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]

Core Viewpoint - The article discusses five seemingly ordinary industries that possess significant profit potential, highlighting their growth prospects and market dynamics in the current economic environment [3][40]. Group 1: Adult Products Industry - The adult products market in China is experiencing growth, with a current penetration rate of 38.5%, compared to Japan's 74.1%, indicating substantial room for expansion [6]. - The market size for adult products is projected to reach 168.53 billion yuan in 2022, with expectations to exceed 200 billion yuan by 2025 [6]. - The most preferred types of adult products among Chinese consumers are condoms (55.9%) and lingerie (53.8%) [8]. - The leading brand in consumer recognition is Durex (70.4%), followed by Jissbon (54.1%) [9]. - The industry has a high profit margin, with production costs often being a fraction of the retail price [11]. Group 2: Waste Recycling Industry - The waste recycling industry in China is emerging as a significant business opportunity, with over 600 million tons of recyclable resources generated annually [15]. - The industry size reached 870 billion yuan in 2019, with projections to exceed 1.5 trillion yuan by 2025 [17]. - The sector is becoming increasingly important due to national emphasis on environmental protection and resource recycling [18]. Group 3: Funeral Services Industry - The funeral services industry is witnessing growth due to the aging population, with increasing demand for services [21]. - The market size for the funeral industry is expected to surpass 400 billion yuan by 2026 [24]. - The industry is characterized by high profit margins, as families often do not negotiate prices for essential services [22]. Group 4: Eyewear Industry - The eyewear market in China is expanding rapidly, driven by the increasing prevalence of myopia, particularly among youth [27]. - The market size has surpassed 100 billion yuan, with a projected compound annual growth rate (CAGR) exceeding 7% from 2021 to 2026 [30]. - The profit margins in the eyewear industry are substantial, with high-end glasses costing around 200 yuan to produce but selling for over 1,000 yuan [32]. Group 5: Pet Industry - The pet industry in China is booming, with over 98 million households owning pets as of 2022, leading to a market size of 592.8 billion yuan, a 20.1% increase year-on-year [34]. - The pet medical market is also growing, with the market size increasing from 33 billion yuan in 2017 to 67.5 billion yuan in 2022 [38]. - The online pet consumption market is thriving, with nearly 60% of purchases made through online channels [35].

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The report highlights a strong policy catalyst and a resonating fundamental backdrop, indicating a positive outlook for the pig farming sector as prices are expected to rise from current lows [4][28] - The report suggests that the investment logic for pig farming is improving marginally, driven by both fundamental and policy factors, with a recommendation for specific companies in the sector [5][28] - The report notes that the domestic feed market is benefiting from the post-cycle of poultry and livestock, with strong overseas demand supporting prices [5][28] Summary by Sections Weekly Observation - The report indicates that the current rhythm of pig shipments is suppressing short-term prices, with the national average price for pigs at 13.67 yuan/kg as of August 8, 2025, down 0.60 yuan/kg week-on-week and down 6.97% year-on-year [12][4] - The average weight of pigs at market as of August 7, 2025, is 127.80 kg, showing a slight decrease week-on-week but an increase year-on-year [12][4] - The utilization rate of breeding facilities is reported at 51.6%, reflecting a decrease both month-on-month and year-on-year [12][4] Weekly Perspective - The investment logic for pig farming is showing signs of improvement, with expectations for prices to rise in the second half of 2025 due to both fundamental and policy support [28] - The report recommends several companies including Muyuan Foods, Wens Foodstuff Group, and others as key investment opportunities in the pig farming sector [5][28] Market Performance - The agricultural sector outperformed the broader market by 0.4 percentage points during the week of August 4-8, 2025, with the agricultural index rising by 2.52% [33][36] - Specific stocks such as Zhongji Health and Zhenghong Technology saw significant gains, leading the market [41][33] Price Tracking - As of August 8, 2025, the average price for pigs is reported at 13.71 yuan/kg, with a decrease of 0.62 yuan/kg from the previous week [44][45] - The report also tracks prices for other agricultural products, noting fluctuations in chicken and beef prices during the same period [44][45]

Group 1 - The focus of monetary policy will be on enhancing policy transmission, reducing overall financing costs, and promoting the use of structural monetary policy tools, with increased funding directed towards technology innovation, service consumption, and elderly care sectors [1] - HSBC maintains a positive outlook on the A-share market, particularly favoring high-quality growth sectors, with significant expected profit growth for AI infrastructure, AI drivers, and AI application companies by 2025 [2] - The further popularization of AI and the deepening trend of domestic substitution are expected to accelerate revenue growth in cloud services, supported by increased capital expenditures from major Chinese tech companies and telecom service providers [3] Group 2 - New consumption trends are emerging, driven by structural changes in society and demographics, with the Z generation becoming a core force in this new consumption wave, contributing 40% of total consumption despite being less than 20% of the population [4] - The retail sales of home appliances and furniture have seen strong growth of 30.7% and 22.9% year-on-year, respectively, due to policies like the old-for-new subsidy [4] - HSBC remains optimistic about the Asian market, particularly in healthcare, while adjusting its view on the industrial sector to neutral due to high valuations [6] Group 3 - HSBC holds a positive view on the markets of China, India, and Singapore, while maintaining a neutral stance on Japan [7] - The company has a favorable outlook on the US stock market, especially in the communication services, information technology, and financial sectors, while keeping a neutral view on US Treasury bonds and investment-grade bonds [8]

Group 1 - The core viewpoint emphasizes that monetary policy will focus on enhancing policy transmission, reducing overall financing costs, and promoting the use of structural monetary policy tools. There will be increased funding support for sectors such as technological innovation, service consumption, and elderly care [1] - The company maintains a positive outlook on the A-share market, particularly favoring high-quality growth sectors. According to market consensus, companies involved in AI infrastructure, AI drivers, and AI applications are expected to see significant profit growth by 2025 [3] - The further popularization of AI and the deepening trend of domestic substitution are anticipated to accelerate revenue growth in cloud services. Major Chinese tech companies and telecom service providers have begun to increase capital expenditures, which is expected to improve user data and boost industry investment confidence [4] Group 2 - New consumption trends are emerging, driven by structural changes in Chinese society and demographics. The Z generation is becoming a core force in this new consumption wave, contributing 40% of the total consumption despite representing less than 20% of the population. Their overall consumption scale is projected to quadruple to 16 trillion yuan by 2035 [6][7] - The company expects that as the consumption power of the Z generation continues to rise, the new consumption sector will sustain growth, presenting structural growth opportunities [7] Group 3 - The company maintains an optimistic view on the Asian market, particularly in the healthcare sector, which is seen as attractive due to increased investment and AI innovation. However, caution is advised as the industrial sector's valuations have risen above their five-year average [10] - The company is optimistic about markets in China, India, and Singapore, while maintaining a neutral stance on Japan. The US stock market is viewed positively, especially in the communication services, information technology, and financial sectors [11]

Group 1: Consumer Goods and Market Trends - The "old-for-new" policy for consumer goods has shown significant effectiveness, with 48.8 million consumers purchasing 51.5 million digital products, generating sales of 143.26 billion yuan as of May 22 [2] - E-commerce platforms have seen a surge in sales during the "618 shopping festival," with notable increases in categories such as 3C products, where sales of action cameras and gaming laptops grew over 300% and 110% respectively [2] - The automotive market is experiencing steady growth, with passenger car sales reaching 1.755 million units in April, a year-on-year increase of 14.5%, and new energy vehicle sales growing by 33.9% to 905,000 units [3] Group 2: Emerging Consumption Sectors - New consumption sectors such as pet products and trendy toys are gaining traction, with pet brand sales doubling during the "618" event, showcasing the competitive advantage of domestic brands [4] - The toy sector also reported impressive growth, with companies like Pop Mart seeing a revenue increase of 165%-170% in Q1, driven by a 95%-100% growth in the Chinese market [4] - Health-related consumption is on the rise, with retail sales of sports and entertainment goods increasing by 23.3% in April, and sales of health monitoring devices growing by 41.6% in Q1 [5] Group 3: Policy Support and Economic Outlook - Various cities are implementing comprehensive measures to boost consumption, focusing on new consumption models and local economic development [7] - The government is expected to continue supporting consumption and technology sectors, with fiscal spending likely to increase, indicating a positive outlook for sustained consumer growth [8] - The overall sentiment in the consumer sector is optimistic, with many companies in the sports and retail industries expressing confidence in future growth [6]

Core Viewpoint - The performance of renowned fund manager Jia Chengdong at Shenwan Hongyuan Fund has raised concerns among investors, as his recent funds have underperformed significantly in a rising market [1][5]. Group 1: Fund Performance - Since Jia Chengdong joined Shenwan Hongyuan Fund in March 2025, the Shenwan Hongyuan New Power Fund has lost over 7%, underperforming its benchmark by 12 percentage points [2][3]. - Another fund managed by Jia, the Shenwan Hongyuan Industry Selection Fund, has also lost over 5%, trailing its benchmark by more than 9% [2][3]. - The A-share market has seen a strong rally, with the Shanghai Composite Index rising over 7% since June 2025, highlighting the stark contrast in performance [2]. Group 2: Fund Holdings and Market Trends - The Shenwan Hongyuan New Power Fund heavily invested in pet economy stocks, which have collectively plummeted since June, despite being marketed as essential due to aging and single-person demographics [3]. - The price-to-earnings ratio of the pet stock "Guibao Pet" reached 50 times, significantly exceeding the industry average, indicating a disconnect between growth expectations and actual performance [3]. Group 3: Company Challenges - Shenwan Hongyuan Fund has faced multiple fund liquidations in 2025, with two funds recently announced for termination due to struggling below the regulatory threshold of 200 million yuan [5][6]. - This marks the fifth and sixth funds facing liquidation this year, with previous funds also having exited the market due to similar issues [6]. Group 4: Management and Structural Issues - The company's reform efforts under Chairman Chen Xiaosheng, aimed at creating a robust investment research system, have not translated into improved performance, revealing a significant gap between vision and reality [7]. - The talent pool within the company is concerning, with 7 out of 27 fund managers having less than 3 years of experience, and 5 managers overseeing 6 or more funds, leading to potential overextension [8]. - As of June 2025, the company's asset management scale was 82.679 billion yuan, ranking 66th in the industry, a decline from its peak of 102.492 billion yuan in June 2015 [8].

Core Viewpoint - The article emphasizes the transformation in the new consumption era, particularly in the beauty and personal care sectors, driven by product innovation and emotional value consumption, contrasting with the previous era dominated by traffic dividends [2][3]. Group 1: New Consumption Trends - The new consumption wave is characterized by structural product innovation rather than traffic-driven growth, with a focus on emotional value and unique product offerings to meet evolving consumer demands [2][4]. - The beauty sector is experiencing continuous iteration of collagen components, while daily chemical products are upgrading in functionality and emotional appeal, exemplified by products like Zhenjia fragrance laundry detergent and Cold Acid Spirit toothpaste [2][4]. Group 2: Channel and Media Evolution - New channels and media are accelerating product innovation and market penetration, with platforms like Douyin facilitating product testing and brand exposure [3][4]. - Retail formats such as membership stores and warehouse supermarkets are playing a crucial role in product development and consumer engagement, helping brands refine their offerings before broader market launches [3]. Group 3: Opportunities in Traditional Industries - There is a notable trend of product innovation within traditional industries such as daily chemicals, personal care, health products, beauty, snacks, and more, as companies adapt to new consumer needs and market dynamics [4]. - Established brands are facing challenges in responding to rapid market changes, providing opportunities for new brands to leverage insights for product differentiation and market share growth [4].

Group 1: Consumer Services - The report highlights the importance of expanding domestic demand as a key driver for economic growth amid uncertain macroeconomic conditions, with expectations for supportive policies [1] - In Q3, the tourism sector is expected to perform well due to low base effects and the peak travel season, with recommendations for stocks like Changbai Mountain, Nanjing Commercial Travel, and Jiuhua Tourism [1] - The education sector shows stable growth potential, particularly for K12 companies like Xueda Education and AI-focused companies like Doushen Education [1] Group 2: Beauty and Personal Care - The medical beauty sector is undergoing changes due to the emergence of new institutions, with a recommendation to focus on Aimeike as the industry gains attention [2] - Q3 is traditionally a slow season for cosmetics, but opportunities exist for companies with clear catalysts in the second half of the year, including Shangmei Co., Mao Ge Ping, and Ruan Ben Co. [2] - The childcare subsidy policy is expected to benefit companies like Shangmei Co. and Shanghai Jahwa [2] Group 3: Pet Industry - The pet food sector, particularly staple foods, shows strong resilience and performance, while health products and pet supplies are experiencing rapid growth [3] - Domestic brands are expanding overseas and have established production capabilities, making external risks relatively controllable [3] Group 4: Duty-Free - The duty-free sector in Hainan is seeing a narrowing decline in sales, with stable growth in visitor traffic and the gradual opening of city duty-free stores expected to bring additional revenue [4] - The sector's funding structure is favorable, and the fundamentals are at a bottoming stage, with ongoing policy optimizations [4] Group 5: Traditional Retail - The new childcare subsidy policy is expected to positively impact maternal and infant retail companies like Aiyingshi and Kidswant, with more local policies anticipated [5] - Yonghui Supermarket has opened 23 "fat reform" stores, and attention is recommended on the progress and effectiveness of these openings [5] - The average price for toy and beauty care shops in the Small Commodity City has exceeded 130,000, indicating a higher market expectation for future pricing [5] Group 6: Gold and Jewelry - New gold and jewelry companies are focusing on product development and consumer preference analysis through digital systems and social media platforms [6] - As the consumer attributes of gold jewelry companies increase, their valuation systems are expected to shift towards consumer product PEG valuations [6] - The sector is anticipated to perform well in Q3, with recent data indicating a recovery in terminal demand for gold jewelry [6]

Group 1 - HSBC expresses optimism towards A-shares, focusing on high-quality growth sectors [1] - The monetary policy will emphasize enhancing policy transmission, reducing overall financing costs, and promoting structural monetary policy tools [1] - Increased funding support is expected for sectors like technology innovation, consumer services, and elderly care [1] Group 2 - In the technology sector, AI is gaining significant attention, with companies in AI infrastructure, AI drivers, and AI applications showing notable profit growth this year [1] - The acceleration of capital expenditure by major Chinese tech companies and telecom service providers is anticipated to boost cloud business growth and improve user data [1] - The consumer sector is benefiting from trade-in subsidy policies, with retail sales of home appliances and audio-visual equipment growing by 30.7% and furniture by 22.9% year-on-year [1] Group 3 - New consumption trends are reshaping the market, driven by long-term structural changes in Chinese society and demographics [2] - The Z generation (born 1995-2009) is becoming the core force in new consumption, with their spending power expected to continue rising [2] - Structural opportunities in the new consumption sector led by the Z generation are worth attention [2]