Investment Rating - The report maintains an "Overweight" rating for the agriculture, forestry, animal husbandry, and fishery industry [48]. Core Viewpoints - The SW agriculture, forestry, animal husbandry, and fishery industry outperformed the CSI 300 index, rising by 4.87% from October 31, 2025, to November 13, 2025, exceeding the index by approximately 5.04 percentage points [11]. - All sub-sectors within the industry recorded positive returns during the same period, with notable increases in agricultural product processing (9.03%), fishery (8.12%), animal health (5.57%), planting (4.57%), breeding (2.94%), and feed (2.45%) [12]. - Over 90% of individual stocks in the industry achieved positive returns, indicating strong overall market performance [13]. - The industry valuation has rebounded, with the overall price-to-book (PB) ratio at approximately 2.94 times as of November 13, 2025, which is still relatively low compared to historical levels [17]. Industry Important Data - **Pig Farming**: The average price of external three yuan pigs decreased from 12.52 CNY/kg to 11.74 CNY/kg during the reporting period. The cost of corn and soybean meal showed fluctuations, with corn priced at 2260.39 CNY/ton and soybean meal at 3072 CNY/ton as of November 13, 2025 [21][23]. - **Profitability**: As of November 14, 2025, self-breeding pig farming reported a loss of 114.81 CNY per head, while purchasing piglets resulted in a loss of 205.64 CNY per head, indicating a decline in profitability [26]. - **Poultry Farming**: The average price of broiler chicks was 3.49 CNY per chick, slightly down from the previous week, while the average price of white feather broilers increased to 7.12 CNY/kg, with a loss of 0.95 CNY per bird [28][31]. Industry Important News - The Ministry of Agriculture and Rural Affairs emphasized accelerating the self-reliance and controllability of seed technology during a recent meeting, highlighting the importance of domestic seed sources and innovation in the seed industry [35]. Company Important News - Key companies to watch include Muyuan Foods (002714), Wens Foodstuff Group (300498), and others, which are positioned to benefit from industry trends and potential recovery in profitability [48][49].

Investment Rating - The report maintains an "Overweight" rating for the agriculture, forestry, animal husbandry, and fishery industry [48]. Core Viewpoints - The SW agriculture, forestry, animal husbandry, and fishery industry outperformed the CSI 300 index, rising by 4.87% from October 31, 2025, to November 13, 2025, exceeding the index by approximately 5.04 percentage points [11]. - All sub-sectors recorded positive returns during the same period, with notable increases in agricultural product processing (9.03%), fishery (8.12%), animal health (5.57%), planting (4.57%), breeding (2.94%), and feed industry (2.45%) [12]. - The overall price-to-book (PB) ratio for the industry is approximately 2.94 times, indicating a recovery in valuation, yet it remains at a relatively low historical level, around the 65.9 percentile since 2006 [17]. Industry Important Data - **Pig Farming**: The average price of external three-way cross pigs decreased from 12.52 CNY/kg to 11.74 CNY/kg during the reporting period. The cost of corn and soybean meal showed fluctuations, with corn priced at 2260.39 CNY/ton and soybean meal at 3072 CNY/ton as of November 13, 2025 [21][23]. - **Profitability**: As of November 14, 2025, self-breeding pig farming reported a loss of 114.81 CNY per head, while purchasing piglets resulted in a loss of 205.64 CNY per head, indicating a decline in profitability compared to the previous week [26]. - **Poultry Farming**: The average price of broiler chicks was 3.49 CNY per chick, slightly down from the previous week, while the average price of white feather broilers increased to 7.12 CNY/kg, with a loss of 0.95 CNY per bird, showing a slight improvement in profitability [28][31]. Industry Important News - The Ministry of Agriculture and Rural Affairs emphasized accelerating the self-reliance of seed technology and ensuring the autonomy of seed sources during a recent meeting, highlighting the importance of domestic seed industry leaders [35]. Company Important News - Key companies to watch include Muyuan Foods (002714), Wens Foodstuff Group (300498), and others, which are positioned to benefit from the ongoing industry trends and developments [48][49].

Core Insights - The report maintains a positive outlook on the agricultural sector, particularly in pig farming, despite ongoing supply pressures and potential acceleration in capacity reduction [1][5][6]. Group 1: Pig Farming - Supply pressures continue to be significant, with a reported decrease in the number of breeding sows by 0.77% month-on-month in October [5][17]. - The average price of market pigs has declined to 12.16 CNY/kg as of November 6, reflecting a week-on-week decrease of 0.49% [5][26]. - The profitability of pig farming remains negative, with losses reported at -89.21 CNY per head for self-bred pigs and -175.54 CNY per head for purchased piglets as of November 7 [5][37]. Group 2: Poultry Farming - The average price of white feather broilers remained stable at 7.09 CNY/kg as of November 7, with a reported loss of -1.25 CNY per bird [5][38]. - The number of breeding chickens has increased significantly, with a 143.18% month-on-month rise in the number of grandparent stock updated in October [5][38]. Group 3: Animal Health - The demand for animal health products is expected to rebound, driven by a recovery in breeding cycles and an increase in inventory levels [5][47]. - The report highlights the ongoing development of vaccines, including progress in African swine fever vaccine trials, which may enhance the sector's growth potential [5][47]. Group 4: Seed Industry - The average prices for wheat, soybean meal, and corn have shown slight declines, with wheat at 2487 CNY/ton, soybean meal at 3098 CNY/ton, and corn at 2239 CNY/ton as of November 7 [5][51]. - The report emphasizes the importance of food security and the promotion of biotechnology in the seed industry [5][51]. Group 5: Pet Industry - Pet food exports amounted to 823 million CNY in September, reflecting a year-on-year decrease of 6.8%, while domestic sales continue to grow, with a 3% increase across major e-commerce platforms [5][56][59]. - The report suggests that companies with a lower proportion of export business may be less affected by tariff disruptions, while those focusing on domestic growth are likely to enhance their market share [5][56][59].

Investment Rating - Industry Rating: Outperform the market (maintained rating) [9] Core Views - The swine sector continues to experience losses, with an increasing number of culled sows, indicating a need to focus on the expected recovery in this sector [2][13] - The dairy and beef sectors are undergoing significant capacity reduction, with a potential turning point for milk prices anticipated [3][15] - The pet sector is witnessing a trend towards premiumization and the rise of domestic brands, reshaping the competitive landscape [4][16] - The poultry sector is facing challenges with breeding stock shortages and improving consumer demand for yellow chickens [5][18] - The seed industry is poised for a turnaround, with an emphasis on biotechnology and the commercialization of genetically modified crops [7][23] - The feed sector shows signs of recovery, with leading companies like Haida Group achieving revenue and profit growth [24][26] Summary by Sections Swine Sector - The industry continues to face losses, with the average price of live pigs at 12.02 CNY/kg, down 4.07% from the previous week [13] - The average market value per head for leading companies is at historical low levels, with Muyuan at 3000-3500 CNY/head and Wens at 2000-3000 CNY/head [14] - Recommended stocks include leading breeders like Muyuan and Wens, with additional focus on flexible stocks such as Shennong Group and Dekang Agriculture [14] Beef Sector - The price of beef cattle is showing signs of stabilization, with the average price for fattened bulls at 25.62 CNY/kg [15] - The dairy cow population has decreased by 8%, indicating a significant capacity reduction [15] - Companies with mother cow resources or those adopting a "milk-meat linkage" model are expected to have stronger profitability [15] Pet Sector - The Double Eleven shopping festival highlighted the resilience and structural upgrades in the pet food market, with domestic brands gaining market share [4][16] - Key recommendations include pet food brands like Guibao Pet and Zhongchong Co., with a focus on companies with technological advantages and comprehensive product lines [17] Poultry Sector - The white chicken sector is under pressure due to breeding stock shortages, with a focus on the impact of avian influenza on imports [18][19] - Yellow chicken prices are expected to improve due to supply constraints and increasing consumer demand [20] - Recommended stocks include leading companies like Shennong Development and Yisheng Biological [19] Seed Sector - The seed industry is expected to benefit from increased focus on food security and the commercialization of genetically modified crops [7][23] - Key recommendations include leading seed companies like Longping High-Tech and Dabeinong [23] Feed Sector - Haida Group is highlighted as a key player in the feed sector, with significant market share growth and revenue increases [24][26] - The overall feed market is expected to recover as smaller companies exit the market, leading to improved conditions for remaining players [24]

Investment Rating - The industry investment rating is "Overweight," indicating that the growth level of the industry is expected to exceed that of the CSI 300 index in the next six months [68][69]. Core Insights - The report highlights the potential for long-term value in the pig farming sector, emphasizing the importance of selecting companies with cost management advantages. The cyclical nature of pig farming is expected to lead to a reasonable reduction in production capacity, which may positively influence pig prices and overall sector performance [7][8]. - The report suggests focusing on leading companies in the pig farming industry, such as Muyuan Foods and Wens Foodstuff Group, which are expected to benefit from optimized expansion and growth potential [11]. - The animal health sector is anticipated to recover alongside improvements in farming operations, with a focus on leading companies in vaccine development and innovative research [12]. Summary by Sections Livestock Industry - In September, the total sales of pigs from listed companies reached 12.977 million heads, a month-on-month decrease of 7.13%. The average selling price of pigs was 13.03 yuan/kg, down 6.02% month-on-month [8][9]. - The report indicates that the profit from self-breeding and purchased pig farming was -89.33 yuan/head and -179.72 yuan/head, respectively, as of October 31 [8]. Planting Industry - The USDA's report predicts an increase in global consumption of wheat by 5 million tons for the 2025/26 season, reaching 814.5 million tons, driven by higher feed and residual usage in several countries [13]. - The report also notes that global rice supply is expected to reach a record 800 million tons, with trade and consumption slightly increasing [14]. Pet Industry - The report forecasts a strong growth trajectory for domestic pet food companies, with expected compound annual growth rates of 17% for pet staple foods and 25% for pet snacks by 2026 [17]. - Leading domestic pet food companies such as Guibao Pet and Zhongchong Co. are recommended for investment [18]. Market Performance - The agricultural sector index increased by 1.99% during the period from October 25 to November 1, 2025, ranking 6th among 31 industry sectors [19][20]. - The report notes that the animal health, livestock, and planting sectors showed positive performance, while the fishery sector experienced a decline [19]. Company News - Muyuan Foods reported a net profit of 14.78 billion yuan for the first three quarters of 2025, with a significant reduction in debt [26]. - Zhengbang Technology's revenue increased by 82.58% year-on-year, but net profit fell by 97.25% due to asset impairment [27]. - New Hope Liuhe issued a 500 million yuan bond for rural revitalization and technological innovation, reflecting strong market confidence [29].

Core Viewpoint - The agricultural, animal husbandry, and fishery sector has seen a midday surge, with the highest "pig content" ETF (159275) experiencing a brief low-level fluctuation before a sudden rise, currently up by 0.2% [1] Group 1: Market Performance - The agricultural, animal husbandry, and fishery ETF (159275) opened with a slight dip but later rose, reflecting a positive market sentiment [1] - Key stocks in the sector, including Brother Technology, Jin Xin Nong, and Mei Hua Biological, saw significant gains, with Brother Technology rising over 5% and several others increasing by more than 1% [1] Group 2: Industry Insights - Recent trends indicate that national pig prices initially rose to 12.35 yuan/kg, a peak for October, but later fell due to insufficient demand and increased market supply [2] - Analysts predict accelerated de-capacity in the pig farming sector, with a focus on biological breeding and the promotion of genetically modified corn [3] - The poultry industry is expected to benefit from price increases in the white feather chicken supply chain due to overseas avian influenza impacts [3] Group 3: Investment Opportunities - The agricultural, animal husbandry, and fishery ETF (159275) is highlighted as a key investment opportunity, tracking the comprehensive agricultural index with significant exposure to leading pig farming companies [5] - The ETF's index shows a price-to-book ratio of 2.56, indicating a relatively low valuation compared to historical levels, suggesting a favorable long-term investment opportunity [3]

Investment Rating - Industry Rating: Outperform the market (maintained rating) [11] Core Views - The agricultural sector is experiencing a mixed performance with significant opportunities in various sub-sectors, particularly in pig farming, cattle, pets, poultry, and planting industries. The report emphasizes the importance of focusing on leading companies with strong profitability and market positioning [3][4][5][6][8][26]. Summary by Relevant Sections 1. Pig Farming Sector - The decline in pig prices has led to a divergence in profitability among companies, highlighting the need to focus on expected differences in the pig farming sector. The average selling price of pigs in Q3 2025 was between 13-14 CNY/kg, down from 14-15 CNY/kg in H1 2025 [3][15]. - Key companies to watch include leading players like Muyuan Foods and Wens Foodstuff, with valuations at historical low levels [3][16]. 2. Cattle Sector - The raw milk price is stabilizing, while the beef cattle sector may be entering a super cycle. The average price for beef cattle in Q3 2025 was 25.88 CNY/kg, up 2.34% from the previous quarter [4][17]. - Companies with mother cow resources or those adopting a "milk-meat linkage" model are expected to have stronger profitability [4][18]. 3. Pet Sector - The pet economy is thriving, with domestic brands rapidly rising. Major pet food companies reported revenues of 4.737 billion CNY for Guibao Pet and 3.860 billion CNY for Zhongchong Co., with growth rates of 29% and 21% respectively [5][19]. - Recommended companies include Guibao Pet, Zhongchong Co., and Petty Co. [5][20]. 4. Poultry Sector - The white chicken segment is under pressure, with a focus on the need for improved breeding practices. The average price for white chicken was reported to be 3.5 CNY/kg, with a slight increase [6][21]. - The yellow chicken market is expected to see price recovery due to seasonal demand, with companies like Lihua and Wens showing improved performance [6][23]. 5. Planting Sector - The seed industry is anticipated to recover, with a focus on the commercialization of genetically modified corn. Leading companies in the seed sector include Longping High-Tech and Dabeinong [8][26]. - The report emphasizes the importance of agricultural technology and innovation in enhancing competitiveness [8][27]. 6. Feed and Animal Health Sectors - The feed sector has shown revenue and profit growth among leading companies, with Haida Group reporting a revenue increase of 13.24% [8][28]. - The animal health sector is facing challenges due to competition, but there are opportunities for innovation in vaccine development [8][32].

Core Insights - The report maintains a positive outlook on the agricultural sector, particularly in pig farming, despite ongoing losses in the industry [1][3] - The report highlights a potential acceleration in capacity reduction due to supply pressures and policy guidance [6][19] Group 1: Pig Farming - The number of breeding sows decreased by 0.20% month-on-month in September, with a total of 40.35 million sows reported [20][21] - Pig prices have been on the rise, with the average price for market pigs reaching 12.22 CNY/kg on October 30, reflecting a week-on-week increase of 7.10% [29][30] - The profitability of pig farming remains negative, with losses of 89.33 CNY per head for self-bred pigs and 179.72 CNY per head for purchased piglets as of October 31 [35][37] Group 2: Poultry Farming - The average price for white feather broilers increased to 7.09 CNY/kg on October 31, marking a week-on-week rise of 3.05% [39][42] - The report notes a significant increase in the number of breeding stock, with a 143.18% month-on-month rise in the number of grandparent stock updated in October [39][40] Group 3: Animal Health - The demand for animal health products is expected to rebound, driven by a recovery in breeding cycles and an increase in livestock numbers [48] - The report mentions that several companies are actively developing new products, which may enhance growth prospects for the sector [48] Group 4: Seed Industry - The average prices for wheat, soybean meal, and corn have increased, with wheat and soybean meal rising by 0.9% and 1.3% respectively as of October 31 [52][53] - The report emphasizes the importance of food security and the promotion of biotechnology in the seed industry [52][56] Group 5: Pet Industry - Pet food exports amounted to 823 million CNY in September, showing a year-on-year decline of 6.8% [57][60] - Domestic sales of pet food have continued to grow, with a combined growth rate of 3% across major e-commerce platforms in September [60]

Investment Rating - The report maintains a "Positive" investment rating for the agriculture industry [5] Core Viewpoints - The report highlights a contraction in breeding profits and a stabilization in planting, indicating a potential recovery in the agricultural sector [2] - The breeding sector is expected to benefit from policy and market forces driving capacity reduction, which will enhance long-term performance [3] - The planting sector is showing positive fundamentals with an upward trend in grain prices, presenting significant investment opportunities [3] Summary by Relevant Sections Breeding Sector - The pig breeding industry is experiencing a significant reduction in capacity, with current pig prices nearing 12 yuan/kg and a decline in weaned pig prices by approximately 150 yuan/head [8] - In Q3 2025, the revenue of listed pig companies reached 307.845 billion yuan, a year-on-year increase of 10.25%, while net profit was 21.929 billion yuan, up 11.36% [12] - The industry is facing a mid-term supply pressure, with inventory levels rising slightly to approximately 93.374 billion yuan, reflecting an increase in pig stocks [29] Feed and Veterinary Sectors - The feed sector is benefiting from a recovery in livestock numbers, with Q3 2025 revenue reaching 215.297 billion yuan, a year-on-year increase of 12.17% [40] - The veterinary sector has shown significant growth, with revenue of 14.614 billion yuan in Q3 2025, up 24.76% year-on-year, and net profit increasing by 98.94% [40] Planting Sector - The planting sector's revenue for the first three quarters of 2025 was 70.967 billion yuan, a year-on-year increase of 11.19%, with net profit rising by 62.05% [67] - The seed sector continues to face high inventory levels, impacting overall performance, with the average inventory turnover days reaching 318.68 days, the highest since Q1 2020 [67] Pet Sector - The pet food industry is in a growth phase, with domestic brands gaining recognition and market share, although competition is intensifying [3]

Core Viewpoint - The report from Zhonghang Securities highlights a decrease in the number of breeding sows in September, indicating potential further reductions in pig production capacity due to ongoing industry losses and seasonal disease outbreaks [1][2]. Industry Analysis - The number of breeding sows in China as of September was 40.35 million, a year-on-year decrease of 280,000 heads (0.7%) and a month-on-month decrease of 90,000 heads (0.2%) [1]. - The average price of live pigs in China as of October 25 was 11.83 yuan per kilogram, reflecting a week-on-week increase of 5.4%, a month-on-month decrease of 7.2%, and a year-on-year decrease of 32.7%, indicating historically low prices [1]. - As of October 24, the profit margins for pig farming were negative, with losses of 289.07 yuan per head for purchased piglets and 185.68 yuan per head for self-bred piglets, marking an increase in losses compared to the previous month [1][3]. Market Dynamics - The pig farming sector is expected to experience a reasonable reduction in production capacity due to ongoing losses and government policies aimed at reducing overcapacity, which may positively influence pig prices and market trends [2]. - The sales volume of pigs in September reached 7.6726 million heads, a month-on-month increase of 3.89%, while the average selling price decreased to 13.89 yuan per kilogram, down 4.89% from the previous month [3]. - The average weight of pigs sold in September was 102.4 kg, reflecting a month-on-month increase of 1.14% [3]. Animal Health Sector - The animal health industry is expected to recover alongside improvements in the pig farming sector, as historical data shows higher sales during profitable farming years [4]. - Increased competition in the animal health sector is anticipated, with weaker companies exiting the market, leading to higher industry concentration and benefits for larger firms with strong R&D capabilities [4]. - The domestic animal health market has significant growth potential, particularly in the pet medicine sector, supported by government policies promoting domestic vaccine production [4]. Agricultural Sector - The global grain supply and demand dynamics are being affected by geopolitical factors, with adjustments in production forecasts for wheat, rice, corn, and soybeans for the 2025/26 season [5][6][7]. - The focus on seed industry revitalization is expected to continue, with policies promoting the commercialization of biotechnology and genetically modified crops, benefiting leading companies in the sector [8]. Pet Industry - The domestic pet food market is projected to grow significantly, with compound annual growth rates of 17% for pet staple food, 15% for nutritional products, and 25% for snacks by 2026 [8]. - Leading domestic pet food companies are advancing brand strategies and expanding globally, which will help mitigate tariff risks and support overseas business growth [8].