Summary of Conference Call Records Industry Overview - **Industry Focus**: Livestock and Agriculture Sector, specifically beef, dairy, pork, poultry, and pet food industries Key Points Beef Sector - **Super Cycle in Beef**: The trend of a super cycle in the beef sector is clear, with a focus on the end of the dairy cow reduction phase. [1] - **Current Prices**: As of January 23, 2025, the prices are as follows: - Fat cattle price: 25.66 CNY/kg, unchanged month-on-month, up 9.47% year-on-year - Calf price: 33.09 CNY/kg, up 0.19% month-on-month, up 37.08% year-on-year - Culling cattle price: 19.93 CNY/kg, up 0.26% month-on-month, up 22.80% year-on-year [2] - **Dairy Prices**: Dairy prices are still in a low adjustment phase, with fresh milk priced at 3.03 CNY/kg as of January 15, 2025, up 0.33% month-on-month, down 2.57% year-on-year [2] - **Supply Dynamics**: Domestic beef supply is tightening due to a combination of import quota systems, tariff policies, and global beef supply constraints [3] - **Future Expectations**: The reduction in dairy cows is expected to continue, with a projected cumulative reduction of 8.8% by December 2025. The dairy price elasticity is anticipated to improve as supply-demand imbalances and price pressures become more pronounced [4] - **Investment Recommendations**: Companies with mother cow resources and those adopting a "milk-meat linkage" model are expected to have stronger profitability. Recommended stocks include: YouRan MuYe, China Shengmu, ZiYan Food, Guangming Meat Industry, Modern Farming, AoYa Group, Tianrun Dairy, FuCheng Co. [4] Pork Sector - **Current Prices**: As of January 24, 2026, the national average price for live pigs is 12.99 CNY/kg, up 1.48% from the previous week. The price for weaned piglets is 352 CNY/head [5] - **Supply and Demand**: The supply side shows a slow progress in the market with a completion rate of only 64.94% for monthly slaughtering as of January 20, 2026. The daily slaughter volume has decreased by 1.22% [6] - **Market Outlook**: Given the strong supply and weak demand, pork prices are expected to remain under pressure. The industry is likely to continue reducing production capacity due to losses and disease interference [6] Poultry Sector - **Impact of Avian Influenza**: The outbreak of avian influenza in France has led to a suspension of breeding imports, creating uncertainty in the supply of breeding chickens [8] - **Current Prices**: As of January 24, 2025, the price for commodity chicks is 2.5 CNY/bird, down 15.3% month-on-month, while the average price for broilers is 3.75 CNY/kg, up 2.7% [10] - **Investment Recommendations**: Focus on companies that can leverage their market share and control over the supply chain, such as Shengnong Development, Yisheng, Minhe, and Hefeng [11] Pet Food Sector - **Growth of Domestic Brands**: Domestic pet food brands are rapidly growing, with notable sales on platforms like Tmall. [7] - **Export Trends**: Pet food exports have increased, with a total of 32.36 million tons exported from January to November 2025, up 6.96% year-on-year [7] - **Investment Recommendations**: Recommended stocks include pet food companies like Guibao Pet, Zhongchong Co., and Petty Co. [7] Seed Industry - **Focus on Breeding**: The seed industry is critical for food security, with a push towards high-yield production through improved breeding techniques [17] - **Investment Opportunities**: Companies with strong transgenic reserves are expected to enhance their competitiveness. Recommended stocks include Longping High-Tech, Dabeinong, and Qianyuan High-Tech [18] Feed and Animal Health - **Feed Sector**: The feed sector is recommended for investment, particularly companies like Haida Group, which are expected to see market share growth and sustained performance [21] - **Animal Health**: The market for pet health products is expanding, with a focus on innovative products to break through competitive barriers [22] Additional Insights - **Risks**: Potential risks include livestock disease outbreaks, fluctuations in agricultural product prices, regulatory changes, and exchange rate volatility [22]

Core Viewpoint - The agricultural, animal husbandry, and fishery sector is experiencing an upward trend, with the only agricultural ETF (159275) showing a price increase of 0.41% as of the report time [1]. Group 1: Market Performance - The agricultural ETF (159275) opened positively and has been fluctuating in the red, with a current increase of 0.41% [1]. - Key stocks in the sector, such as edible mushrooms, broiler chicken farming, and animal feed, have shown significant gains, with Zhongxing Junye rising over 8%, Xiaoming Co. up over 5%, and Shengnong Development increasing over 3% [1]. Group 2: Industry Insights - In September, the total output of listed pig farming companies in China reached 15.2934 million heads, marking a year-on-year increase of 27.11% but a month-on-month decrease of 5.92% [1]. - Western Securities attributes the year-on-year increase in output to the continuous release of new production capacity from last year, while the month-on-month decline is linked to some companies responding to policy guidance by preemptively culling heavier pigs [1]. Group 3: Valuation and Investment Opportunities - The current valuation level of the agricultural, animal husbandry, and fishery sector remains relatively low, indicating a favorable time for investment [3]. - As of October 24, the market's first agricultural ETF (159275) had a price-to-book ratio of 2.53, which is at the 25.1% percentile of the past decade, highlighting its mid-to-long-term investment value [3]. Group 4: Strategic Recommendations - Zhonghang Securities emphasizes the medium to long-term investment value in the pig farming sector, suggesting that the reduction in production capacity could positively impact the sector [4]. - The report highlights the importance of monitoring changes in the breeding sow inventory and suggests focusing on high-quality pig farming companies with good cash flow and marginal cost changes [4].