Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **agriculture industry**, focusing on **animal protein sectors** such as **pig farming**, **dairy farming**, and **beef cattle farming** [1][2][34]. Core Insights and Arguments Pig Farming - The **pig farming cycle** is driven by production capacity, with the number of breeding sows being a critical leading indicator. This needs to be cross-verified with data on sow feed sales [1][2]. - The **African swine fever** has normalized, raising the industry's cost base, which affects the peak and elasticity of the cycle [1][4]. - **Scale farming** may extend the pig cycle and amplify price fluctuations. Secondary fattening increases price disturbances, influenced by short-term price expectations [1][5]. - The **反内卷 (anti-involution) policy** aims to reduce the number of breeding sows and lower slaughter weights to support pig prices [1][11]. - The average price of pigs is expected to rise to over **16 RMB per kilogram** by **2026**, with **牧原股份 (Muyuan Food)** potentially achieving a profit of nearly **500 RMB per head** [1][14]. Dairy Farming - The dairy industry faces challenges due to falling milk prices, currently around **3 RMB per kilogram**, down from **4.5 RMB**. However, there is potential for demand improvement due to increased willingness to have children and government subsidies for newborns [1][17]. - The beef cattle sector has a long growth cycle and is heavily reliant on imports, with significant industry clearing observed [1][18][20]. Market Dynamics - The **white chicken farming** sector is significantly impacted by overseas breeding policies, with potential for market share growth for **圣农 (Sannong)** during periods of import disruption [3][25]. - The **seafood feed** segment is expected to improve due to rising prices of common aquatic products, with **海大集团 (Haida Group)** showing strong performance in this area [3][27]. Other Important Insights - The **agricultural new consumption trends** include rapid growth in pet food and pet healthcare sectors, indicating new growth potential beyond traditional areas [6][34]. - The **agricultural input products** like feed and veterinary products serve as lagging indicators in the animal protein supply chain, aiding in capacity data assessment [7][34]. - The **grain security** theme is increasingly important, with policies and market dynamics needing close attention [8][30]. Investment Recommendations - Focus on core assets like **牧原 (Muyuan)** and **温氏 (Wens Food)**, which have strong cost control and are less affected by the anti-involution policy [12][13]. - The **港股 (Hong Kong stock market)** upstream livestock companies are currently in a challenging phase but are expected to improve by **2026** as the new cycle begins [22]. - **海大集团 (Haida Group)** is recommended for its strong market position and growth potential in both domestic and international markets [27]. Future Trends - The pig farming sector is expected to benefit from the anti-involution policy, leading to a new upward price cycle in **2026** [15][34]. - The **meat cattle industry** is facing significant challenges, including price declines and industry losses, with a low degree of scale [20][21]. This summary encapsulates the key points discussed in the conference call, providing insights into the current state and future outlook of the agriculture industry, particularly in the animal protein sectors.

Core Insights - The company reported a revenue of 58.831 billion yuan for the first half of 2025, representing a year-on-year increase of 12.50%, and a net profit attributable to shareholders of 2.639 billion yuan, up 24.16% year-on-year [1] Group 1: Feed Sales Performance - The company achieved a feed sales volume of 14.7 million tons in the first half of 2025, a year-on-year growth of 25%, with external sales nearing the annual target [2] - The breakdown of external sales includes 7.3 million tons of poultry feed, 3.4 million tons of pig feed, and 2.8 million tons of aquatic feed, with respective year-on-year growth rates of 24%, 43%, and 16% [2] - The overseas feed sales increased by 40% year-on-year, with an overseas gross margin of 15.08%, up 2.54 percentage points from the same period last year [2] Group 2: Seed and Animal Health Business - The seed business generated revenue of 770 million yuan in the first half of 2025, maintaining a competitive edge in shrimp seed and expanding into tilapia varieties [3] - The animal health business achieved revenue of 460 million yuan, introducing innovative products to optimize feed product structure [3] Group 3: Operational Strategy and Profitability - The company employs a light-asset operation model in pig farming, focusing on purchasing piglets and collaborating with family farms to hedge risks and optimize costs, contributing significantly to profitability [3] - In aquaculture, the company has seen a notable decrease in farming costs due to industrialized shrimp farming and professional management [3] - The gross margin for agricultural product sales reached 20.26% in the first half of 2025 [3] Group 4: Future Outlook and Financial Projections - The company aims to steadily increase capacity utilization in the domestic market while actively expanding in overseas markets, targeting a strategic goal of 51.5 million tons by 2030 [2] - Projected net profits for 2025-2027 are 5.073 billion, 5.786 billion, and 6.581 billion yuan, with EPS of 3.05, 3.48, and 3.96 yuan, and PE ratios of 18, 16, and 14 times respectively [3]

Core Insights - The company Jinhe Biology (002688) reported a significant increase in revenue and net profit for the first half of 2025, with revenue reaching 1.39 billion yuan, a year-on-year growth of 30.45%, and a net profit of 138 million yuan, up 51.52% [1][1][1] - The favorable trend in the downstream pig farming industry continues to drive demand for upstream animal health products, although competition in the animal health industry remains intense [1][1][1] - The company has strategically focused on product structure and competitive advantages, emphasizing continuous research and innovation, as well as lean management internally and market orientation externally, leading to substantial growth in operating performance [1][1][1]

Core Viewpoint - Green Kang Biochemical is undergoing a significant asset restructuring by transferring its photovoltaic film assets to a related party for a total consideration of 0 yuan, indicating a strategic retreat from the photovoltaic sector due to financial burdens [1][2][3]. Group 1: Asset Transfer Details - Green Kang Biochemical announced the sale of 100% equity in three subsidiaries related to photovoltaic film production to Jiangxi Raoxin New Energy Materials Co., Ltd. for 0 yuan, as this transaction is classified as a related party transaction [1][2]. - The acquiring party, Kangyi Investment, is a controlling shareholder of Green Kang Biochemical, with other involved parties being significant shareholders [2]. Group 2: Financial Performance and Challenges - In 2024, Green Kang Biochemical's photovoltaic film revenue reached 231 million yuan, marking a year-on-year increase of 60.89%, accounting for 35.62% of total revenue [3]. - Despite the revenue growth, the gross margin for photovoltaic films was -38.63%, leading to increased losses for the company [3]. - The company anticipates a net loss of 50 million to 65 million yuan for the first half of 2025, representing a reduction in losses compared to the previous year [3].

Financial Performance - The company achieved a revenue of 58.83 billion yuan in the first half of 2025, representing a year-on-year growth of 12.50% [2] - The net profit attributable to shareholders was 2.639 billion yuan, with a significant increase compared to the previous year [2] - Feed sales reached approximately 1.47 million tons, marking a historical high for the same period, with a year-on-year growth of about 25% [2] - Overseas feed sales increased by approximately 40% in the first half of the year [2] Business Operations - The company is implementing a risk-hedging operational model in pig farming, focusing on "purchasing piglets, company + family farms, locking in profits" [2] - In aquaculture, the main species farmed are shrimp and other specialty aquatic products, with a controlled scale for fish farming [2] - The poultry farming and slaughtering business, which was exploratory, recorded losses due to low poultry meat prices in the first half of the year [2] Strategic Goals - The company aims to achieve a total sales volume of 51.5 million tons by 2030, with a focus on increasing domestic capacity utilization and market share [3] - The successful overseas sales growth is attributed to strong product capabilities driven by R&D innovation and a comprehensive service system [3] Industry Outlook - The current market for freshwater fish is favorable, with good profitability; shrimp and crab farming yields stable production [4] - The company plans to continue investing in the core businesses of animal health and seedling production, which are essential for intensive animal farming [4] Investor Engagement - The investor relations activity included a performance briefing attended by various asset management firms, with a total of 157 participants [5][6][7]

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [2] Core Views - The company reported a 12.50% year-on-year increase in revenue for the first half of 2025, reaching 588.31 billion yuan, and a 24.16% increase in net profit, amounting to 2.639 billion yuan [7] - The feed business showed strong growth, with a 14.02% increase in revenue to 471.39 billion yuan in the first half of 2025, driven by increased demand from downstream farming [7] - The company is expanding its overseas market presence, achieving a 40% year-on-year increase in overseas sales [7] - The company is focused on providing integrated solutions for farmers, including feed, seed, and veterinary products, with a positive growth outlook [7] Financial Performance Summary - Revenue projections for 2023A to 2027E are as follows: 116,117 million yuan (2023A), 114,601 million yuan (2024A), 126,830 million yuan (2025E), 140,169 million yuan (2026E), and 154,843 million yuan (2027E) [6][8] - Net profit projections are: 2,741 million yuan (2023A), 4,504 million yuan (2024A), 5,105 million yuan (2025E), 5,648 million yuan (2026E), and 6,190 million yuan (2027E) [6][8] - The company’s EPS is expected to grow from 1.66 yuan in 2023A to 3.72 yuan in 2027E [6][8] - The projected PE ratios are 27.1 (2023A), 18.1 (2024A), 18.0 (2025E), 16.3 (2026E), and 14.8 (2027E) [6][8] Market Performance - The company’s stock performance over the last 12 months shows a decline of 19%, while the benchmark index (CSI 300) has seen a decline of 6% [4]

Investment Rating - The report maintains a "Recommended" rating for the agricultural, forestry, animal husbandry, and fishery industry [1][8][64] Core Viewpoints - The report highlights the long-term value reassessment opportunities in the pig industry, with expectations of price fluctuations in the range of 14-15 CNY/kg post-Chinese New Year 2025, indicating a potential downward trend in prices due to supply pressures [4][15] - The poultry sector is experiencing price declines, with a focus on marginal improvements in the cycle, while the animal health sector is expected to see performance recovery and investment opportunities in the pet medical industry [5][6][28] - The pet economy is thriving, with domestic brands rapidly emerging, and the report anticipates continued improvement in industry profitability [7][58] Summary by Sections 1. Pig Industry - The average price of pigs is currently around 14.6 CNY/kg, with a slight weekly decline [14] - The report recommends companies with low costs and strong financials, specifically highlighting Wens Foodstuffs, Muyuan Foods, and Juxing Agriculture [15][64] 2. Poultry Industry - The report notes a decline in poultry prices, with a focus on the cyclical improvements expected in the future [27] - Recommendations include Shennong Development and Lihua Stock [5][28] 3. Animal Health - The animal health sector is expected to see a recovery in performance, supported by the profitability of the pig farming industry [6][38] - Investment opportunities in the pet medical sector are highlighted, with a market size of approximately 840 billion CNY [7][38] 4. Planting Industry - The report indicates a decrease in wheat and corn prices, with recommendations for companies involved in genetically modified seeds [44][50] 5. Feed Industry - The total industrial feed production in the first half of 2025 reached 15,850 million tons, showing a year-on-year growth of 7.7% [48][50] - Recommendations include Haida Group and attention to He Feng Stock [50] 6. Pet Industry - The pet consumption market is projected to reach 300.2 billion CNY in 2024, with a growth rate of 7.5% [55][58] - Recommended companies in the pet food sector include Guai Bao Pet, Zhongchong Stock, and Petty Stock [58][64]

Investment Rating - The report maintains a "Buy" rating for the agriculture, forestry, animal husbandry, and fishery sector [4] Core Viewpoints - Recent policy guidance has led to a rapid decline in post-slaughter weight, allowing for a rebalancing of volume and price, with positive expectations for pig prices [3] - The long-term perspective indicates that the bottom of the production capacity cycle is becoming clearer, suggesting a potential long-term profit upturn for the sector [3] - The report highlights investment opportunities in various segments, including pig farming, feed, and planting chains, as well as the pet food sector [3] Summary by Sections Pig Farming Sector - In June, 13 listed pig companies collectively slaughtered 16.2681 million pigs, a month-on-month increase of 2.65% and a year-on-year increase of 47.55% [2][13] - The average selling price of pigs decreased by approximately 3% month-on-month and about 20% year-on-year, with prices ranging from 13.23 to 15.57 yuan/kg [14][15] - The average weight of slaughtered pigs in June was 125.06 kg, down 0.77 kg from May, indicating a trend towards reducing weight [17] Market Dynamics - The national average price for live pigs was 14.81 yuan/kg as of July 11, reflecting a week-on-week decline of 3.52% [28] - The demand for pork is weakening due to high temperatures affecting consumption and rising storage costs, leading to a gradual loosening of supply-demand dynamics [28] Investment Recommendations - The report recommends focusing on leading companies such as Muyuan Foods, Wens Foodstuff, and Juxing Agriculture, as well as companies in the feed and animal health sectors like Haida Group and Ruipu Biological [3] - In the planting chain, opportunities are highlighted for companies like Suqian Agricultural Development and Beidahuang [3] Other Segments - The pet food industry is experiencing growth, with increasing recognition of domestic brands and continuous growth of leading companies [3]

Investment Rating - The report maintains a "Recommended" rating for the agriculture, forestry, animal husbandry, and fishery industry [1][61]. Core Views - The report highlights that the pig price may experience a turning point due to seasonal factors and policy changes, suggesting a bottoming out phase for the sector [2][12]. - The poultry sector is seeing price declines, but there are signs of marginal improvements in the cycle [3][24]. - The animal health sector is expected to see performance recovery, and there are investment opportunities in the pet medical industry [4][35]. - The planting sector is witnessing a week-on-week rebound in grain prices [5][43]. - The feed sector is experiencing price fluctuations, with a general downward trend [6][46]. - The pet economy is thriving, with domestic brands gaining strength [7][51]. Summary by Sections Pig Industry - The average pig price is currently fluctuating between 14-15 CNY/kg, with a notable increase in average weights compared to previous years [11][12]. - The report recommends focusing on companies with low costs and strong financial health, such as Wens Foodstuffs, Muyuan Foods, and Juxing Agriculture [12][61]. Poultry Industry - The poultry prices are declining, with the white feather chicken price at 3.48 CNY/jin, showing a slight decrease [24][25]. - The report recommends companies like San Nong Development and Yisheng Livestock, while suggesting to pay attention to He Feng and Minhe Livestock [25][61]. Animal Health - The animal health sector is expected to recover, supported by the profitability of the pig farming industry [35][36]. - The pet medical market is projected to grow, with a market size of approximately 840 billion CNY, representing 28% of the pet industry [4][35]. Planting Sector - Grain prices are showing a week-on-week increase, with corn priced at 2353 CNY/ton and wheat at 2446 CNY/ton [43][44]. - The report suggests focusing on companies involved in genetically modified seeds, such as Suqian Agricultural Development and Longping High-tech [43][61]. Feed Sector - Feed prices are experiencing a downward trend, with pig feed at 3.36 CNY/kg [46][47]. - The report recommends Hai Da Group and suggests paying attention to He Feng [47][61]. Pet Industry - The pet market is expected to reach a scale of 300.2 billion CNY in 2024, with a growth rate of 7.5% [51][52]. - The report recommends companies in the pet food sector like Guobao Pet and Zhongchong Co., and in the pet medical sector, it recommends Ruipu Biological [55][61].

Group 1 - The SW Agricultural, Forestry, Animal Husbandry and Fishery industry rose by 5.02% from January to May 2025, outperforming the CSI 300 index by approximately 7.43 percentage points [13][14] - Most sub-sectors recorded positive returns, with only planting and fishery sectors showing negative returns of -1.58% and -0.07% respectively [14] - Approximately 70% of stocks in the industry achieved positive returns, with three stocks increasing over 100%, the highest being Yizhi Magic Yam at 209.66% [15] Group 2 - The overall PB of the SW Agricultural, Forestry, Animal Husbandry and Fishery industry increased from a low of 2.31 times at the beginning of the year to 2.68 times, with a current PB of approximately 2.66 times as of June 13, 2025, reflecting a 15% recovery from the low [20] - The pig breeding sector is expected to see a gradual recovery in supply, with the number of breeding sows reaching 40.38 million heads by the end of April 2025, slightly above the normal holding capacity [21][23] - The average price of pigs as of June 13, 2025, was 14.04 yuan/kg, down 10.8% from the beginning of the year and 26.1% year-on-year, with expectations for a price rebound in Q4 2025 [27] Group 3 - The total feed production in China is expected to rebound in 2025 after a decline in 2024, with a total production of 49.2 million tons in the first two months of 2025, a year-on-year increase of 9.6% [54] - The average price of corn in China rose from approximately 2,122 yuan/ton at the beginning of the year to over 2,400 yuan/ton, reflecting a 13.3% increase [56] - The pet health market is anticipated to grow rapidly, with significant expansion potential in the domestic market for pet food and supplies, benefiting quality domestic leaders [5][6]