Core Insights - The animal health sector experienced a rise of 2.65% on November 13, with BioShares leading the gains [1] - The Shanghai Composite Index closed at 4029.5, up 0.73%, while the Shenzhen Component Index closed at 13476.52, up 1.78% [1] Stock Performance - BioShares (600201) closed at 11.74, with a significant increase of 9.11% and a trading volume of 1.153 million shares, amounting to a turnover of 1.3 billion yuan [1] - Other notable performers included *ST Green Health (002868) with a 5.00% increase, and Haili Biological (603718) with a 1.72% increase [1] - The overall trading volume and turnover for the animal health sector showed varied performance among individual stocks [1][2] Capital Flow - The animal health sector saw a net outflow of 32.7945 million yuan from institutional investors, while retail investors contributed a net inflow of 22.6275 million yuan [2][3] - The capital flow analysis indicates that while institutional investors withdrew funds, retail investors were more active in purchasing shares [2][3] Individual Stock Capital Flow - BioShares (600201) had a net inflow of 26.5431 million yuan from institutional investors, while retail investors showed a net outflow of 51.2945 million yuan [3] - *ST Green Health (002868) experienced a net inflow of 6.8361 million yuan from institutional investors, but a net outflow from retail investors [3] - The capital flow data highlights the contrasting behaviors of different investor types within the sector [3]

Core Insights - The animal health sector experienced a slight increase of 0.14% on November 12, with *ST Lvkang leading the gains [1] - The Shanghai Composite Index closed at 4000.14, down 0.07%, while the Shenzhen Component Index closed at 13240.62, down 0.36% [1] Stock Performance Summary - *ST Lvkang (002868) closed at 36.77, up 5.00% with a trading volume of 62,400 shares and a transaction value of 226 million [1] - Other notable performers included: - Qudongli (920275) at 10.76, up 3.86% [1] - Yongshun Biological (920729) at 10.15, up 1.81% [1] - Biological Shares (600201) at 10.76, up 1.22% [1] - Zhongmu Shares (600195) at 7.98, up 0.50% [1] Capital Flow Analysis - The animal health sector saw a net outflow of 35.94 million from institutional investors, while retail investors contributed a net inflow of 20.57 million [2] - The capital flow for individual stocks showed: - KQ Bio (688526) had a net inflow of 7.99 million from institutional investors [3] - Biological Shares (600201) had a net inflow of 6.25 million from institutional investors [3] - However, KQ Bio (688526) also experienced a net outflow of 16.05 million from retail investors [3]

Core Insights - The animal health sector experienced a 1.04% increase on November 11, with *ST Lvkang leading the gains [1] - The Shanghai Composite Index closed at 4002.76, down 0.39%, while the Shenzhen Component Index closed at 13289.0, down 1.03% [1] Stock Performance - *ST Lvkang (002868) closed at 35.02, up 5.01% with a trading volume of 1196 lots and a transaction value of 4.1884 million yuan [1] - Other notable performers included: - Qudongli (920275) at 10.36, up 4.65% [1] - Yongshun Biological (920729) at 9.97, up 2.15% [1] - Biological Shares (600201) at 10.63, up 1.24% [1] - Plai Ke (603566) at 14.42, up 1.19% [1] Capital Flow - The animal health sector saw a net outflow of 2.5437 million yuan from institutional investors and 7.7575 million yuan from speculative funds, while retail investors had a net inflow of 10.3012 million yuan [1] - Specific stock capital flows included: - Biological Shares (600201) with a net inflow of over 9.2092 million yuan from institutional investors [2] - *ST Lvkang (002868) had a net inflow of 1.1031 million yuan from retail investors [2] - Huayi Biological (603718) experienced a net outflow of 4.1338 million yuan from institutional investors [2]

Investment Rating - The report maintains a "positive" outlook on the agricultural, forestry, animal husbandry, and fishery sectors, with specific attention to the potential for value reassessment in leading pig farming companies [2][3]. Core Insights - The agricultural sector's net profit for the first three quarters of 2025 increased by 11% year-on-year, with five sub-sectors showing profit growth, including animal health (+96%) and agricultural processing (+50%) [11][12]. - The pig farming industry is experiencing significant challenges, with a notable decline in pig prices leading to widespread losses among companies, although some are still managing to maintain profitability due to cost advantages [3][19]. - The pet food sector continues to show strong domestic sales growth, while exports are negatively impacted by increased tariffs, highlighting a divergence in performance between domestic and international markets [3][6]. Summary by Sections 1. Agricultural Sector Overview - The agricultural sector's net profit for Q1-Q3 2025 reached CNY 369.4 billion, reflecting an 11% increase year-on-year, with most sub-sectors reporting profit growth [11][12]. - In Q3 2025, the sector's net profit dropped by 58% year-on-year, with significant declines in the feed and breeding industries [13][14]. 2. Key Sub-Sectors Performance 2.1 Pig Farming - The pig farming sector saw a 30% increase in the number of pigs slaughtered in the first three quarters of 2025, but Q3 prices fell sharply, leading to a 68.4% drop in net profit for the quarter [21][16]. - The average profit per pig for self-breeding operations was approximately CNY 60 per head, but this dropped to CNY 43 in Q3, indicating a significant decline in profitability [32][33]. 2.2 Chicken Farming - The white feather chicken segment is facing price declines, but downstream companies are seeing profit recovery due to improved cost structures [53][59]. - The yellow feather chicken segment is experiencing a significant downturn, with profits down by 75.2% year-on-year for the two listed companies in this category [3][59]. 2.3 Pet Food - The domestic pet food market remains robust, with a 17.7% increase in revenue for the first three quarters of 2025, while exports to the U.S. fell by 25.6% due to tariffs [3][6]. - Leading domestic brands are gaining market share, with significant growth in online sales [5][6]. 2.4 Animal Health - The animal health sector reported a 70.2% increase in net profit, driven by high livestock inventory levels and the introduction of new products [4][3].

Core Insights - The pet healthcare sector is emerging as a new consumption track within the "it economy" due to the growing pet ownership and increasing demand for pet health management [1] Industry Overview - The eighth China International Import Expo showcased significant advancements in animal healthcare products, with major multinational companies like Merck and Boehringer Ingelheim presenting their core innovations [1] - Merck focuses on smart products that collect physiological data from animals through collars and ear tags, providing precise decision-making support for farms [1] - Boehringer Ingelheim introduced several innovative animal healthcare drugs and solutions aimed at preventing key diseases in companion and economic animals [1] Company Landscape - As of November 10, there are 3,302 existing animal healthcare-related companies in China [1] - A significant portion of these companies are well-established, with 43.12% having been in operation for over 10 years, while 33.90% have been operating for 5 to 10 years [1] - In terms of registration, 121 animal healthcare-related companies were registered in 2024, with 83 registered so far this year [1]

Investment Rating - The report maintains a "Positive" outlook on the agricultural, forestry, animal husbandry, and fishery industry for the third quarter of 2025 [2] Core Insights - The agricultural, forestry, animal husbandry, and fishery sector's net profit increased by 11% year-on-year in the first three quarters of 2025, with five sub-industries showing profit growth [16][17] - The overall performance of the sector declined in Q3 2025, with a 58% year-on-year drop in net profit, primarily due to significant losses in the breeding industry [18][19] - The pig farming sector faced a downturn with falling prices and a return to industry-wide losses, while the poultry sector showed mixed results with white feathered chickens stabilizing and yellow feathered chickens experiencing a significant decline [22][58] - The pet food segment continues to thrive domestically, although exports have been negatively impacted by increased tariffs [22][58] - The animal health sector benefited from high livestock inventory levels, leading to substantial revenue growth for companies in this space [22][58] Summary by Sections 1. Overview of Agricultural, Forestry, Animal Husbandry, and Fishery Sector - The sector's net profit for Q1-Q3 2025 reached 369.4 billion, marking an 11% increase year-on-year [16] - In Q3 2025, the sector's net profit was 95.9 billion, reflecting a 58% decrease year-on-year and a 27% decrease quarter-on-quarter [18] 2. Key Sub-Industry Performance 2.1 Pig Farming - The pig farming sector's revenue for Q1-Q3 2025 was 3036.4 billion, with a 9.9% year-on-year increase, but Q3 saw a significant profit drop of 68.4% [22] - The average profit per head for self-bred pigs was approximately 60 yuan, with significant variations among companies [36][38] 2.2 Poultry Farming - White feathered chicken companies reported a revenue of 243.4 billion in the first three quarters of 2025, with a net profit increase of 104.6% [64] - Yellow feathered chicken prices declined significantly, leading to a challenging market environment [58] 2.3 Pet Food - The pet food sector achieved a revenue of 103.0 billion in the first three quarters of 2025, with a year-on-year growth of 17.7% [22] - Domestic brands are gaining market share, while exports to the U.S. have decreased by 25.6% due to tariffs [22] 2.4 Animal Health - The animal health sector's revenue reached 132.7 billion in Q1-Q3 2025, with a 70.2% increase in net profit [22] - New product launches have contributed to above-average growth for some companies in this sector [22]

Core Insights - The animal health sector experienced a 1.24% increase on November 10, with *ST Lvkang leading the gains [1] - The Shanghai Composite Index closed at 4018.6, up 0.53%, while the Shenzhen Component Index closed at 13427.61, up 0.18% [1] Stock Performance Summary - *ST Lvkang (002868) closed at 33.35, up 5.01% with a trading volume of 5205 lots and a transaction value of 17.34 million yuan [1] - Huisheng Biological (300871) closed at 22.06, up 2.41% with a trading volume of 66,200 lots and a transaction value of 145 million yuan [1] - Zhongmu Co., Ltd. (600195) closed at 7.91, up 2.06% with a trading volume of 163,100 lots and a transaction value of 129 million yuan [1] - Kexin Biological (688526) closed at 16.31, up 1.56% with a trading volume of 40,300 lots and a transaction value of 6.54 million yuan [1] - Xianfeng Holdings (002141) closed at 3.86, up 1.31% with a trading volume of 171,800 lots and a transaction value of 65.85 million yuan [1] - Jinhai Biological (002688) closed at 6.34, up 1.12% with a trading volume of 153,600 lots and a transaction value of 96.73 million yuan [1] - Ruipu Biological (300119) closed at 20.75, up 1.07% with a trading volume of 58,800 lots and a transaction value of 121 million yuan [1] - Haili Biological (603718) closed at 7.03, up 1.01% with a trading volume of 92,300 lots and a transaction value of 64.67 million yuan [1] - Pulaike (603566) closed at 14.25, up 0.78% with a trading volume of 38,100 lots and a transaction value of 54.15 million yuan [1] - Yongshun Biological (920729) closed at 9.76, up 0.41% with a trading volume of 15,000 lots and a transaction value of 1.46 million yuan [1] Capital Flow Analysis - The animal health sector saw a net outflow of 9.96 million yuan from institutional investors, while retail investors experienced a net outflow of 29.65 million yuan [2] - Speculative funds recorded a net inflow of 39.62 million yuan into the sector [2]

Group 1 - The North Exchange 50 Index and the Specialized and Innovative Index will undergo adjustments on December 15, 2025, with the North Exchange 50 Index experiencing its fourth adjustment and the Specialized and Innovative Index its first adjustment [10][12][15] - The North Exchange 50 Index closed at 1,522.73 points, reflecting a weekly decline of 3.79%, while the Specialized and Innovative Index closed at 2,532.06 points, down 5.43% [31][32] - The report emphasizes the importance of focusing on high-quality stocks and technology growth within the North Exchange 50 components, particularly those that have undergone significant price adjustments [3][42] Group 2 - The report identifies potential new additions to the North Exchange 50 Index, including companies such as Kaifa Technology, Gobika, and Wantong Hydraulic, with a focus on their average market capitalization and trading volume [12][13] - The North Exchange Specialized and Innovative Index is expected to include companies like Star Map Measurement and Senxuan Pharmaceutical, highlighting their market performance and growth potential [15][16] - The report suggests that the North Exchange's valuation structure shows a significant number of companies with high P/E ratios, indicating a potential investment opportunity in undervalued stocks [21][36][41] Group 3 - The report indicates that the average P/E ratio for key sectors such as high-end equipment, information technology, and chemical new materials are 42.83X, 91.31X, and 48.18X respectively, suggesting varying levels of valuation across industries [36][41] - The North Exchange's market performance shows a decline in trading volume, with an average daily turnover of 230.88 billion yuan, down 20.36% from the previous week [26][30] - The report highlights the importance of monitoring companies with strong quarterly performance and reasonable valuations as the North Exchange approaches its index adjustments [42][43]

Core Insights - Merck Animal Health showcased its integrated solutions for animal health at the 2025 China International Import Expo, emphasizing the "One Health" concept [2] - The company aims to enhance local R&D and production capabilities in China, with approximately 50 vaccines and chemical products already launched in the market [2] - The recent launch of two new vaccines for swine, aimed at addressing significant economic diseases in China's pig farming industry, is expected to improve herd health and farming efficiency [3] Group 1 - Merck Animal Health presented a comprehensive portfolio covering companion animals, aquaculture, pigs, poultry, and ruminants, integrating vaccines, pharmaceuticals, and technological solutions [2] - The company operates its China headquarters in Shanghai, with production bases in Ningbo and Tianjin, and a research center in Ningbo [2] - The newly approved vaccines, including the first needle-free intradermal vaccine for porcine circovirus, provide innovative solutions for common diseases affecting the swine industry [2][3] Group 2 - The introduction of the new vaccines is expected to help reduce the high costs associated with pig farming in China, which is the world's largest pork market [3] - The company believes that these solutions will contribute to the stability of pork supply and improve the quality of products available to consumers [3]

Core Insights - The eighth China International Import Expo will be held in Shanghai from November 5 to 10, 2025, with Merck participating for the seventh consecutive time, showcasing its animal health business centered around the "One Health" concept [2] - Merck's animal health division emphasizes innovative products and technologies to enhance industry development and integrates social responsibility into its corporate DNA [2] - The company is presenting two new pig vaccines at the expo, aimed at addressing significant economic diseases in China's pig farming industry [4][5] Company Developments - Merck is showcasing the "Baozhuli® Yuan An Ke®" and "Baozhuli® Yuan Le Da®" vaccines, which are designed to provide new solutions for porcine circovirus and Mycoplasma pneumonia infections [2][4] - The introduction of these vaccines is expected to improve pig herd health and farming efficiency in China, the world's largest pig market [5] - In the companion animal sector, Merck is highlighting its "Chongbiwei®" vaccine series and Sure Petcare's smart pet products, aimed at providing efficient and safe solutions for pet healthcare [5] Industry Context - Porcine circovirus type 2 and Mycoplasma pneumonia are major economic diseases affecting China's pig farming, contributing to high breeding costs [4] - Merck's commitment to public health is demonstrated through its partnership with the China Small Animal Protection Association, having donated over 180,000 doses of rabies vaccines since 2016 [5] - The aquaculture segment is also featured at the expo, with Merck presenting a comprehensive product range following its acquisition of the Blue River Animal Health business, which includes vaccines, dewormers, and nutritional supplements [5]