Investment Rating - The report maintains an "Increase" rating for the industry, indicating a positive outlook for the sector's fundamentals and expected performance relative to the benchmark index [5]. Core Insights - Guibao Pet released its second phase of stock incentive plan, which is expected to enhance team motivation. The plan involves granting up to 556,000 restricted shares, accounting for approximately 0.14% of the company's total equity, with performance targets set for revenue and net profit growth from 2025 to 2027 [1]. - Petty Co. has launched its first baking staple production line, optimizing its product structure. The company is transitioning from a pet snack leader to a full-category supplier, with a focus on baking products that meet evolving consumer preferences [2]. - The pet food market is shifting towards baked products, with significant increases in consumer preference for these items, providing a favorable environment for Petty's entry into the baking segment [2]. Summary by Sections Guibao Pet's Stock Incentive Plan - The second phase of the stock incentive plan aims to motivate key personnel by granting 556,000 restricted shares, with a performance assessment based on revenue growth targets of 25%, 53%, and 84% for 2025 to 2027, and net profit growth targets of 16%, 32%, and 45% for the same period [1]. - The expected revenue targets for 2025-2027 are 6.556 billion, 8.025 billion, and 9.651 billion yuan, respectively, with net profit targets of 725 million, 825 million, and 906 million yuan [1]. - The total estimated expense for the incentive plan is 25.836 million yuan, with impacts on financials spread across 2025-2028 [1]. Petty Co.'s Production Line Launch - Petty Co. has officially launched its baking staple production line, enhancing its ability to produce various staple products, including baked, dried, and wet food [2]. - The company is adapting to changing consumer preferences, with a notable increase in the demand for baked pet food, which aligns with the trend of pet owners investing in nutrition rather than just fulfilling basic needs [2]. - The baking staple's digestibility rate is reported at 97%, exceeding the industry average, which supports the product's health attributes [2]. Investment Recommendations - The report suggests focusing on companies with strong channel layouts and innovative product offerings in the pet industry, including Guibao Pet and Petty Co., as well as other firms involved in pet technology and health [3].

Core Insights - The report indicates that the domestic pet industry in China is experiencing significant growth, with total public financing reaching nearly 1 billion yuan in the first half of 2025 [1] - Pet medical services are identified as the most lucrative sector, accounting for 53% of the total investment [1] - The number of pet-related enterprises has surged from 380,000 in 2019 to 4.099 million, representing an increase of over 10 times in six years [1] Industry Growth - The pet transportation sector has seen a dramatic increase, with the number of related enterprises growing nearly 25 times over the past six years [1] - The pet photography industry has also expanded significantly, with the number of companies increasing by over 14 times [1]

Group 1: Industry Overview - The 27th Asia Pet Expo in Shanghai has set a new record with expected attendance exceeding 510,000, reflecting the booming pet economy in China [1] - The pet economy has grown into a trillion-yuan consumption sector, with the urban dog and cat consumption market projected to grow by 7.5% in 2024, reaching 300.2 billion yuan [1] - The domestic pet market is highly fragmented with many categories but few brands, indicating room for growth in refined operations [1] Group 2: Consumer Trends - Young pet owners, particularly those born in the 1990s (41.2%) and 2000s (25.6%), are becoming the main consumer force in the pet market, willing to invest in their pets as integral parts of their lives [1] - There is a rising demand for specialized pet products, including health care, diet, and supplies, leading to opportunities in new categories such as age-specific and breed-specific food, smart products, and health supplements [2] Group 3: Market Innovations - Shanghai is witnessing a surge in new pet-related businesses, including the first "dog gym" GOGOGYM, which offers a one-stop solution for pet health needs [2] - The pet food retail brand "Paitexiansheng" has rapidly expanded since its launch, innovating with fresh and refrigerated food options, and recently completed a $25 million angel round financing, marking a new high in the pet industry [3]

Investment Rating - The report maintains a "Recommended" rating for the agricultural, forestry, animal husbandry, and fishery industry [5][63]. Core Insights - The report highlights the ongoing recovery in the pig farming sector, the potential for valuation reassessment, and the strong growth in the pet economy, particularly for domestic brands [5][63]. Summary by Sections 1. Swine Industry - The average price of pigs as of August 14, 2025, is 13.74 CNY/kg, with a week-on-week decrease of 0.28 CNY/kg. The price of 15 kg piglets is 484 CNY/head, down 33 CNY/head from the previous week [12]. - The report suggests that the swine industry is moving towards a self-regulatory and stabilizing phase, with top companies like Wens Foodstuffs, Muyuan Foods, and Juxing Agriculture being recommended for investment [12][5]. 2. Poultry Industry - The report notes a decline in poultry prices, with the average price of broiler chickens at 3.60 CNY/kg, remaining stable week-on-week. The report recommends companies like San Nong Development and Lihua Shares [21][22]. 3. Animal Health - The animal health sector is experiencing a recovery, with companies like Huayuan Biological, Reap Biological, and Placo showing improved performance. The approval of mRNA vaccines for veterinary use is seen as a significant technological advancement [33][5]. 4. Planting Industry - The report indicates an increase in soybean meal prices, with the average price reaching 3092 CNY/ton, up 2.8% week-on-week. Companies involved in transgenic seed commercialization are recommended for investment [38][42]. 5. Feed Industry - Feed prices are fluctuating, with the price for fattening pig feed at 3.34 CNY/kg, down 0.3% month-on-month. The report suggests that the feed industry is likely to see increased concentration, recommending companies like Haida Group [44][46]. 6. Pet Industry - The pet economy is booming, with the market size for pet consumption in urban areas projected to reach 300.2 billion CNY in 2024, growing by 7.5%. Companies like Guobao Pet, Zhongchong Shares, and Petty Shares are recommended for investment [53][54].

Core Viewpoint - The pet economy in China is rapidly evolving, transforming pets from mere companions to family members, leading to significant market growth and investment opportunities in various sectors [5][6][8]. Industry Overview - The pet economy in China has seen a shift from strict regulations in the 1980s to a more supportive environment post-2000, allowing for increased pet ownership and market growth [8][10]. - The number of pets in urban areas is projected to exceed 120 million by the end of 2024, with the pet consumption market expected to reach 300.2 billion yuan, reflecting a year-on-year growth of 7.5% [13][14]. Company Insights - Youpai Technology, which started as an OEM for pet products, has shifted focus to its own brands, with pet diapers and related products accounting for nearly 74% of its revenue by August 2024 [5][10][14]. - The company has seen its overseas revenue increase from 46.69% to 62.51% over three years, indicating a strong reliance on international markets for growth [14]. - Domestic brands like Guobao Pet have begun to capture market share from established foreign brands, with Guobao achieving a revenue of 5.245 billion yuan in 2024, a 21.2% increase year-on-year [16][17]. Market Dynamics - The pet food market is projected to reach 158.5 billion yuan in 2024, making up 52.8% of the overall pet economy, with a notable shift towards domestic brands offering competitive pricing [16][20]. - The pet medical sector is also gaining traction, with companies like Pulaike reporting high profit margins on pet pharmaceuticals, indicating a lucrative opportunity in this segment [20][21]. Competitive Landscape - Despite the growth potential, the Chinese pet market lacks a dominant "national brand," with local companies still in the early stages of brand establishment compared to global giants like Mars and Nestlé [22][23]. - The market is characterized by a mix of established players and new entrants from various industries, including pharmaceuticals and electronics, indicating a trend of cross-industry investment in the pet sector [24]. Future Trends - The rise of smart pet products and innovative solutions is reshaping consumer expectations, with companies leveraging technology to create new market demands [24].

Core Insights - The pet economy in Jiangsu is rapidly evolving from a simple consumption model to a comprehensive industry chain, driven by emotional companionship and diverse consumer needs [1][2][3] Industry Growth - The overall scale of the pet industry in Jiangsu has surpassed 50 billion yuan, with a projected growth rate of over 35% in 2024 [3][4] - Jiangsu is home to approximately 12 million pets, accounting for about 10% of the national total, indicating significant market potential [2][4] Consumer Behavior - Annual spending on pets has shifted from basic needs to more luxurious services, with average annual expenditures of around 3,000 yuan for dogs and 2,500 yuan for cats [2][3] - The trend shows a decrease in food spending while expenditures on medical care and non-essential services are on the rise, reflecting a more refined and diversified consumption pattern [2][3] Industry Structure - Jiangsu has over 300 pet product manufacturing companies, creating a robust supply chain that supports the pet industry [4][5] - The establishment of specialized pet industry parks, such as the one in Suqian, is fostering a cluster effect, enhancing production capabilities and attracting key enterprises [4][5] Innovation and Development - The pet industry is witnessing innovations in service models, such as high-end retail and community engagement, exemplified by companies like Hero Peter [3][4] - The establishment of the Suzhou Pet Industry Association marks a shift towards standardized and clustered development, aiming for high-quality growth in the sector [6][7] Market Expansion - The export of pet food from Jiangsu is projected to reach 11.28 billion yuan in 2024, with a year-on-year growth of 10.5%, highlighting the international competitiveness of the local pet industry [3][4] - The integration of pet services into tourism and leisure activities is creating new consumption scenarios, such as pet-friendly bars and parks, enhancing customer engagement [8][9] Future Outlook - Jiangsu's pet economy is expected to continue its rapid growth, with projections indicating the market could exceed 100 billion yuan by 2028, contributing significantly to the province's economic development [9]

Core Viewpoints - The report maintains a positive outlook on the agriculture, forestry, animal husbandry, and fishery industry, with a focus on potential investment opportunities in the sector [1][3] - The market performance over the last 12 months shows a decline of 11% for the agriculture sector compared to a 4% decline in the CSI 300 index, indicating relative underperformance [2][10] Livestock Farming Data Tracking - Pig prices have been declining due to increased supply pressure, with the average price of live pigs at 13.74 CNY/kg as of August 14, reflecting a week-on-week decrease of 2.00% [6][29] - The number of breeding sows showed a slight increase in July, with a month-on-month growth of 0.28% [20] - Profitability for self-bred pigs remains positive at 28.85 CNY per head, while purchased piglets show a loss of 157.05 CNY per head [35] Poultry Farming Data Tracking - The average price of white feather broilers was 7.20 CNY/kg as of August 15, with a week-on-week increase of 0.84% [36][39] - The ongoing avian influenza outbreaks in Europe and the U.S. are expected to benefit the white feather chicken industry by stabilizing prices [36] Animal Health Data Tracking - The demand for animal health products is expected to rebound, with significant year-on-year growth in vaccine issuance for various diseases, including a 76% increase for circovirus vaccines in June [45] - The development of African swine fever vaccines is progressing, with clinical trials expected to enhance market interest in the sector [45] Seed Industry Data Tracking - The average prices for wheat, soybean meal, and corn as of August 15 are 2438 CNY/ton, 3097 CNY/ton, and 2394 CNY/ton, respectively, with soybean meal prices increasing by 2.7% week-on-week [48] - The USDA's August report indicates a decrease in global corn and soybean stocks for the 2025/26 season compared to the previous year, which may impact pricing and availability [49][51] Pet Industry Data Tracking - Pet food exports totaled 4.999 billion CNY in the first half of 2025, showing a year-on-year increase of 0.4% [53] - Domestic sales of pet food are growing rapidly, with a combined growth rate of 5% across major e-commerce platforms in July [56] - Companies with strong domestic sales growth and supply chain advantages are expected to enhance their market share [56]

Investment Rating - Industry Rating: Outperform the market (maintained rating) [7] Core Views - The pig sector is experiencing high average weights for market release, indicating a need to focus on the expected differences in the sector [11][12] - The dairy and beef sectors are approaching a new cycle, with opportunities arising from the current market conditions [13][14] - The pet industry is witnessing a rise in domestic brands and a positive trend in pet food exports, highlighting growth potential [15][16] - The poultry sector is facing challenges with breeding imports and demand improvements, suggesting a need for strategic investments [17][19] - The planting sector emphasizes food security and the importance of biological breeding strategies [21][22] - The feed sector is recommended for companies with increasing market share and consistent performance, while the animal health sector is focusing on innovative products to break through market competition [23][24] Summary by Sections Pig Sector - As of August 16, the national average pig price is 14.34 CNY/kg, with a self-breeding profit of approximately 94 CNY per head [11] - The average weight for market release is at a historical high of 127.82 kg, indicating strong supply conditions [11][12] - The sector is advised to focus on undervalued companies with strong profitability, with key recommendations including Wen's Food Group and Muyuan Foods [12] Beef Sector - The live cattle price is 26.70 CNY/kg, showing a 0.6% increase week-on-week, while fresh milk prices are at 3.02 CNY/kg [13][14] - The dairy industry is nearing the end of a downturn, with potential for price rebounds as production capacity clears [14] Pet Sector - The pet economy is thriving, with domestic brands rapidly growing; pet food exports reached 16.79 million tons in the first half of 2025, a year-on-year increase of 5.70% [15][16] - Key recommendations include companies like Guibao Pet and Zhongchong Co., focusing on high-growth domestic firms [16] Poultry Sector - The white chicken sector faces uncertainties in breeding imports, with a 30.14% year-on-year decline in breeding stock updates [17][18] - Investment suggestions include focusing on self-breeding opportunities and companies like Shennong Development [18] Planting Sector - The focus is on achieving high yields through improved breeding strategies, with a significant emphasis on food security [21][22] - Recommended companies include Longping High-Tech and Dabeinong [22] Feed and Animal Health Sectors - The feed sector highlights Hai Da Group for its market share growth and performance consistency [23] - The animal health sector is focusing on innovative products to address market saturation, with recommendations for companies like Kexin Biological [24]

Core Viewpoint - The implementation of the "Personal Consumption Loan Interest Subsidy Policy" aims to stimulate the development of the service consumption market, indicating a shift from product-led consumption to service-led consumption in China [1][11]. Group 1: Emotional Consumption Trends - Emotional consumption is characterized by its localized, immediate nature and high frequency, with significant growth driven by the pursuit of emotional value and care for individuals [1][2]. - The emotional economy, encompassing various business models and innovative products, is becoming a new engine for industrial upgrading, with related industries experiencing an average annual compound growth rate of 12% since 2013, and the market expected to exceed 2 trillion yuan by 2025 [1][3]. - The rise of emotional consumption is evident in the explosive growth of the trendy toy market, with brands like Pop Mart's LABUBU seeing a 315.2% year-on-year sales increase in June [3]. Group 2: Market Dynamics and Consumer Behavior - As GDP per capita exceeds $13,000, the demand for service consumption accelerates, shifting consumer focus from practical product functions to emotional experiences and cultural values [7]. - The emotional economy is reflected in various sectors, including the pet industry, which is projected to reach a market size of 811.4 billion yuan by 2025, evolving into a comprehensive ecosystem that meets emotional needs [4]. - The cultural and tourism industries are also benefiting from this trend, with experiences becoming a new consumption trend, as seen in the popularity of performances and theme parks [4][5]. Group 3: Corporate Strategies and Innovations - Companies with strong IP reserves and integrated industry chains, such as Yuewen Group and Pop Mart, are leveraging emotional consumption trends to enhance their market presence [8]. - The diverse and personalized nature of consumer groups necessitates that companies innovate around emotional resonance and psychological needs to remain competitive [8]. Group 4: Challenges and Regulatory Considerations - The rapid growth of the emotional economy brings challenges such as product homogenization and shortened IP lifecycles, raising concerns within the industry [9][10]. - There is a need for improved legal frameworks and industry standards to address issues like false advertising and emotional fraud, ensuring consumer protection [11].

Investment Rating - The report maintains an "Overweight" rating for the agriculture, forestry, animal husbandry, and fishery industry [46][47]. Core Insights - The SW agriculture, forestry, animal husbandry, and fishery industry slightly underperformed the CSI 300 index, with an increase of 1.32% from August 1 to August 14, 2025, lagging behind the index by approximately 1.08 percentage points [10][11]. - Most sub-sectors recorded positive returns, with only the fishery sector showing a negative return of -0.64%. The agricultural product processing, feed, planting, animal health, and breeding sectors saw increases of 6.53%, 1.88%, 0.97%, 0.93%, and 0.38%, respectively [11][12]. - Approximately 57% of stocks in the industry recorded positive returns during the same period [12]. Industry Data Summary - **Pig Farming**: - The average price of external three yuan pigs fell from 14.21 CNY/kg to 13.82 CNY/kg between August 1 and August 14, 2025. - The cost of corn was 2394.12 CNY/ton, showing a recent decline, while soybean meal was priced at 3126 CNY/ton, which increased recently [21][23]. - Profit for self-bred pigs was 28.85 CNY/head, while the profit for purchased piglets was -157.05 CNY/head, both showing a decline compared to the previous week [26]. - **Poultry Farming**: - The average price of broiler chicks was 3.58 CNY/chick, which continued to rise, while the average price for layer chicks was 3.6 CNY/chick, showing a slight decline [28]. - The average price of white feather broilers was 7.2 CNY/kg, which increased, and the profit for white feather broiler farming was 1.03 CNY/chick, also showing an upward trend [32]. - **Aquaculture**: - The average wholesale price for crucian carp was 22.38 CNY/kg, showing a slight decline, while the average price for carp was 15.69 CNY/kg, which increased [34]. Company Insights - The report highlights several companies to watch, including: - Muyuan Foods (002714), noted for its cost, scale, and integration advantages in pig farming [48]. - Haida Group (002311), recognized as a leading feed company with expected market share growth [48]. - Shennong Development (002299), a leader in the white feather broiler industry with advantages in breeding and food business expansion [48]. - Reap Bio (300119), a leader in the animal health industry with a growing product matrix for pet health [48]. - Zhongchong Co. (002891), a top player in the pet food sector with strong domestic growth and recovering export business [48].