Investment Rating - The report maintains a positive outlook on the pet food industry, indicating a "Buy" recommendation for companies like Guobao Pet and Zhongchong Co., while suggesting to pay attention to Peidi Co. and Lusi Co. [2][4] Core Insights - The pet food industry in China is experiencing a long-term favorable trend, with short-term acceleration expected. The support from channel partners for leading brands is increasing, and product homogenization is becoming more pronounced. The industry is likely entering a phase of accelerated concentration, benefiting leading publicly listed pet food companies [3][4][5] Summary by Sections 1. Sales Performance During 2025 "618" Shopping Festival - The pet food sector maintained high growth during the 2025 "618" shopping festival, with total online sales reaching 7.5 billion yuan, a year-on-year increase of 36% [3][19] - Domestic brands have further increased their market share, accounting for 65% of the top 20 pet brands on Tmall, up from 55% in 2022 [3][27] - The competitive landscape is stabilizing, with no new brands entering the top ten during the 2025 "618" sales [5][28] 2. Performance of Listed Companies - Guobao Pet's brand Maifudi remains a leader, ranking No. 2 in Tmall's pet brand category during the 2025 "618" festival [3][4] - Zhongchong Co. saw improvements in rankings for its brands, with Wanpi making significant progress [3][4] - Peidi Co.'s brand Jueyan achieved a total GMV of 38 million yuan during the festival, reflecting a year-on-year growth of 52% [3][4] 3. Industry Trends - Long-term trends indicate that the "declining birthrate" is driving an increase in pet ownership, particularly among the "post-00s" demographic [3][4] - The market is witnessing a simultaneous rise in domestic brand replacement and consumption upgrades, with domestic brands' market share accelerating from 2020 to 2024 [3][4] - Short-term indicators show an upward trend in industry prosperity, with a combined GMV growth rate of 16.8% across major platforms from January to May 2025 [3][4] 4. Consumer Behavior and Preferences - There is a growing trend towards pet health products and prescription food, with prescription food sales for cats and dogs increasing by 60% year-on-year [3][4][36] - The top brands in the pet food category are increasingly focusing on health-oriented products, indicating a shift in consumer preferences [3][4][36]

Group 1 - The core viewpoint of CITIC Securities is that the revaluation of bank net assets by investors is an intrinsic driver for the upward valuation of the banking industry in 2025 [1] - According to the report, the overall recovery of institutional investor allocation in 2024 is indicated by the significant increase in the scale of passive funds and the steady increase in active fund holdings in bank stocks [1] - The report highlights that the demand for stable return equity assets from insurance funds continues, suggesting that there is still room for institutional allocation in bank stocks [1] Group 2 - According to Open Source Securities, the stock market presents a clear high cost-performance ratio, with stock dividend yields being relatively high compared to domestic deposit and bond yields [2] - The bond market is experiencing a flattening yield curve as it anticipates increased monetary easing in the second half of the year, with a bullish sentiment prevailing among bond market participants [2] Group 3 - CITIC Jiantou emphasizes focusing on investment opportunities in the pet sector within the agricultural industry, noting that the pet food segment still possesses high growth potential due to total expansion and structural optimization [3] - The report mentions that domestic brands in the pet sector are expected to have considerable long-term growth space, driven by the trend of domestic substitution [3] - Companies with forward-looking overseas production capacity, particularly in North America, are likely to avoid negative impacts from uncertain tariff policies and may even benefit from them [3]

Summary of Conference Call Records Industry Overview - The conference call primarily discusses the **agriculture sector**, focusing on **swine farming**, **aquaculture**, and **pet food industries** [1][2][3][4]. Key Points and Arguments Swine Farming Sector - The swine farming sector's priority has increased due to **fund allocation** and **valuation considerations**. The optimization of production capacity is expected to be the main theme, with an upward revision of market conditions anticipated for 2026 and beyond [1][3][4]. - In Q1 2025, there was significant **supply pressure** in the swine industry, leading to low price fluctuations. However, a decrease in feed prices improved farming profits, with net profits for self-bred pigs at **77.82 CNY per head**, a significant improvement from a loss of **96 CNY per head** in the previous year [1][5]. - The **number of piglets** increased by **16.33%** year-on-year, but the survival rate for fattening pigs remained stable, raising concerns about potential oversupply risks [1][6]. - The concentration of the top three companies in the swine sector reached **16.84%** in 2024, with Muyuan exceeding **10%**. The average debt-to-asset ratio for the swine farming sector was **56%**, down **4.2%** year-on-year, indicating ongoing financial pressure [1][8]. - As of April 2025, the number of breeding sows was **40.38 million**, showing a **1.3%** year-on-year increase, but still within a reasonable range for production capacity control [1][9]. Aquaculture Sector - The aquaculture sector is performing well, with prices for common fish species like grass carp and crucian carp rising due to reduced supply following previous years of losses. Specific species like **California bass** and **yellow catfish** are experiencing strong price performance [11]. - The **South American white shrimp** market has seen prices drop to their lowest for the year, but a recovery is expected towards the end of the year [11]. - Overall, the aquaculture sector is witnessing improved profitability, leading to increased feed demand, which is projected to grow year-on-year [11][12]. Pet Food Industry - The pet food market has shown significant growth, with exports increasing despite a **5%** decline in exports to the U.S. due to trade policy uncertainties. However, exports to Southeast Asia have surged by **51%** [13]. - The domestic market for pet food is also growing, with online sales showing double-digit growth, indicating a trend of consumption upgrade [13][14]. - The market concentration for pet food brands has increased, with the top 10 brands holding **36.56%** of the market share, reflecting a rise in both sales volume and prices [14]. Future Trends and Investment Directions - The swine industry is expected to maintain low prices in the second half of 2025 due to ample supply, with piglet prices also likely to fluctuate more significantly [7][10]. - Investment focus should be on low-cost, high-quality pig farming companies such as Muyuan and Wens Foodstuffs, as well as feed companies like Haida Group [16]. - In the pet sector, companies with strong product innovation and brand upgrade potential should be prioritized, alongside those capable of resource integration in the pet medical field [17]. Additional Important Insights - The overall agricultural sector performed well in the first half of 2025, particularly in consumer growth areas like pet consumption and aquaculture, with some companies exceeding expectations [2]. - The differentiation and increased trading density in the new consumption sector warrant a reevaluation of valuation levels across different segments [2][4].

Group 1 - The core point of the news is that the snack giant Three Squirrels is re-entering the pet food market by establishing a subsidiary named "Anhui E Le Ge Miao Pet Food Co., Ltd." with a registered capital of 5 million RMB, focusing on pet food and related services [2][3]. - Three Squirrels previously attempted to enter the pet industry in 2020 with the brand "Yang Le Ge Mao Hai," but exited due to strategic adjustments. Now, with recovering performance, the company is investing heavily to launch a new brand "Jin Pai Nai Ba," targeting the pet food sector [3][4]. - The pet economy in China is rapidly growing, with the industry scale reaching 592.8 billion RMB in 2023 and expected to exceed 1 trillion RMB by 2028. Pet food accounts for over 50% of this market, with cat food growing faster than dog food, indicating significant opportunities for new brands [3][4]. Group 2 - The pet food market is highly competitive, with traditional brands and new entrants from various food companies. Three Squirrels has advantages in supply chain and online sales experience, but faces challenges in gaining consumer trust in pet nutrition [4][5]. - The previous attempt with "Yang Le Ge Mao Hai" achieved sales of over 2.5 million RMB during the 2020 Double Eleven shopping festival, but was ultimately transferred due to strategic changes. The success of "Jin Pai Nai Ba" remains uncertain in the saturated market [4][5]. - Three Squirrels is also diversifying into other sectors such as alcohol, prepared dishes, and daily chemicals, aiming to create a "full-category consumption ecosystem." The success of this diversification strategy is yet to be tested in the market [4][5].

农林牧渔 分析师：张蔓梓 登记编码：S0730522110001 zhangmz@ccnew.com 13681931564 畜禽价格低迷，宠物食品 618 消费表 现亮眼 ——农林牧渔行业月报 证券研究报告-行业月报 强于大市(维持) 盈利预测和投资评级 | 公司简称 | 24EPS 25EPS | | 25PE | 评级 | | --- | --- | --- | --- | --- | | 牧原股份 | 3.30 | 3.76 | 10.26 | 增持 | | 普莱柯 | 0.27 | 0.52 | 26.60 | 增持 | | 秋乐种业 | 0.31 | 0.33 | 58.86 | 增持 | | 乖宝宠物 | 1.56 | 2.03 | 48.59 | 增持 | | 中宠股份 | 1.34 | 1.48 | 36.11 | 增持 | | 佩蒂股份 | 0.75 | 0.91 | 15.46 | 增持 | 农林牧渔相对沪深 300 指数表现 资料来源：Wind，中原证券研究所 -15% -10% -4% 1% 6% 12% 17% 22% 2024.06 2024.10 2025.02 2025.06 ...

Investment Rating - The report maintains an "Overweight" rating for the retail industry [1] Core Insights - The 2025 618 shopping festival has been extended compared to 2024, with simplified discount rules, leading to strong performance from domestic beauty brands [3][8] - Tmall's overall GMV (Gross Merchandise Volume) during the 618 festival is expected to grow by 10% year-on-year, marking the highest quality growth in three years, with total e-commerce sales reaching 855.6 billion yuan, a 15.2% increase [3][9] - The beauty sector on Tmall is projected to see a year-on-year growth of 11.1%, accounting for 41.3% of the overall market [3][9] - Key domestic brands like Proya and Han Shu have secured top positions on Tmall and Douyin, while international brands are also regaining market share [3][9][11] - The pet food segment continues to show high growth, with significant increases in sales for various pet food categories [3][12] Summary by Sections Industry Trends - The 2025 618 shopping festival features a more refined promotional timeline, with a focus on simplified discount rules and stable promotional intensity [3][8] Sales Performance - Tmall's beauty sales during the 618 festival are expected to grow by 11.1%, with Proya and Han Shu leading the rankings on Tmall and Douyin respectively [3][9][11] - The overall e-commerce sales during the 618 festival reached 855.6 billion yuan, reflecting a 15.2% year-on-year growth [3][9] Investment Recommendations - The report suggests focusing on companies with upward momentum and new product catalysts, such as Ruoyu Chen, Shangmei Co., Guibao Pet, and Zhongchong Co., as well as those with attractive valuations like Maogeping, Proya, and Juzibio [3][12] Market Review - The report notes a decline in the retail index by 2.75% for the week of June 16-20, 2025, with a year-to-date decline of 7.89% [13][17] Company Valuation Table - The report includes a valuation table for various companies, indicating their market capitalization, closing prices, and projected earnings [19]

Summary of Conference Call Records Industry Overview - The conference call discusses the **pet food** and **swine** industries, focusing on market dynamics, policy impacts, and investment strategies related to these sectors [1][2][3]. Key Points on the Swine Industry - The **National Development and Reform Commission** and the **Ministry of Agriculture and Rural Affairs** have introduced policies aimed at reducing production capacity to boost pig prices and stimulate consumption, similar to the environmental policies of 2015-2016 [1][4]. - Current valuations in the swine sector are low, with recommendations to focus on companies with low costs, low debt ratios, and high growth rates, such as **Muyuan Foods** and **Wens Foodstuff Group** as leading targets, along with **Shennong Group** and **Juxing Agriculture** as secondary targets [1][5]. - The swine sector is at a turning point in both fundamentals and policies, with expectations of increased market pressure from the scale of pig output and secondary fattening practices [2]. - Historical context shows that the swine industry experienced a 25% reduction in production capacity during the 2015-2016 environmental policy period, and current policies are shifting back to capacity constraints to enhance consumption [3]. Key Points on the Pet Food Industry - By 2025, the pet food market is expected to see a rise in domestic brands, with **Xianlang** and **Mafudi** leading the market, while foreign brands like **Royal Canin** and **Natural Balance** still hold significant market shares [1][7]. - High-end product lines in the pet food market, such as baked and dehydrated foods, are growing rapidly, with **Fleegat** showing exceptional performance [1][9]. - Consumer preferences are shifting towards precise feeding functions, allowing domestic brands to compete effectively against foreign brands due to better cost-performance ratios [1][9]. - Data from **JD.com** indicates that **Royal Canin** and **Mafudi** lead in both cat and dog food markets, with other brands like **Netease Yanxuan** and **Fleegat** also performing well [1][9]. - The market is witnessing a trend towards high-end products, with significant growth in premium offerings compared to traditional puffed foods [9]. Additional Insights - Companies attempting to enter the pet food market, such as **Three Squirrels** and **Yili**, have struggled due to a lack of understanding of consumer needs and the inherent differences between human and pet food [3][11]. - Consumer behavior during the **618 shopping festival** showed a shift towards rational consumption, with increased focus on precise feeding and higher expectations for product formulations [12]. - The overall performance of leading companies in the pet food sector is expected to remain strong, with high-end products contributing significantly to revenue growth [10][12].

Market Overview - The A-share market shows a mixed performance with the Shanghai Composite Index closing at 3359.90, down 0.07%, while the Shenzhen Component Index fell by 0.47% to 10005.03 [2][3] - The overall market capitalization of the Shanghai Composite Index is 6531.38 billion, with a price-to-earnings (PE) ratio of 12.03 and a price-to-book (PB) ratio of 1.25 [3] Financial Insights - The report indicates that the overall A-share market is experiencing a downward trend, with the total market turnover reaching 1091.74 billion, a decrease of 189.15 billion from the previous trading day [7] - The TTM PE ratio for the Shanghai Composite Index is 14.64, which is in the 31.7% historical percentile, while the TTM PE for the ChiNext Index is significantly higher at 30.38, in the 10.15% historical percentile [7] Industry Dynamics - The pet food export value in May increased by 12.81% month-on-month, indicating a positive trend in the pet food sector [48] - The Chinese gaming market saw a recovery in May, with a total revenue of 28.051 billion, reflecting a year-on-year growth of 9.86% [41] - The engineering machinery export maintained a robust growth rate, with a total export value of 50.24 billion in May, up 8.51% year-on-year [44] Company Highlights - Petty Co. reported a GMV of over 38 million during the 618 shopping festival, marking a 52% increase year-on-year, with significant growth in both new and returning customer segments [55] - Chongde Technology has entered a strategic partnership with GE Vernova, securing an order worth 7 million for synchronous phase camera bearings, which will be delivered by February 2026 [57] - Shanghai Superconductor's IPO application has been accepted, aiming to raise 1.2 billion for the production of high-temperature superconducting materials [54]

Investment Rating - The report maintains a "Positive" outlook on the agriculture, forestry, animal husbandry, and fishery sector, indicating it is expected to outperform the overall market [4][5][52]. Core Insights - The report highlights the strong performance of the pig farming sector, with expectations for a re-evaluation of pig prices due to ongoing market dynamics. It emphasizes the importance of quality pig farming enterprises and suggests focusing on the profitability of breeding support and pet food sectors [4][5]. - During the "618" shopping festival, the pet food industry showed resilience, with leading brands performing well. The report suggests that the performance of top companies may exceed expectations throughout the year [4][5]. - The report notes that pig prices have consistently outperformed market expectations since the beginning of 2025, with futures prices remaining lower than spot prices. It anticipates a slow recovery in production capacity and highlights the potential for profit realization in low-cost pig farming [4][5]. Summary by Sections Market Performance - The Shenwan Agriculture, Forestry, Animal Husbandry, and Fishery Index fell by 3.1%, while the CSI 300 Index decreased by 0.5%. The top five gainers included Bangji Technology (up 24.7%) and Chenguang Biotech (up 13.4%), while the top five losers included Andeli (down 18.7%) and Zhongchong Co. (down 13.4%) [4][5][12]. Pig Farming - As of June 22, the average selling price of external three yuan pigs was 14.29 yuan/kg, with a week-on-week increase of 1.2%. The report indicates that the average weight of market pigs decreased to 128.28 kg, down 0.54 kg from the previous week. The report suggests that the expectations of "reducing weight, stabilizing production capacity, and limiting breeding" may lead to a re-evaluation of pig prices in the second half of the year [4][5]. Poultry Farming - The report notes a significant drop in chick prices, with the average price of white feather broiler chicks at 1.72 yuan/chick, down 29.2% week-on-week. The average price of white feather broilers remained stable at 3.52 yuan/kg, with a slight decrease of 1.7% week-on-week [4][5]. Pet Food - The report emphasizes the importance of monitoring the sales performance of pet food during the "618" shopping festival, with a year-on-year increase of 15% in e-commerce sales. The total sales for pet food reached 7.5 billion yuan, up from 5.5 billion yuan in the previous year, indicating a year-on-year growth of 36% [4][5]. Animal Health - The report highlights the recovery in vaccine sales, with a year-on-year increase of 23.02% in the number of veterinary vaccine batches issued in Q1 2025. It suggests that the profitability of breeding enterprises will drive the demand for vaccines and other products [4][5].

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].