1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Economic growth shows mixed trends with production indicators like power plant consumption and blast furnace operation rates having their own characteristics, while demand - side indicators such as new home sales and cement prices face challenges. Inflation presents a situation where CPI is affected by weakening pig prices and PPI is influenced by rising oil prices [3][4]. 3. Summary According to the Directory 3.1 Economic Growth: Cement Prices Near Previous Lows 3.1.1 Production: Power Plant Consumption Oscillates at a High Level - Power plant consumption is in a high - level oscillation. On July 29, the average daily consumption of 6 major power - generating groups was 88.21 tons, a 0.01% decrease from July 22. On July 22, the daily consumption of power plants in eight southern provinces was 218 tons, a 4.0% decrease from July 15. After rainfall, with the approaching of mid - dog days, power coal consumption is expected to maintain a high - level oscillation, and the daily consumption of power plants in eight coastal provinces is predicted to stay between 210 - 240 tons [6][17]. - Blast furnace operation rates remain at a high level. On July 25, the national blast furnace operation rate was 83.5%, unchanged from July 18, and the capacity utilization rate was 90.8%, a 0.1 - percentage - point decrease from July 18. The operation rate of blast furnaces in Tangshan steel mills was 92.0% on July 25, also unchanged from July 18. At current price levels, steel mills' profits are relatively good, so they are reluctant to reduce production even in the off - season [21]. - Tire operation rates are weakly stable. On July 24, the operation rate of all - steel truck tires was 65.0%, a 0.1 - percentage - point decrease from July 17, and the operation rate of semi - steel car tires was 75.9%, also a 0.1 - percentage - point decrease from July 17. The operation rate of weaving machines in the Jiangsu - Zhejiang region declined moderately. On July 24, the operation rate of polyester filament in the Jiangsu - Zhejiang region was 92.1%, an 0.8 - percentage - point decrease from July 17, and the operation rate of downstream weaving machines was 55.6%, a 0.2 - percentage - point decrease from July 17 [6][24]. 3.1.2 Demand: Cement Prices Near Previous Lows - New home sales in 30 cities turned negative month - on - month. From July 1 - 29, the average daily sales area of commercial housing in 30 large and medium - sized cities was 20.1 million square meters, a 31.4% decrease from June, an 18.8% decrease from July last year, a 34.7% decrease from July 2023, and a 52.9% decrease from July 2022. By region, sales areas in first - tier, second - tier, and third - tier cities decreased by 27.9%, 15.9%, and 12.3% year - on - year respectively [29]. - The car market's retail sales are steadily strong. In July, retail sales increased by 9% year - on - year, and wholesale sales increased by 17% year - on - year. Since February 2025, the industry replacement rate has been stable above 60%, becoming the main driving force for the passenger car market [31]. - Steel prices maintain resilience. On July 29, the prices of rebar, wire rod, hot - rolled coil, and cold - rolled coil increased by 2.1%, 0.8%, 0.9%, and 0.9% respectively compared to July 22. Steel products have had inventory accumulation for two consecutive weeks. On July 25, the inventory of five major steel products was 9.271 million tons, a 50,000 - ton increase from July 18 [36]. - Cement prices are near previous lows. On July 29, the national cement price index decreased by 1.6% compared to July 22, with prices in the East China and Yangtze River regions dropping by 2.3% and 2.7% respectively. The national cement market continues to operate weakly with obvious regional differentiation [39]. - Glass prices have corrected. On July 29, the active futures contract price of glass was 1,182 yuan/ton, a 1.7% decrease from July 22. High inventory has dragged down prices [45]. - The container shipping freight index has declined for seven consecutive weeks. On July 25, the CCFI index decreased by 3.2% compared to July 18, and the SCFI index decreased by 3.3%. Except for the European route, the freight rates of the other three major ocean routes continued to fall [49]. 3.2 Inflation: Pig Prices Weaken 3.2.1 CPI: Pig Prices Weaken - Pig prices are weakening. On July 29, the average wholesale price of pork was 20.5 yuan/kg, a 1.2% decrease from July 22. Terminal consumption is suppressed by high temperatures, and the long - term supply is abundant. In July, the average wholesale price of pork was 20.6 yuan/kg, a 1.2% increase month - on - month and a 16.9% decrease year - on - year [56]. - The agricultural product price index oscillates weakly. On July 29, the agricultural product wholesale price index decreased by 0.04% compared to July 22. By variety, the price changes were in the order of eggs (up 5.1%) > fruits (up 1.7%) > mutton (up 0.9%) > vegetables (up 0.7%) > chicken (up 0.4%) > beef (down 0.02%) > pork (down 1.2%) [60]. 3.2.2 PPI: Oil Prices Rise - Oil prices are rising. On July 29, the spot prices of Brent and WTI crude oil were 71.6 and 69.2 dollars/barrel respectively, increasing by 2.2% and 6.0% compared to July 22. Concerns about crude oil supply support oil prices [63]. - Copper and aluminum prices are falling. On July 29, the prices of LME 3 - month copper and aluminum decreased by 0.9% and 1.2% respectively compared to July 22. Most industrial product prices increased in July, and the year - on - year decline of most industrial product prices narrowed [69][72].

Group 1 - The private sector in China is significantly contributing to rural revitalization by fulfilling social responsibilities and enhancing agricultural production [1][2] - Hebei Silicon Valley Fertilizer Co., Ltd. has developed organic silicon functional fertilizers that improve soil properties and enhance nutrient absorption for crops [1] - The "Xiejing'an" village project, a collaboration between the local government and Transfar Group, has transformed the local economy by introducing technology and innovative agricultural practices [2] Group 2 - Transfar Group has partnered with over 10 research institutions to develop and promote high-quality tomato varieties, significantly increasing local agricultural productivity [2] - The Yunzhou Meat Breeding Community in Guangdong has implemented an automated and efficient chicken farming model, projected to produce approximately 1.13 million chickens with a value exceeding 26 million yuan in 2024 [3][4] - The "government-bank-enterprise-village" model has been adopted in the Yunzhou project, providing low-interest loans and professional guidance to farmers, resulting in increased income for local communities [4] Group 3 - Guangdong Hengxing Group provides over 1 billion yuan annually in support funds for farmers and invests 15 million yuan in training for livestock farmers [5] - Qinghai Bensheng Grass Industry Co., Ltd. has developed land improvement techniques that generate over 7 million yuan in annual benefits for local communities [5] - The increasing involvement of private enterprises in rural areas reflects a commitment to mutual growth and sustainable development in the agricultural sector [5]

Group 1 - The "anti-involution" policy has been progressively implemented since July, with a clear framework established by the Central Financial Committee, focusing on regulating low-price disorderly competition and promoting product quality improvement [2][5][6] - The revised Price Law strengthens the determination to govern low-price competition, introducing specific clauses targeting unfair pricing behaviors such as price collusion and price discrimination [5][6] - The scope of the "anti-involution" policy is expanding from emerging manufacturing sectors like photovoltaics and new energy vehicles to traditional cyclical industries such as coal, cement, and steel, as well as consumer sectors like internet platforms, pharmaceuticals, and finance [6][7] Group 2 - The capital market has reacted positively to the "anti-involution" policy, with significant increases in both equity and commodity markets, particularly in cyclical sectors, driven by rising inflation expectations [2][13][16] - From July 1 to July 25, the Shanghai Composite Index rose by 4.3%, with cyclical sectors such as steel, building materials, and non-ferrous metals leading the gains, reflecting a strong market response to the policy [13][16] - The commodity market showed even greater elasticity, with the Nanhua Commodity Index increasing by 6.2%, and specific commodities like polysilicon and coking coal seeing price increases of 58.0% and 46.8%, respectively [16][17] Group 3 - The "anti-involution" policy is expected to improve industry fundamentals and inflation expectations, creating more investment opportunities, particularly in traditional cyclical industries and emerging manufacturing sectors [19][20] - The report suggests focusing on two main lines for investment: traditional cyclical industries (coal, non-ferrous metals, building materials, steel) and emerging manufacturing sectors (photovoltaics, new energy vehicles, pharmaceuticals) [20][21] - The ongoing policy implementation and market reactions indicate a potential for sustained investment opportunities as the market consensus continues to solidify [19][20]

Financial Performance - The company achieved a revenue of 58.83 billion yuan in the first half of 2025, representing a year-on-year growth of 12.50% [2] - The net profit attributable to shareholders was 2.639 billion yuan, with a significant increase compared to the previous year [2] - Feed sales reached approximately 1.47 million tons, marking a historical high for the same period, with a year-on-year growth of about 25% [2] - Overseas feed sales increased by approximately 40% in the first half of the year [2] Business Operations - The company is implementing a risk-hedging operational model in pig farming, focusing on "purchasing piglets, company + family farms, locking in profits" [2] - In aquaculture, the main species farmed are shrimp and other specialty aquatic products, with a controlled scale for fish farming [2] - The poultry farming and slaughtering business, which was exploratory, recorded losses due to low poultry meat prices in the first half of the year [2] Strategic Goals - The company aims to achieve a total sales volume of 51.5 million tons by 2030, with a focus on increasing domestic capacity utilization and market share [3] - The successful overseas sales growth is attributed to strong product capabilities driven by R&D innovation and a comprehensive service system [3] Industry Outlook - The current market for freshwater fish is favorable, with good profitability; shrimp and crab farming yields stable production [4] - The company plans to continue investing in the core businesses of animal health and seedling production, which are essential for intensive animal farming [4] Investor Engagement - The investor relations activity included a performance briefing attended by various asset management firms, with a total of 157 participants [5][6][7]

Core Viewpoint - Regulatory authorities have introduced multiple policies to encourage listed companies to repurchase and cancel shares, leading to a significant increase in the importance of stock buybacks among these companies [1] Group 1: Market Performance - On July 29, the A-share market saw a rise in both volume and price, with the Shanghai Composite Index increasing by 0.33%, the Shenzhen Component Index by 0.64%, and the ChiNext Index by 1.86% [2] - Sectors such as optical modules and pharmaceuticals led the gains, with the CRO concept index surging by 6.37% and the optical module concept index rising by 5.36% [2] Group 2: Stock Buyback Activity - In July, A-share listed companies executed buybacks totaling 140.12 billion yuan, a 12.06% increase from June, marking the fourth consecutive month with buybacks exceeding 100 billion yuan [3] - The total buyback amount for the year reached approximately 889.93 billion yuan [3] Group 3: Individual Company Buybacks - 27 companies repurchased over 1 billion yuan in July, with Midea Group, TCL Technology, Guotai Junan, and Baosteel each exceeding 5 billion yuan in buybacks [4] - Midea Group announced two buyback plans with a maximum total of 130 billion yuan, having repurchased 15.1 billion yuan and 9.73 billion yuan under these plans [4] Group 4: Financing Support for Buybacks - The People's Bank of China and other regulatory bodies introduced a policy to establish special loans for stock buybacks, significantly reducing financing costs for companies [5] - As of this year, the maximum amount of special loans for buybacks reached 919.17 billion yuan, with 595.05 billion yuan allocated specifically for stock repurchases [5] Group 5: Valuation and Performance - Among the 553 companies that announced buyback plans this year, 30 companies have a maximum buyback amount of 10 billion yuan or more, with Midea Group, CATL, and Kweichow Moutai leading [6] - 32 companies have a current price-to-earnings ratio below the 30% percentile for the year, indicating potential undervaluation [7]

Group 1 - The "insurance + futures" project in Hezhang County, Guizhou, successfully provided 400,000 yuan in compensation to pig farmers, establishing a robust defense against market fluctuations [1] - The project was tailored to address significant price volatility in the pig market, with a three-month price risk protection plan initiated by Huishang Futures [1] - The project received a 35% premium subsidy from the Dalian Commodity Exchange, lowering the participation threshold for farmers and allowing more small-scale producers to join the risk protection network [1] Group 2 - Hezhang County, previously one of Guizhou's deeply impoverished areas, has seen its pig industry become a key pillar of the local economy since its poverty alleviation in 2020 [2] - The "insurance + futures" model not only provides a market-based risk protection mechanism but also serves as a financial innovation to enhance services for local industries [2] - Huishang Futures aims to extend the successful experience of Hezhang County to more mountainous regions, promoting the "insurance + futures" model across the entire agricultural value chain [2]

金融界7月28日消息，上证指数高开震荡，中证中国内地企业全球主要消费综合指数(CN消费综合， H30379)报8671.19点。 从指数持仓来看，中证中国内地企业全球主要消费综合指数十大权重分别为：贵州茅台（26.08%）、 五粮液（6.78%）、伊利股份（4.97%）、牧原股份（3.67%）、温氏股份（2.71%）、泸州老窖 （2.63%）、山西汾酒（2.59%）、农夫山泉（2.29%）、海天味业（1.85%）、东鹏饮料（1.69%）。 从中证中国内地企业全球主要消费综合指数持仓的市场板块来看，上海证券交易所占比53.35%、深圳 证券交易所占比35.01%、香港证券交易所占比11.16%、北京证券交易所占比0.31%、纽约证券交易所占 比0.14%、纳斯达克证券交易所(Consolidated Capital Market)占比0.01%、纳斯达克全球精选市场证券交 易所(Consolidated Issue)占比0.00%、纳斯达克股票市场证券交易所(Consolidated Large Cap)占比0.00%。 从中证中国内地企业全球主要消费综合指数持仓样本的行业来看，酒占比48.53%、食品占比20 ...

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The agricultural sector's public fund heavy holdings increased in Q2 2025, driven by US-China tariff disruptions, fundamental improvements, and policy catalysts [4][12] - The total market capitalization of the agricultural sector reached 1,320.8 billion, with a quarter-on-quarter increase of 6.80%, accounting for 1.74% of the A-share market [12][16] - The investment logic for the pig farming sector is improving, with expectations of a price increase in the second half of 2025 [20] Summary by Sections Public Fund Holdings - In Q2 2025, the public fund heavy holdings in the agricultural sector accounted for 0.47% of the total public stock investment, with a quarter-on-quarter increase of 0.07 percentage points [12][14] - The feed and breeding sub-sectors saw the most significant increase in public fund holdings, while other sub-sectors remained relatively stable [15] Individual Stocks - Leading companies in the feed and breeding sectors, such as Haida Group and Muyuan Foods, saw significant increases in their public fund holdings, with Haida Group's holdings rising by 51% to 12.44 billion [17][19] - The top public fund holdings in the agricultural sector for Q2 2025 were Haida Group, Muyuan Foods, and Wens Foodstuffs, with respective holdings of 12.44 billion, 6.64 billion, and 6.20 billion [19] Investment Recommendations - The report recommends investing in Muyuan Foods, Wens Foodstuffs, and other companies in the pig farming sector due to improving investment logic [20] - The feed sector is expected to benefit from strong overseas demand, with recommendations for Haida Group and New Hope [20] - The pet sector is highlighted for its growth potential, with recommendations for Guibao Pet and Zhongchong Co. [20]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In Q2 2025, the allocation of active equity - oriented funds showed an obvious "dumbbell - shaped" structure. Funds increased their positions in the financial sector, with the allocation coefficients of city commercial banks and rural commercial banks rising to the highest levels since 2016, and that of joint - stock banks at the central level since 2016. The allocation coefficient of securities remained low. In the technology assets, the allocation coefficient of the computing power chain (communication equipment) reached the highest level since 2016, while the current quantile of the allocation coefficient of the AI software end (IT services, software development) was still low. The quantile of the current allocation coefficient of the pharmaceutical sector rebounded to the central level, with a relatively high quantile for innovative drugs and a low quantile for CXO. In addition, from a global perspective, sectors such as decoration building materials, decoration and decoration, chemical raw materials, chemical products, silicon materials and wafers, and aquaculture still had historically low allocation coefficients, and there were positive changes in both supply and demand recently [1]. - In Q2 2025, active equity - oriented funds increased their positions in the ChiNext and the Science and Technology Innovation Board and reduced their positions in the Main Board. The position in the Science and Technology Innovation Board reached a new high since 2019. From an industry perspective, funds increased their positions in communication, agriculture, forestry, animal husbandry, national defense and military industry, and media. The position in Hong Kong stocks reached a new high since 2019 (14%), and the increase in the over - (under -) allocation ratio of sectors such as pharmaceutical biology, non - bank finance, and light manufacturing ranked among the top [3]. 3. Summary According to Relevant Catalogs 25Q2 Overall Configuration Overview - In Q2 2025, active equity - oriented funds held stocks worth 2.9 trillion yuan, and the position rebounded to 84.5%. Funds increased their positions in the ChiNext and the Science and Technology Innovation Board and reduced their positions in the Main Board. The position in the Science and Technology Innovation Board reached a new high since 2019. From an industry perspective, funds increased their positions in communication, agriculture, forestry, animal husbandry, national defense and military industry, and media. The position in Hong Kong stocks reached a new high since 2019 (14%), and the increase in the over - (under -) allocation ratio of sectors such as pharmaceutical biology, non - bank finance, and light manufacturing ranked among the top [3]. Concern 1: "Supply - demand improvement + low position" Concentrated in Anti - involution and Infrastructure Chains - From the perspective of chip distribution, assets with low quantiles of the Q2 2025 allocation coefficient (since 2016) were mainly concentrated in anti - involution, infrastructure, AI, and domestic demand industrial chains. Specifically, in the anti - involution area, assets such as chemical raw materials (chlor - alkali), chemical products, silicon materials and wafers, aquaculture, and energy metals had low quantiles of the allocation coefficient. In the infrastructure chain, funds reduced their positions in the real estate infrastructure chain in Q2 2025. Considering policy expectations, assets with relatively low quantiles of the allocation coefficient and positive catalysts included decoration building materials and decoration and decoration. In the AI field, funds increased their positions in the computing power chain in Q2 2025, with the chip congestion of communication equipment at a historical high, while the congestion of computer equipment, IT services, and software development was relatively low, and the quantile of the allocation coefficient of communication services since 2016 was still at the historical central position. In the domestic demand assets, under the continuous disturbance of tariffs, policy efforts on domestic demand might still be the baseline scenario. In Q2 2025, the quantiles of the allocation coefficients of food processing, liquor, animal health, and flavor fermentation products were below 10%. Further considering high - frequency prosperity data, the supply - side perspective of financial reports, and policy expectations, sectors such as decoration building materials, decoration and decoration, chemical raw materials, chemical products, silicon materials and wafers, and aquaculture still had historically low allocation coefficients, and there were positive changes in both supply and demand recently [4]. Concern 2: The Fund Allocation in the Second Quarter Showed an Obvious Dumbbell - shaped Structure - In Q2 2025, the increase in positions of active equity - oriented funds showed a "dumbbell - shaped" structure. From the perspective of fund holding styles, compared with Q1 2025, the overall style of public funds in Q2 2025 shifted towards the theme - growth and large - market - value value at the two ends of the dumbbell. From the perspective of different industries, from the two perspectives of over - (under -) allocation ratio and allocation coefficient, active equity - oriented funds in Q2 2025 increased their positions in theme - growth directions such as AI, national defense and military industry, media, and communication catalyzed by geopolitical factors, as well as large - market - value value industries such as finance. The increase in positions in non - bank finance might be catalyzed by the "stable coin", and the increase in positions in banks might be related to bank valuation repair and the public fund reform plan [5]. Concern 3: Growth - Oriented Funds Chose Directions such as Communication and Military Industry, while Value - Oriented Funds Increased Their Positions in Banks - Considering funds with relatively obvious position changes: Funds that increased their positions in communication, national defense and military industry and other theme - growth industries in Q2 2025 reduced their positions in power equipment and automobiles, which might be internal position - switching within growth - oriented funds to choose new growth directions. In Q2 2025, value - oriented funds adjusted internally, increasing their positions in banks and reducing their positions in food and beverages. Growth - oriented funds switched from power equipment and electronics to pharmaceuticals (fund sizes were generally > 5 billion), and value - oriented funds reduced their positions in food and beverages and increased their positions in pharmaceuticals (fund sizes were generally < 5 billion). Funds that increased their positions significantly but still had a position < 80% in Q2 2025 increased their positions in household appliances, food and beverages, and pharmaceutical biology [5]. 25Q2 Public Fund Position Analysis: Style Shifted towards the Two Ends of the "Dumbbell" - **Position Style and Factor Split**: In terms of style drift, the position style of public funds in the second quarter shifted towards the "dumbbell" directions of small - market - value growth and large - market - value value. Compared with Q1 2025, the overall style of public funds in Q2 2025 shifted towards the small - market - value growth and large - market - value value at the two ends of the dumbbell (manifested as an increase in the proportion of the scatter plot in the first and third quadrants). The attention to stocks with low valuations and stable cash flows increased. Compared with Q1 2025, the attention of funds to stocks with low valuations and stable cash flows increased [15][20]. - **Heavy - Position Stock Concentration**: The concentration of fund heavy - position stocks decreased slightly quarter - on - quarter, which might be affected by the decline in the stock prices of heavy - position stocks. In Q2 2025, the proportion of the market value of the top 50 heavy - position stocks in the total market value of active equity - oriented fund heavy - position stocks decreased slightly to 51.5% (VS 52.4% in Q1 2025), and the concentration of the top 100 heavy - position stocks decreased to 62.7% (VS 63.3% in Q1 2025). After excluding the impact of stock price increases and decreases, the concentration of the top 100 fund positions in Q2 2025 was basically the same as that in Q1 2025 [23]. - **Increasing - Position Perspective Measurement**: From the two perspectives of allocation coefficient (position/standard allocation) and over - (under -) allocation ratio (position - standard allocation), the increase in positions of communication, national defense and military industry, and media ranked among the top, while the decline in positions of food and beverages, household appliances, and automobiles ranked among the top. The difference was that the ranking of the increase in the allocation coefficient of agriculture, forestry, animal husbandry, and beauty care was higher than that of the over - (under -) allocation ratio, indicating that the subsequent space for funds to increase their positions might be limited. The ranking of the allocation coefficient of banks and non - bank finance was lower than that of the over - (under -) allocation ratio, indicating that funds showed signs of bottom - fishing [25]. - **Industrial Chain Perspective**: From the industrial chain perspective, in Q2 2025, pharmaceuticals and TMT were the main directions for funds to increase their positions, and the main reduction was in the real estate infrastructure chain, export chain, domestic demand consumption, and advanced manufacturing. From the perspective of the quantile of the allocation coefficient, the quantiles of the allocation coefficients of the export chain and advanced manufacturing were at relatively high positions above 70%, while those of the other industrial chains were at low positions below 40% [36]. - **Index**: Among broad - based indexes, active equity - oriented funds had the highest increase in the over - (under -) allocation ratio for the CSI 500, Hang Seng Index, Hang Seng Technology Index, CSI 1000, and MSCI A50 constituent stocks, while the over - (under -) allocation ratio of the STAR 50, CSI 300, and SSE 50 constituent stocks decreased quarter - on - quarter. From the perspective of quantiles, in Q1 2025, the quantiles of the allocation coefficients of the Hang Seng Index, Hang Seng Technology Index, CSI 1000, and CSI 500 since 2016 were at relatively high positions of 100%, 100%, 86%, and 89% respectively [67]. Fund Allocation Logic - **Main Position Change Directions**: Funds that increased their positions in communication and national defense and military industry in Q2 2025 mainly reduced their positions in power equipment and automobiles (robots), which might be internal position - switching of growth - oriented funds to choose new growth directions. Funds that increased their positions in banks reduced their positions in food and beverages, which might be internal position adjustment of value - oriented funds. Funds that increased their positions in pharmaceuticals were more diversified. Some growth - oriented funds switched from power equipment, electronics, and automobiles to pharmaceuticals (fund sizes were generally > 5 billion), and some value - oriented funds reduced their positions in food and beverages and household appliances and increased their positions in pharmaceuticals (fund sizes were generally < 5 billion) [70]. - **Allocation Directions of Funds with Increased Positions**: Funds that increased their positions significantly in Q2 2025 mainly increased their positions in household appliances, food and beverages, and pharmaceutical biology. Considering that the equity positions of public funds were still at a high level, funds that still had room to increase their positions (meeting the conditions of equity position > 30% in Q1 2025, position increase > 10 pct in Q2 2025, and equity position < 85% in Q2 2025) mainly increased their positions in household appliances, food and beverages, and pharmaceutical biology [84]. 25Q2 Fund Allocation Overview: The Allocation Intensity of Hong Kong Stocks Continued to Increase - **Overview**: In Q2 2025, the positions of active equity - oriented funds in A - shares and Hong Kong stocks continued to increase quarter - on - quarter. The overall position was above the median since 2020. The performance of the common stock - type fund index and the partial - stock hybrid fund index in Q2 2025 was slightly weaker than that of the main indexes such as the Shanghai Composite Index but stronger than other main market indexes, reflecting that the overall performance of fund heavy - position stocks was stronger than the market in Q2 2025. Active equity - oriented funds increased their positions in the ChiNext and the Science and Technology Innovation Board and reduced their positions in the Main Board. The current allocation ratio of the ChiNext had dropped to around one standard deviation below the median since 2010, while the allocation ratio of the Science and Technology Innovation Board continued to reach a new high, and the overall science and technology attributes of public fund heavy - position stocks continued to strengthen. In addition, in terms of Hong Kong stocks, the allocation intensity of public funds to Hong Kong stocks increased in Q2 2025, rising by 1.0 pct quarter - on - quarter, and had reached the highest level since 2019 [89]. - **By Industry**: In terms of A - shares, communication, agriculture, forestry, animal husbandry, national defense and military industry, and media had the highest increase in the allocation coefficient, mainly increasing their positions in leading stocks in sub - directions such as communication equipment, feed, and ground military equipment. Sectors such as household appliances, automobiles, and food and beverages had the highest decline in the allocation coefficient, mainly reducing their positions in leading stocks in sub - directions such as white goods, passenger cars, and liquor. In Hong Kong stocks, sectors such as pharmaceuticals, light manufacturing, and non - bank finance had the highest increase in the allocation coefficient, while sectors such as commercial retail, non - ferrous metals, and banks had the highest decline in the allocation coefficient [104].

Core Views - The breeding sector is experiencing improved supply-demand dynamics due to intensified policy regulation, with measures from the National Development and Reform Commission (NDRC) aimed at optimizing pig production capacity, which is expected to enhance CPI targets and stabilize pig prices [4][50] - The beef industry is undergoing significant supply reduction, with a deep cycle anticipated as the number of breeding cows declines sharply, leading to lower beef supply starting in the second half of 2025 [6][88] - Smart agriculture is benefiting from ongoing policy incentives and increased funding, with water conservancy investments projected to reach 1.4 trillion yuan in 2024, marking a 12.8% year-on-year increase [6][50] Breeding Sector - The breeding industry is seeing a favorable supply-demand balance, with policies aimed at controlling production capacity and improving profitability for leading companies such as Muyuan Foods and Wens Foodstuffs [4][50] - The profitability of self-breeding operations is stable, while external pig purchases show fluctuating profits, indicating a need for careful management of breeding strategies [20][25] - The average weight of pigs being slaughtered has decreased, which is expected to reduce supply pressure and potentially increase pig prices in the coming months [41][42] Beef Industry - The domestic beef supply is expected to decrease significantly due to a reduction in breeding cow numbers, with the industry mirroring the pre-2019 pig cycle in terms of supply adjustments [6][88] - The beef market is characterized by a long adjustment period from breeding to market, typically requiring 2-3 years, which complicates supply management [70] Smart Agriculture - The smart agriculture sector is poised for growth driven by government policies and funding, with a focus on modernizing irrigation systems and enhancing water management practices [6][50] - The market for smart agriculture is projected to expand significantly, with the government aiming to establish 13 million acres of efficient water-saving irrigation [6] Animal Health - The veterinary drug sector is experiencing a structural shift due to the implementation of new GMP standards, which are raising industry entry barriers and promoting consolidation among leading firms [51][66] - The veterinary raw material drug prices are entering a recovery phase after a prolonged downturn, with demand expected to rise as breeding profitability improves [53][66] Investment Recommendations - Key investment targets include Muyuan Foods, Wens Foodstuffs, and Jiusan Foods in the breeding sector, as well as Deyu Water Saving and Ruipu Biological in the smart agriculture and animal health sectors, respectively [4][66][67]