Core Viewpoint - In the current environment, investors need to distinguish between different agricultural investments, specifically "pigs," "grains," or "fertilizers" [4][18]. Group 1: Agricultural Sector Dynamics - The agricultural sector has recently gained attention from public and institutional funds due to ongoing geopolitical conflicts, making it a high-interest area for investment [4]. - Since March 2026, the issuance of agricultural-related ETFs has accelerated, with seven companies filing for agricultural index products in just one week [5]. - As of March 2026, there are 16 listed ETFs tracking the agricultural sector, covering various sub-sectors such as planting, breeding, feed, seed, and agricultural machinery [8]. Group 2: Fund Flows and Performance - Several agricultural ETFs have seen significant net inflows since March, with the Agricultural ETF (159825.SZ) and Grain ETF (159698.SZ) recording net subscriptions of 1.1 billion and 720 million respectively [8]. - The agricultural sector has shown a positive trend, with many products achieving around 4% returns in March and several exceeding 10% returns year-to-date [10]. - The Grain Index has emerged as a strong performer, with its corresponding ETFs returning over 15% year-to-date [29][30]. Group 3: Geopolitical Influences - The escalation of geopolitical risks, particularly the instability in the Middle East since February 2026, has disrupted global commodity markets, impacting agricultural costs and prices [13][14]. - Rising prices of natural gas and crude oil, essential for agricultural fertilizers, are expected to increase agricultural production costs [13]. Group 4: Investment Strategies - Investors are advised to carefully select agricultural ETFs based on their underlying assets, as there are significant differences in the investment logic of these funds [18]. - The largest ETF tracking the Livestock Index (159865.SZ) focuses on the "pig cycle," while comprehensive agricultural ETFs like the Agricultural ETF (159825.SZ) provide broader exposure across various agricultural sectors [20][24]. - Commodity-linked ETFs, such as the Soybean Meal ETF (159985.SZ), are highly correlated with international commodity prices and can respond quickly to supply shocks, but they are also more volatile [33].

1. Report Industry Investment Rating - Not provided in the report 2. Core View of the Report - As of the market conditions on March 13, combining the "Gain - Crowding" quadrant chart and ETF fund flow, the agricultural sector is worthy of continuous attention. The agricultural sector is steadily increasing in holdings, possibly due to capital betting on the price - rising logic. The breeding sector shows a net inflow of funds, and its upward space depends on policy strength. The coal and battery sectors have a net outflow of funds and may experience short - term fluctuations. The chemical sector has a high participation difficulty [1][23]. 3. Summary According to the Directory 3.1 Market Review - From March 9 - 13, the market fluctuated and declined. As of March 13, 2026, the closing price of the Wind All - A Index was 6750.45, a 0.48% decrease from March 6 [6]. - The ChiNext performed better. From March 9 - 13, most major stock indexes pulled back. The ChiNext Index and the Shenzhen Component Index rose by 2.51% and 0.76% respectively, while the Science and Technology Innovation 50 and the CSI 500 fell by 2.88% and 1.44% respectively [9]. - Stock - type ETFs maintained a net outflow. From March 9 - 12, stock - type ETFs had a net outflow of 20.904 billion yuan, with a larger outflow scale compared to March 2 - 5. Among them, broad - based index ETFs had a net outflow of 28.299 billion yuan, industry - index ETFs had a net outflow of 1.364 billion yuan, and theme - index ETFs had a net inflow of 4.807 billion yuan [11][12]. - At the industry level, batteries and coal led the gains. The battery index rose by 8.40%, and its crowding - degree quantile since 2020 rose to 68.6%, an increase of 37.4 percentage points. The coal index rose by 6.60%, and its crowding - degree quantile since 2020 rose 7.50 percentage points to 59.70%. Aerospace and military industry and non - ferrous metals fell significantly, and their crowding degrees declined from high levels. The agricultural and livestock sector rose moderately, with little change in crowding degree. The chemical industry index fell slightly, but its crowding degree increased significantly [15][16]. 3.2 Follow - up Attention - The agricultural sector is steadily increasing in holdings and is a direction for capital to bet on the price - rising logic. The agricultural ETF rose 2.68% this week, with a net inflow of 717 million yuan. It has had a net inflow for 9 consecutive days, with a cumulative 1.095 billion yuan, accounting for 29.48% of its fund scale [23]. - The breeding sector also shows a net inflow of funds, and its upward space depends on policy strength. The breeding ETF rose 1.54% this week, with a net inflow of 447 million yuan. If the policy implementation intensity increases, the price of live pigs may recover, and the sector still has upward space [23]. - The chemical sector has a high participation difficulty. From March 9 - 12, the chemical ETF fell 0.42%, with a net outflow of 557 million yuan. After the Spring Festival, the cashing pressure in the sector increased, and from February 24 to March 13, there was a cumulative net outflow of 1.39 billion yuan. The index crowding degree has risen to a relatively high level since 2020 [24]. - The coal and battery sectors have a net outflow of funds and may experience short - term fluctuations. The battery ETF and the coal ETF rose 8.49% and 6.63% respectively this week, with net outflows of 309 million yuan and 795 million yuan respectively. The battery sector may adjust in the short term, and the subsequent market of the coal sector is greatly affected by the situation in the Middle East [24].

Core Viewpoint - The livestock ETF (159865) has risen over 1.4%, with expectations of continued pig production capacity reduction in the long term, which may drive up the long-term price of pork [1] Group 1: Pig Farming Sector - Long-term low pig prices combined with capacity regulation policies are expected to lead to ongoing industry capacity reduction, potentially pushing the long-term price of pork higher [1] - The current situation indicates that the pig farming sector is undergoing structural changes that may benefit prices in the future [1] Group 2: Poultry Sector - In the poultry sector, the price of white feather chick seedlings has increased due to limited supply post-Spring Festival and active replenishment by farmers; however, the price of broilers remains stable [1] - Restrictions on overseas breeding are likely to lead to a contraction in upstream capacity for white chickens [1] - The egg market is experiencing weak trading post-holiday, with egg prices under pressure; however, the impact of avian influenza abroad is causing disruptions in the import of grandparent stock, leading to a scarcity of quality breeding sources, which may drive prices up in the long term [1] Group 3: Cattle and Dairy Sector - The price of beef cattle remained stable during the Spring Festival, with a gradual reduction in the number of breeding cows expected to lead to a decrease in market supply, anticipating a price increase cycle for beef from 2026 to 2027 [1] - Raw milk prices are currently at the bottom of the cycle, with ongoing capacity reduction expected; as supply contracts, raw milk prices are anticipated to stabilize and recover by 2026 [1] Group 4: Livestock ETF Overview - The livestock ETF (159865) tracks the CSI Livestock Index (930707), which selects listed companies involved in livestock feed, breeding, vaccines, and veterinary drugs from the Shanghai and Shenzhen markets to reflect the overall performance of the livestock industry [1] - This index covers the entire upstream and downstream supply chain of the livestock industry, demonstrating strong industry representativeness [1]

Core Viewpoint - The production capacity of breeding sows is expected to continue to decline until December 2025, remaining at historically high levels with further reduction potential. Pig prices are anticipated to gradually recover in 2026, leading to improved farming profitability. [1] Livestock Industry - The price of broiler chickens has seen a rebound, and farming profits are expected to gradually improve. [1] - The animal health sector should focus on leading companies with strong R&D capabilities and smooth progress in research. [1] Seed Industry - The revitalization of the seed industry is ongoing, aiming to achieve technological self-reliance and independent control over seed sources. [1] Pet Industry - There remains significant growth potential in both domestic and international markets for the pet industry. [1] Investment Products - The Livestock ETF (159865) tracks the China Securities Livestock Index (930707), which selects listed companies involved in livestock feed, breeding, vaccines, and veterinary drugs to reflect the overall performance of the livestock farming industry chain. [1] - This index emphasizes allocation within the agriculture and biotechnology sectors. [1]

Core Viewpoint - The livestock farming index in China shows a strong upward trend, with significant gains in key stocks, indicating a potential recovery in the industry driven by improved profitability and market conditions [1][2]. Group 1: Market Performance - As of January 30, 2026, the China Livestock Farming Index (930707) increased by 1.28%, with notable stock performances including Xiaoming Co. up 14.44%, Dabeinong up 5.66%, and Lihua Co. up 4.15% [1]. - The Livestock ETF (516760) rose by 0.58%, marking its third consecutive increase, with the latest price at 0.69 yuan [1]. Group 2: Price and Profitability Insights - On January 21, 2026, the price of pork was reported at 13.39 yuan/kg, reflecting a 7.9% increase compared to the end of 2025 [1]. - Profit margins for self-breeding and purchased pig farming were 43.35 yuan/head and 115.84 yuan/head, respectively, indicating a turnaround in the industry and a potential slowdown in capacity reduction [1]. - The breeding sow inventory at the end of 2025 was 39.61 million heads, down 2.9% year-on-year [1]. Group 3: Future Outlook - China Galaxy Securities predicts that the average annual pork price may show a year-on-year decline, but there could be a rebound during the year influenced by seasonal disease impacts [1]. - The report suggests focusing on leading companies in cost control, those with healthy financials, and reasonably valued firms in the pig farming sector [1]. Group 4: Index Composition - As of December 31, 2025, the top ten weighted stocks in the China Livestock Farming Index included Muyuan Foods, Haida Group, and Wens Foodstuffs, collectively accounting for 67.66% of the index [2].

Group 1 - The core viewpoint indicates that while pig prices are rebounding during the peak season, the extent of the increase has narrowed due to ongoing capacity reduction in the pig farming industry, which is slowing down [1] - The pig farming industry is expected to continue capacity reduction under the pressures of rising epidemic risks and policy constraints [1] - The white chicken industry has a high capacity level, suggesting that chicken prices may continue to fluctuate in the medium term, while the yellow chicken industry is at historically low capacity levels, potentially leading to price increases [1] Group 2 - In the animal health sector, core antibiotic prices have recently experienced high-level fluctuations [1] - In the planting industry chain, grain prices of various types have recently increased, and are expected to trend upward in the medium term due to domestic and international factors, which will also support seed price increases [1] - The livestock ETF (159865) tracks the China Securities Livestock Index (930707), which selects listed companies involved in livestock farming, feed processing, and veterinary medicine to reflect the overall performance of the livestock industry [1]

Core Viewpoint - The livestock ETF (159865) has risen over 1.1%, indicating improvements in industry supply and demand as well as profitability [1] Group 1: Industry Trends - Most upstream raw material prices are at cyclical lows, while large-scale livestock farming is showing structural local recovery, leading to an overall rebound in the feed industry [1] - The pig farming industry has entered a phase of losses again, prompting a market-driven capacity reduction, which is further supported by policies aimed at reducing internal competition in the pig industry [1] - Domestic breeding sow inventory, after a slow decline in previous months, is now showing a trend of accelerated reduction [1] Group 2: Market Outlook - The pig farming industry is expected to maintain a trend of capacity reduction during the off-season for pig prices in the first half of the year, which may lead to a recovery in the fundamentals and valuations of the industry [1] - The penetration rate of pet ownership in China is expected to continue increasing, with pet food remaining a relatively growth-oriented segment among various consumer industries [1] Group 3: ETF and Index Information - The livestock ETF (159865) tracks the CSI Livestock Index (930707), which selects listed companies involved in livestock farming, feed processing, and veterinary vaccines to reflect the overall performance of related securities [1] - The constituent stocks cover the entire upstream and downstream industry chain of livestock farming, providing strong industry representation [1]

Report Industry Investment Rating - There is no information provided regarding the industry investment rating in the report. Core Viewpoints - The Financial Street Securities Research Institute constructed a strategy portfolio based on industry and theme ETFs, referring to two strategy reports published in 2024 [1]. - From December 22 - 26, 2025, the strategy's cumulative net return was about 4.34%, and the excess return relative to the CSI 300 ETF was about 2.29%. From October 14, 2024, to the present, the strategy's out - of - sample cumulative return was about 32.21%, and the cumulative excess relative to the CSI 300 ETF was about 8.98% [2]. - In the week of December 29, 2025, the model recommended allocating to sectors such as securities, industrial metals, and precious metals. The strategy will newly hold products like Securities ETF Leader, Mining ETF, Gold Stocks ETF, and Communication ETF, and continue to hold products such as Power Grid Equipment ETF and Battery ETF [11]. Summary by Relevant Catalogs ETFs Information - The report lists information about multiple ETFs, including their fund codes, names, market values, holding situations, heavy - held Shenwan industries and weights, as well as weekly and daily timing signals. For example, Securities ETF Leader has a market value of 41.14 billion yuan, is being调入, and has 100% in the securities industry, with a weekly timing signal of - 1 and a daily timing signal of 1 [2]. Performance Tracking - In the period from December 22 - 26, 2025, the strategy's cumulative net return was about 4.34%, and the excess return relative to the CSI 300 ETF was about 2.29%. From October 14, 2024, to the present, the strategy's out - of - sample cumulative return was about 32.21%, and the cumulative excess relative to the CSI 300 ETF was about 8.98% [2]. Portfolio Adjustment - In the week of December 29, 2025, some ETFs were newly added, some continued to be held, and some were removed. For instance, Securities ETF Leader, Mining ETF, Gold Stocks ETF, and Communication ETF were newly added; Power Grid Equipment ETF and Battery ETF continued to be held; while Real Estate ETF, etc., were removed [2][11].

Market Performance - The Shanghai Composite Index rose by 0.53%, the Shenzhen Component Index increased by 0.88%, the ChiNext Index gained 0.77%, and the Northbound 50 Index was up by 0.39% [1] - The total market turnover was 1,897.2 billion yuan, a decrease of 24.1 billion yuan compared to the previous day [1] Sector Performance - The power and commercial aerospace sectors were active, while the precious metals and Hainan sectors experienced adjustments [1] - The commercial aerospace sector rebounded, with several ETFs such as the招商基金卫星产业ETF, 广发卫星ETF, 富国基金卫星ETF, and 永赢基金卫星ETF all rising over 5% [1] ETF Performance - In the ETF market, the mini-sized Hong Kong stock ETFs saw significant gains, with the国泰基金港股通50ETF hitting the daily limit, and the广发基金恒生ETF港股通 and 易方达基金港股通100ETF rising by 3.75% and 3.24% respectively, with latest premium/discount rates of 10.48%, 3.92%, and 4.32% [1] - The agricultural sector saw declines, with畜牧ETF, 农业ETF易方达, and 养殖ETF all dropping by 1% [1] - The Hong Kong innovative drug ETFs expanded their afternoon losses, with the 恒生生物科技ETF鹏华 down by 0.95% [1]

Group 1 - The swine sector is expected to continue capacity reduction due to industry losses and policy guidance, with current valuations at historically low levels [1] - In the broiler chicken sector, prices may have bottomed out due to seasonal consumption increases, and limited willingness to invest in breeding may further tighten supply, supporting future price elasticity [1] - The egg-laying chicken industry is facing a significant reduction in domestic breeding volume by 2025 due to overseas avian influenza bans, leading to a shift from loose to tight supply, with leading companies likely to release performance elasticity due to high market share [1] Group 2 - The beef sector has entered an upward price channel due to previous deep capacity reductions and stricter import regulations, with domestic beef prices potentially rising more than expected [1] - The aquaculture and feed industries have seen significant exits of small and medium enterprises after a low point, improving breeding profits year-on-year, with expectations of continued prosperity for various aquaculture feeds next year [1] - Feed companies are enhancing market share through hedging and R&D advantages amid raw material fluctuations, successfully expanding into overseas markets [1] Group 3 - In the animal health sector, competition in traditional poultry vaccines is intense, while the pet health market is expanding due to aging demographics, with domestic major products driving the replacement process [1] - The Livestock ETF (159865) tracks the China Securities Livestock Index (930707), which selects listed companies involved in livestock breeding, feed processing, and animal health to reflect the overall performance of the livestock breeding industry chain [1] - The constituent stocks cover the entire industry chain from upstream feed production to downstream breeding [1]