.618 billion yuan, a year-on-year increase of 16.96%, with net profit soaring by 1234.37% to 16.601 billion yuan [5][24] - Poultry farming saw revenues of 24.942 billion yuan, up 5.15%, and net profits increased by 70.70% to 1.178 billion yuan despite low chicken prices [41][42] - The feed sector reported revenues of 95.147 billion yuan, a growth of 11.25%, with net profits rising by 61.26% to 3.144 billion yuan [6][52] - The animal health sector's revenue reached 6.398 billion yuan, growing by 20.54%, with net profits increasing by 34.08% to 740 million yuan [61][66] - The seed sector faced challenges, with revenues declining by 10.60% to 5.122 billion yuan and net profits dropping significantly [72][73] Profitability Metrics - The overall gross margin for the agriculture sector improved, with the breeding sector's gross margin at 13.33%, net margin at 5.63%, and ROE at 5.56% [29][30] - The poultry sector's gross margin was 12.61%, with net margin at 2.99% and ROE at 3.36%, reflecting improvements in profitability metrics [42][47] - The feed sector's average gross margin was 10.09%, with net margin at 1.98% and ROE at 3.59%, indicating a positive trend in profitability [52][58] - The animal health sector's average gross margin was 53.49%, with net margin at 15.88% and ROE at 2.60%, showing strong profitability [66][67]