Investment Rating - Industry rating: Outperform the market (maintained rating) [9] Core Insights - The pet industry is experiencing significant growth, with the Asia Pet Expo showcasing over 2,600 exhibitors and 20,000 brands, indicating a thriving market driven by globalization and innovation [2][13] - China's pet food exports have shown continuous growth, with 201,000 tons exported from January to July 2025, reflecting a year-on-year increase of 6.64% [14] - The pig farming sector is facing challenges, with the average pig price at 13.82 yuan/kg, a decrease of 3.63% from the previous week, and the average weight of pigs reaching a historical high [15][16] - The dairy sector is poised for a recovery, with the original milk price expected to rebound as production capacity decreases after a prolonged period of losses [17][18] - The poultry sector is focusing on breeding gaps, with a significant decline in the import of breeding chickens due to avian influenza concerns, which may impact future supply [19][20] - The planting sector emphasizes food security and the importance of biotechnology, with a focus on high-yield and resilient crop varieties [25] - The feed sector is recommended for investment, particularly in companies like Haida Group, which is expected to benefit from market recovery and increased market share [26] Summary by Sections Pet Sector - The Asia Pet Expo has reached a record scale of 310,000 square meters, highlighting the industry's vitality and innovation potential [2][13] - Pet food exports from China have increased, with a total of 201,000 tons exported in the first seven months of 2025, showing a year-on-year growth of 6.64% [14] - Recommended companies include pet food brands like Guibao Pet, Zhongchong Co., and Petty Co. [14] Pig Sector - The average pig price is currently at 13.82 yuan/kg, with a year-to-date low in profitability for pig farming [15][16] - The average weight of pigs is at a historical high, indicating supply pressures [15] - Recommended companies include leading pig farming firms such as Wens Foodstuffs Group and Muyuan Foods [16] Dairy Sector - Yuran Dairy reported stable performance with a revenue of 10.3 billion yuan, showing a year-on-year growth of 2.3% [17] - The dairy industry is expected to see a recovery as production capacity decreases [18] - Recommended companies include Yuran Dairy and China Shengmu Organic Milk [18] Poultry Sector - The poultry sector is facing challenges with breeding imports, particularly for white chickens, due to avian influenza [19][20] - Recommended companies include Shennong Development and Yisheng Livestock [20] Planting Sector - The focus is on food security and biotechnology, with an emphasis on high-yield and resilient crop varieties [25] - Recommended companies include Longping High-Tech and Dabeinong Technology Group [25] Feed Sector - Haida Group is highlighted as a key investment opportunity due to its increasing market share and performance [26] - The animal health sector is also recommended, particularly companies like Kexin Biological [27]

Investment Rating - Industry rating: Outperform the market (maintained rating) [7] Core Views - The pig sector is experiencing a halt in the growth of breeding sows, indicating a significant expectation gap in the market. The average price of pigs is stable at 14.34 CNY/kg, while the price of piglets has reached a new low this year. The supply pressure continues to increase, and the seasonal demand is weak, suggesting a potential seasonal decline in pig prices [1][2][11] - The dairy sector is nearing the end of its capacity reduction phase, with expectations for a rebound in raw milk prices. The beef cycle may have started, with companies that can withstand the current downturn showing strong profit potential [3][13][14] - The pet industry is witnessing a rise in domestic brands and a positive trend in pet food exports, indicating robust growth in the pet economy. Key recommendations include companies like Guibao Pet and Zhongchong Co [15][16] - The poultry sector is focusing on the breeding gap for white and egg-laying chickens, with expectations for price improvements driven by demand. The yellow chicken market is also showing signs of recovery due to supply constraints and improving demand [4][17][19] Summary by Sections Pig Sector - The average price of pigs is stable at 14.34 CNY/kg, with self-breeding profits around 130 CNY per head. The price of piglets has hit a new low, and the average weight of pigs at market is high, indicating supply pressure [1][11] - The breeding sow numbers have decreased, with some institutions reporting a halt in growth. The market is expected to see capacity reduction due to policy guidance and weak demand [2][12] Dairy and Beef Sector - The raw milk price is expected to rebound as the dairy industry approaches the end of its capacity reduction phase. The beef cycle may have started, with companies that can adapt showing strong profit potential [3][14] Pet Sector - The pet economy is thriving, with domestic brands growing rapidly. Pet food exports are also on the rise, with significant sales growth reported [15][16] Poultry Sector - The white chicken and egg-laying chicken markets are focusing on breeding gaps, with expectations for price increases driven by demand. The yellow chicken market is showing signs of recovery due to supply constraints [4][17][19] Planting Sector - The focus is on achieving food security through self-sufficiency and enhancing breeding strategies. The government is promoting agricultural technology innovation to support this goal [5][21][22] Feed and Animal Health Sector - The feed sector is recommended for companies with increasing market share and consistent performance, such as Haida Group. The animal health sector is focusing on breaking through homogenized competition with innovative products [6][23][24]

Investment Rating - The industry rating is "Outperform the Market" (maintained rating) [8] Core Insights - The report highlights the low prices of piglets and the high average weight of market pigs, indicating a significant expectation gap in the pig sector [1][2] - The dairy and beef sectors are experiencing a potential new cycle, with a focus on the recovery of milk prices and the initiation of a beef super cycle [3][4] - The pet food sector is witnessing the rise of domestic brands and a positive trend in exports, reflecting the growth of the pet economy [5][6] - The poultry sector is facing challenges with breeding imports and demand recovery, particularly in the white and egg-laying chicken segments [7][8] - The planting sector emphasizes food security and the importance of biological breeding strategies [9][10] - The feed sector is recommended for investment due to market share growth and consistent performance of leading companies like Haida Group [11][12] Summary by Sections Pig Sector - As of August 2, the average price of pigs is 14.35 CNY/kg, down 3.1% from the previous week, with a profit of approximately 141 CNY per head for self-breeding [1][12] - The price of piglets has reached a new low for the year, with 7kg piglets priced at 429 CNY/head [1][12] - The report suggests focusing on undervalued companies with strong profitability in the pig sector, such as Muyuan Foods and Wens Foodstuffs [2][13] Beef Sector - The average price of live cattle is 26.49 CNY/kg, with a year-on-year increase of 11.6% [3][14] - The report indicates that the dairy industry is nearing the end of a capacity reduction phase, with significant losses expected to drive a rebound in milk prices [4][15] Pet Sector - Domestic brands in the pet food market are growing rapidly, with notable sales figures reported for cat and dog food [5][16] - Exports of pet food have increased, with a total of 16.79 million tons exported in the first half of 2025, reflecting a year-on-year growth of 5.7% [5][16] Poultry Sector - The report emphasizes the importance of breeding imports and the potential for price increases in yellow chickens due to recovering demand [6][7] - The average price of egg-laying chickens is expected to remain high due to import restrictions [7][21] Planting Sector - The focus is on achieving food security through improved agricultural practices and the promotion of biotechnology [9][23] - Key recommendations include investing in leading seed companies and agricultural resource firms [9][23] Feed Sector - Haida Group is highlighted as a key investment opportunity due to its increasing market share and strong performance [11][24] - The report notes a significant recovery in the aquaculture and feed sectors after a prolonged downturn [11][24]

Core Viewpoint - Yisheng Co., Ltd. reported a significant decline in its half-year performance, with revenue dropping to 1.32 billion yuan, a year-on-year decrease of 4.0%, and net profit plunging by 96.6% to 6.16 million yuan, indicating severe challenges in the poultry industry despite a generally favorable market environment [2][3][6]. Financial Performance - The company's revenue for the first half of 2025 was 1.32 billion yuan, down 4.0% from the previous year [2][4]. - Net profit fell to 6.16 million yuan, a decrease of 96.6% year-on-year, while the net profit excluding non-recurring items was 3.37 million yuan, down 98.2% [2][4]. - Operating cash flow was reported at 1.43 billion yuan, a decline of 35.5% compared to the previous year [2][4]. - In Q2, revenue was 698 million yuan, showing a slight increase of 1.4% year-on-year, but net profit still fell by 73.8% [2][3]. Business Segment Performance - Revenue from chicken sales decreased by 16.48% to 1.01 billion yuan, while revenue from pig sales increased by 128.73% to 204 million yuan [3][6]. - The decline in chicken prices significantly impacted the core business, revealing the company's vulnerability to market cycles [3][6]. Investment Projects - Several investment projects did not meet expectations, including the termination of the 3,600-head breeding sow project and delays in the completion of other projects, which contributed to the company's weak performance [6][8]. - The company acknowledged that the low prices of chicken seedlings during the reporting period hindered expected benefits from its investment projects [6][8]. Industry Context - The poultry industry is experiencing a downturn, with many companies facing similar challenges. In contrast, some companies in the deep processing sector are seeing significant growth [11][12]. - The average market price for white feather broilers is estimated to have dropped by 6.96% year-on-year, reflecting an oversupply situation in the market [13][15]. - The overall market conditions have led to increased inventory levels and cautious purchasing behavior among traders, further pressuring prices [15][17]. Financial Health - The company's gross profit margin has fallen to 12.14%, nearly halving year-on-year, while the cost of sales has risen to 87.86%, marking one of the highest levels in three years [17]. - Accounts receivable increased by 27.41%, and cash flow has been declining for a consecutive year, indicating tightening liquidity [17]. - Short-term borrowings reached a historical peak of 2.199 billion yuan, with long-term borrowings at 107 million yuan [17].

Investment Rating - The industry investment rating is "Recommended" with an expectation that the industry index will exceed the benchmark index by more than 5% in the next 3-6 months [3][52]. Core Viewpoints - The report indicates that the prices of broilers and chicks have remained stable, with profits in the breeding sector showing some recovery. However, there are significant losses in the broiler farming and hatching sectors [1][43]. - The report emphasizes the importance of monitoring the recovery of poultry consumption in the context of economic recovery, as well as the impact of external factors such as avian influenza on supply chains [46]. Summary by Sections Industry Basic Data - The industry consists of 101 listed companies with a total market value of 1,395.44 billion and a circulating market value of 1,070.09 billion [3]. Price Trends - In June, the average price of broilers was 7.18 yuan/kg, down 0.07% year-on-year and down 3% month-on-month. The average price of chicken products was 8,687.5 yuan/ton, down 6% year-on-year and down 2% month-on-month [11][8]. - The average price of chicks in June was 2.29 yuan/chick, a decrease of 21% month-on-month and 4% year-on-year [8][11]. Production Capacity - As of June 2025, the average stock of parent stock was 23.17 million sets, an increase of 8.5% year-on-year but a decrease of 2.8% month-on-month. The average stock of backup parent stock was 15.57 million sets, down 1.9% year-on-year and up 3.8% month-on-month [34][27]. Sales Performance - In June, the sales revenue of Yisheng Co. for parent and commercial chicks was 1.29 billion, down 13.58% year-on-year and down 25.54% month-on-month. The sales volume was 0.61 billion, up 17.68% year-on-year but down 7.26% month-on-month [14]. - The sales revenue of Shengnong Development for chicken was 11.64 billion, up 4.30% year-on-year and up 1.04% month-on-month, with a sales volume of 12.32 million, up 3.18% year-on-year [14]. Investment Recommendations - The report suggests focusing on companies such as Shengnong Development, Yisheng Co., and Hefeng Co. due to their potential for profit improvement and valuation recovery in the context of expected consumption recovery [46].

Group 1: Core Views - The report maintains an "outperform" rating for the agriculture, forestry, animal husbandry, and fishery sector, highlighting a favorable investment environment for livestock, pet, and pork industries [1][3][12] - The report emphasizes the potential reversal of the beef cycle in 2025, with expectations of rising prices driven by both domestic and international markets [14][21] - The pet industry is identified as a high-growth sector, benefiting from changing consumer demographics and increasing emotional spending [15][18] Group 2: Investment Recommendations - Key recommendations for the livestock sector include Guangming Meat Industry, a rare listed beef company with stable resources from New Zealand, and Muyuan Foods, a leading player in pig farming [1][3][18] - In the pet food sector, Zhongchong Co. is highlighted as a pioneer with synchronized growth in domestic and international markets [1][3][18] - For the pork industry, the report recommends companies such as DeKang Agriculture and Muyuan Foods, which are expected to benefit from improving cash flows and dividend ratios [1][3][16] Group 3: Market Trends and Data - As of June 2025, the average price of live pigs was 14.80 yuan/kg, reflecting a month-on-month increase of 2.85% [2][21] - The report notes a decrease in the price of 7kg piglets to 433 yuan/head, down 13.95% month-on-month, indicating a cautious approach to industry expansion [2][21] - The poultry sector is experiencing increased supply, with expectations of demand recovery, particularly for yellow chickens, which are anticipated to benefit from domestic demand improvements [28][39]

Summary of Industry and Company Insights from Conference Call Industry Overview - **Agricultural Industry Performance**: The agricultural industry in the first half of 2025 is relatively stable, with grain prices at a low point and pig prices showing a year-on-year recovery, although they are declining on a quarter-on-quarter basis. Poultry prices are affected by weak demand in the catering sector and abundant supply, leading to a continued downturn in the poultry farming sector [2][3]. Key Points on Specific Sectors 1. Pig Farming Industry - **Price and Profitability**: The average pig price is approximately 14.8 yuan per kilogram, down 4.2% year-on-year. However, due to a greater decline in farming costs compared to pig prices, industry profitability has significantly improved, with average profit per head around 70 yuan, compared to a loss of 25 yuan in the same period last year [3][4]. - **Company Performance**: Major companies like Muyuan Foods are expected to report over 10.5 billion yuan in profits for the first half of the year, with a 90% increase in Q2 profits. Other companies like Shennong Group and Wens Foodstuffs are also showing strong profitability despite challenges in certain segments [4]. 2. Poultry Farming Industry - **Current Situation**: The white feather broiler market remains at a low point, with upstream companies benefiting from downstream capacity expansion. However, the price drop in upstream is greater than in downstream. The average selling price of layer chicks has increased by 40% year-on-year to about 4.3 yuan per chick due to supply constraints [5]. - **Financial Performance**: Companies like Shengnong Development expect a 22% year-on-year growth in Q2 performance, while Wens and Lihua are facing losses in the yellow feather chicken segment, averaging losses of 0.2 to 0.3 yuan per bird [5]. 3. Pet Food Market - **Market Dynamics**: The domestic pet food market remains robust, with online GMV growth of 17% in the first five months of 2025, compared to 14% last year. However, companies focused on export OEM are facing declines due to US-China trade tensions, while strong domestic brands are expected to maintain high growth rates [6][9]. - **Company Performance**: Companies like Guibao and Zhongchong are projected to see significant growth, with expected Q2 growth rates of around 40% and 31%, respectively. In contrast, companies heavily reliant on export OEM may see stagnant or slightly declining performance [10]. 4. Feed and Animal Health Sub-Industries - **Sales Growth**: The feed and animal health sectors are benefiting from a recovery in livestock numbers and stable profitability. For instance, Bangji Technology reported over 200% year-on-year growth in feed sales, while Haida Group expects a growth rate of 25% to 30% [7]. - **Vaccine Demand**: There has been a recovery in vaccine demand, with prices for certain products like Tylosin and Tiamulin increasing by 30% and 10%, respectively. Companies like Keqian Bio are expected to see a 20% to 25% growth in Q2 performance [8]. Recommendations for Investment - **Investment Focus**: Recommendations include focusing on post-cycle breeding varieties, feed, and animal health sectors. Key companies to watch include Bangji Technology, Haida Group, and leading vaccine producers like Keqian Bio and Huisheng Bio. Attention should also be given to low-valuation leading breeding companies with strong performance [11]. - **Market Outlook**: If the pig farming sector can stabilize and avoid overproduction, there is significant potential for valuation increases in the industry, particularly for companies like Muyuan Foods and Wens Foodstuffs [11].

Investment Rating - The report rates the agricultural, forestry, animal husbandry, and fishery industry as "Overweight" due to expected overall profit improvement in the sector [3][4]. Core Insights - The report highlights that the profitability of pig farming is expected to improve, with a stable pig price and a significant increase in average profit per head for self-bred pigs [4]. - Poultry farming shows a mixed outlook, with white chicken prices bottoming out and yellow chicken profitability declining, while egg-laying chicks continue to experience high demand [4]. - The pet food sector is projected to maintain high growth, with leading companies showing strong online sales growth, despite a decline in exports to the U.S. due to tariffs [4]. - Animal health is recovering, with increased demand for vaccines and improved sales of veterinary preparations [4]. - The seed industry faces challenges with declining corn prices and increased competition, leading to pressure on the performance of leading seed companies [4]. Summary by Sections Pig Farming - The average price of pigs in H1 2025 is expected to be 14.80 CNY/kg, a decrease of 4.2% year-on-year, while the average profit for self-bred pigs is projected at 69.04 CNY/head, recovering from a loss of 24.82 CNY/head in H1 2024 [4]. Poultry Farming - White chicken prices are under pressure due to oversupply, with the average price for commodity broiler chicks at 2.4 CNY/bird, down 21% year-on-year. Yellow chicken prices are also declining, with the average price for Qingjiao chicken at 8.9 CNY/kg, down 19% year-on-year [4]. Pet Food - The domestic pet food market is experiencing a growth rate of 17% in online GMV for the first five months of 2025, compared to 14% in the same period of 2024. Leading companies like Guibao Pet and Zhongchong Co. show growth rates of 51% and 26%, respectively [4]. Animal Health - The demand for veterinary vaccines has increased, with a 15.8% year-on-year rise in vaccine approvals in the first five months of 2025. Prices for veterinary preparations like Tylosin and Tiamulin have increased by 39.8% and 9.3%, respectively [4]. Seed Industry - The corn seed market is under pressure due to falling corn prices and high competition, leading to a decline in seed prices and performance expectations for leading seed companies [4].

Group 1: Core Insights - The report emphasizes the importance of policy measures to regulate breeding sow capacity, which may elevate the price center for pigs in 2025-2026, benefiting the poultry sector and leading feed companies [1][38]. - The report highlights the increasing focus on food security amid frequent extreme weather events and trade tensions, suggesting a strategic shift in the agricultural sector [1]. Group 2: Swine Farming - In the first half of 2025, pig prices remained strong, influenced by slow recovery in breeding sow capacity and proactive market behavior before holidays, leading to a stable price range of 14.0-15.0 yuan/kg [12][15]. - The report anticipates limited growth in pig supply for 2025 due to cautious replenishment by producers, with expectations for pig prices to remain favorable in the second half of 2025 [15][31]. - Key companies recommended for investment in the swine sector include Muyuan Foods and WH Group, noted for their cost advantages and strong performance [38]. Group 3: Poultry Farming - The report is optimistic about the white-feathered chicken breeding sector, expecting a tightening supply of parent stock in the second half of 2025, which will positively impact the market [40][58]. - For yellow-feathered chickens, the report indicates that the current low inventory of parent stock, combined with reduced production costs, sets the stage for potential price recovery and profit expansion [52][58]. - Recommended companies in the poultry sector include Lihua Agricultural and Dekang Agriculture, which are expected to benefit from improving market conditions [58]. Group 4: Feed and Veterinary Services - The report notes a recovery in demand for feed products as the breeding sector improves, with a positive outlook for companies like Haida Group, which is well-positioned to capitalize on this trend [6][38]. - The veterinary services sector is also expected to see a recovery in demand, with a focus on leading companies in the animal health space [38]. Group 5: Seed Industry - The report highlights the rising importance of food security, with a focus on the seed industry, particularly in rice and corn, as the sector enters a phase of recovery and growth [38]. - The hybrid rice seed industry is expected to see improved supply-demand dynamics, while corn prices are rebounding, encouraging farmer planting enthusiasm [38][58]. - Recommended companies in the seed sector include Longping High-Tech and Dabeinong, which are anticipated to benefit from these trends [38].

Investment Rating - Industry rating: Outperform the market (maintained rating) [11] Core Insights - The pig sector is experiencing continuous compression of profit margins, with a focus on the expected differences in the pig market. As of June 21, the average price of pigs in China was 14.37 CNY/kg, down 0.28% from the previous week, with self-breeding profits around 92 CNY/head, significantly narrowed from 160 CNY/head in early May. The average weight of pigs at slaughter was 128.28 kg, showing a slight decrease, while the proportion of pigs over 150 kg was 4.74% [1][15][16]. Summary by Sections Pig Sector - The pig price remains low, and the price of piglets continues to decline. The average price of 7 kg piglets is 443 CNY/head, and 50 kg sows are priced at 1619 CNY/head, with piglet prices down over 200 CNY from their peak. The supply side shows a clear trend of reduced weight, but absolute weights remain historically high [1][15]. - The report emphasizes the low valuation and expected differences in the pig sector, highlighting the profitability of leading companies. The average market value per head for major players like Muyuan Foods and DeKang Agriculture is between 2000-3000 CNY, while others are below 2000 CNY, indicating a relative historical low in valuations [2][16]. Pet Sector - JD.com reported significant growth in the pet sector during the 618 shopping festival, with a 32% year-on-year increase in transaction users and a 39% increase in new pet owners. Domestic brands are gaining a strong foothold, with 7 out of the top 10 pet food brands being Chinese [3][17]. - Pet food exports have shown continuous growth, with 139,100 tons exported from January to May 2025, a year-on-year increase of 10.89%, amounting to 4.175 billion CNY [3][18]. Poultry Sector - The white chicken sector faces uncertainties in breeding imports due to outbreaks of avian influenza, leading to a 40.66% year-on-year decline in breeding stock updates. The average price of broiler chicks is 2 CNY/bird, down from the previous week [4][19]. - The yellow chicken supply may contract, with demand being a critical variable. The current breeding stock is at a low level, and the demand for yellow chicken is expected to improve in the second half of the year [5][21]. - The egg-laying chicken sector is experiencing high prices due to restricted imports, with the average price of egg-laying chicks at 4.0 CNY/bird, down 2% from the previous week [6][22]. Planting Sector - The focus on food security emphasizes the need for self-sufficiency in grain production, with a significant contribution from yield improvements. The Ministry of Agriculture reports that yield increases contributed over 80% to grain production growth in 2024 [7][23]. - The report highlights the importance of biotechnology in enhancing agricultural competitiveness, with recommendations for leading seed companies and agricultural resource firms [8][24]. Feed and Animal Health Sectors - The feed sector is recommended for investment, particularly in companies like Haida Group, which is expected to see improved market share and performance. The prices of various fish species are showing mixed trends, with overall fish prices expected to rise due to policy support [9][25]. - The animal health sector is adapting to new demands and competition, with a focus on innovative products and potential growth in the pet health market. Key recommendations include companies like Keqian Biological and Zhongmu Co [10][26].