Core Insights - The pork stocks have shown strength, with notable increases in shares of companies like Luoniushan and Muyuan Foods, indicating a positive market sentiment in the pork industry [1] - The Livestock Breeding ETF (516670) has experienced significant net inflows, suggesting growing investor interest in the sector [1][4] Industry Summary - As of November 9, the average price of live pigs in China is 11.90 CNY/kg, reflecting a week-on-week decrease of 0.30 CNY/kg and a year-on-year decline of 4.80% [2][3] - Current breeding profits for self-bred pigs are at a loss of 89.21 CNY per head, while purchased piglets incur a loss of 175.54 CNY per head, indicating a challenging profitability landscape for pig farmers [3] - The industry is facing a potential capacity reduction due to weak prices and policy-driven initiatives, with the price of fat pigs dropping below 12 CNY/kg [3] - Short-term projections suggest an increase in piglet numbers from May to September 2025, which may lead to higher market supply and continued pressure on prices [3] - The Livestock Breeding ETF has the lowest management fee rate of 0.2% per year among ETFs tracking the livestock breeding index, making it an attractive option for investors [4]

Core Viewpoint - The livestock farming ETF (516670) has seen significant inflows, with nearly 22 million yuan on a single day and a total of 210 million yuan over the past 11 days, reaching a new high of 1.063 billion yuan since its listing [1] Group 1: Industry Performance - In September, the overall sales revenue of listed pig farming companies declined, with a total revenue of 21.647 billion yuan, representing a year-on-year decrease of 18.74% and a month-on-month decrease of 10.77% [3] - The decline in sales revenue is attributed to significantly lower pig prices compared to the same period last year, as well as a continuous drop in prices in September [3][4] - The total number of pigs sold by listed companies in September was 15.2934 million heads, marking a year-on-year increase of 27.11% but a month-on-month decrease of 5.92% [4] Group 2: Supply and Demand Dynamics - The price decline is influenced by both ample supply and weak demand, with a notable increase in the number of pigs being marketed due to the release of new production capacity from last year [4] - The number of breeding sows in September was 40.35 million heads, showing a year-on-year decrease of 280,000 heads (0.7%) and a slight month-on-month decrease of 90,000 heads (0.2%) [4] Group 3: Policy and Future Outlook - Since May, the industry has been focusing on "de-involution," with multiple meetings held by the Ministry of Agriculture, the National Development and Reform Commission, and industry associations to control production capacity and reduce weight [5] - With the increasing enforcement of policies and recent pig prices entering a loss zone, it is expected that the industry's capacity reduction will accelerate in the fourth quarter, with a potential upward trend in pig prices anticipated in the second half of next year [5] - The livestock farming ETF (516670) has a management fee rate of 0.2% per year, making it the lowest among ETFs tracking the livestock farming index [5]

Core Viewpoint - The livestock sector is experiencing a rally, driven by preliminary anti-dumping measures on EU pork imports, which may lead to an increase in domestic pork prices as supply tightens [3][5]. Group 1: Market Performance - On September 8, the livestock sector saw significant gains, with companies like Lihua Co. rising over 7%, and others such as Xiaoming Co., Jinxinnong, and Shennong Group increasing by more than 5% [1]. - The Livestock Breeding ETF (516670) rose by 3.10% [1]. Group 2: Regulatory Developments - The Ministry of Commerce's preliminary investigation into anti-dumping of EU pork and by-products confirmed dumping behavior and its harm to the domestic industry, leading to a decision to implement temporary anti-dumping measures by September 5, 2025 [3]. - Over 50% of China's imported pork and by-products come from the EU, and the imposition of anti-dumping duties is expected to raise domestic pork prices [3]. Group 3: Industry Trends - As of September 5, the average wholesale price of pork was 19.84 yuan/kg, indicating a low point in recent years, suggesting that current prices may be at a temporary bottom [3]. - The breeding stock of sows saw a slight decrease of 0.80% in August, indicating a tightening supply [5]. - The livestock sector's overall valuation remains low, with the CSI Livestock Breeding Index at 2.72 times PB, which is at the 16% historical percentile, indicating potential for upward valuation adjustments [5]. Group 4: Future Outlook - As temperatures cool, demand is expected to improve marginally, leading to tighter supply of market pigs and potentially increasing pork prices [7]. - The industry is transitioning from quantity expansion to quality improvement, with expectations of increased concentration and better supply-demand dynamics as policies take effect [7]. - The Livestock Breeding ETF closely tracks the CSI Livestock Breeding Index, with approximately 60% of its weight in pig farming-related stocks, indicating a strong focus on the sector [7].