Investment Rating - The report maintains a "Recommended" rating for the agricultural, forestry, animal husbandry, and fishery industry [9][66]. Core Insights - The swine industry is entering an accelerated phase of capacity reduction, presenting opportunities at the bottom of the market. Regulatory measures are being reinforced to control pig prices, with expectations of a gradual adjustment rather than aggressive interventions. The focus is on low-cost performance and dividend increases for value reassessment, particularly for leading companies like Muyuan Foods and WH Group [1][14]. - The poultry sector is expected to see improvements in fundamentals, with historical highs in the number of breeding stock updates. The price dynamics are currently low, but there is potential for marginal changes in the cycle. Recommended companies include Shennong Development and Lihua Agricultural [2][28]. - The animal health sector is advancing with the clinical trials of the African swine fever subunit vaccine, which has received approval for clinical trials. The likelihood of domestic vaccine market entry is increasing, with recommended companies including BioFeng and Kexin Biological [3][6]. - The pet industry continues to grow rapidly, with significant improvements in profitability. Recommended companies in the pet food sector include GuaiBao Pet and ZhongChong Co., while in the pet medical sector, RuiPu Biological is highlighted [9][60]. Summary by Sections Swine Industry - The swine industry is experiencing a capacity reduction phase, with regulatory measures aimed at stabilizing prices. The average price of pigs in December 2025 was 11.59 CNY/kg, with a slight month-on-month decrease. The number of breeding sows has decreased by 1.1% month-on-month and 2.1% year-on-year [13][14]. - Recommended companies include Muyuan Foods and WH Group, with additional attention on Dekang Agriculture, Shennong Group, and Juxing Agriculture [1][14]. Poultry Industry - The poultry sector is seeing a potential improvement in fundamentals, with breeding stock updates reaching historical highs. The average price for broiler chickens was 3.9 CNY/jin, with a slight increase [26][28]. - Recommended companies are Shennong Development and Lihua Agricultural [2][28]. Animal Health - The animal health sector is focused on the progress of the African swine fever vaccine trials, with the first round of trials proceeding as planned. The second round is set to begin by the end of March 2026 [3][6]. - Companies to watch include BioFeng, Kexin Biological, and RuiPu Biological [6]. Pet Industry - The pet market is projected to reach a scale of 300.2 billion CNY in 2024, with a year-on-year growth of 7.5%. The average annual spending per pet dog is 2,961 CNY, while for cats, it is 2,020 CNY [59][60]. - Recommended companies include GuaiBao Pet, ZhongChong Co., and Peidi Co. in the pet food sector, and RuiPu Biological in the pet medical sector [9][60]. Feed Industry - The feed industry is experiencing price fluctuations, with the price of feed for fattening pigs at 3.34 CNY/kg, showing a month-on-month increase [47][48]. - Recommended companies include Haida Group and HeFeng Co. [48]. Planting Industry - Grain prices have increased year-on-year, with corn prices at 2,250 CNY/ton, showing a 10.5% increase compared to the previous year [41][46]. - Companies to focus on include SuKan Agricultural Development, LongPing High-Tech, and DengHai Seeds [7][46].

Group 1 - The company has submitted a clinical trial application for its African swine fever subunit vaccine developed in collaboration with the Lanzhou Veterinary Research Institute of the Chinese Academy of Agricultural Sciences [2] - The company will fulfill its information disclosure obligations in a timely manner if the relevant matters meet the standards for information disclosure [2]

Core Viewpoint - The significant upward revision of profit forecasts for Shenghua Co. (600201.SH) by Kaiyuan Securities reflects a strong confidence in the company's growth prospects, particularly driven by the development of the African swine fever vaccine [1][6]. Group 1: Profit Forecast Adjustments - In late October 2025, Kaiyuan Securities provided a cautious profit forecast for Shenghua Co. for 2025-2027, estimating net profits of 1.88 billion, 3.52 billion, and 5.08 billion respectively [2]. - By January 8, 2026, the profit forecast for 2026 was dramatically increased to 7.12 billion, nearly doubling the previous estimate, while the 2027 forecast rose by over 138% to 12.11 billion [2]. Group 2: Key Drivers of Growth - The major adjustment in profit forecasts is primarily attributed to the unexpected progress in the research and development of the African swine fever subunit vaccine, with Shenghua Co. being the first and only company in China approved for clinical trials [3]. - The vaccine is expected to create an incremental market size of approximately 84 billion in China, positioning Shenghua Co. as a significant beneficiary due to its first-mover advantage [3]. Group 3: Traditional Business Performance - Besides the potential of the African swine fever vaccine, Shenghua Co.'s traditional business is also showing steady growth, with a 50% year-on-year increase in sales of foot-and-mouth disease vaccines in the first three quarters of 2025 [4]. - Other vaccine products, including those for ruminants, poultry, and pets, are also experiencing strong growth, supported by a robust investment in R&D, which accounted for 13.51% of revenue in the first half of 2025 [4].

Core Viewpoint - The major shareholder of Jinyu Biotechnology Co., Ltd. has initiated a share buyback, reflecting confidence in the company's prospects for its African swine fever vaccine development [1][3]. Group 1: Shareholder Actions - As of January 6, 2026, the major shareholder, Inner Mongolia Jinyu Biological Holdings Co., Ltd., has completed its first share buyback, acquiring 614,600 A-shares, which represents 0.0553% of the total share capital, with a total transaction amount of approximately 9.83 million yuan [1]. - The buyback plan was announced on December 24, 2025, with a commitment to purchase shares worth between 50 million and 100 million yuan over the next 12 months [1]. Group 2: Vaccine Development - The urgency for vaccine development is underscored by the ongoing severe African swine fever epidemic, with over 8,000 reported cases globally from January to September 2025 and more than 2 million livestock deaths since 2022 [2]. - The company is collaborating with the Chinese Academy of Sciences to develop a subunit vaccine for African swine fever, which is expected to provide critical technical support for epidemic control and significantly reduce losses in the breeding sector [2]. Group 3: Research and Production Capabilities - The company has established a biosafety level 3 laboratory to support key research activities, including antigen screening and efficacy validation for the vaccine [3]. - The vaccine has received clinical trial approval from the Ministry of Agriculture and Rural Affairs, with the first clinical trial phase completed and the efficacy evaluation stage currently underway [3]. - The company has prepared a GMP-compliant production facility for the vaccine, ensuring readiness for industrialization and quality control [3]. Group 4: Financial Performance - The company has maintained over 10% of its revenue for R&D investment over the past six years, indicating a strong commitment to innovation [4]. - For the first three quarters of 2025, the company reported revenues of 1.042 billion yuan, a year-on-year increase of 7.38%, with a significant profit growth of 116.40% in the third quarter [4].

Core Viewpoint - The company, Jinyu Biotechnology Co., Ltd., reported a revenue of 1.04 billion yuan in the first three quarters of 2023, reflecting a year-on-year growth of 7.38%, and a net profit of 161 million yuan [2]. Group 1: Financial Performance - In Q3 2023, the company achieved a revenue of 423 million yuan, representing a year-on-year increase of 17.76%, and a net profit of 101 million yuan, which is a significant growth of 116.40% [3]. - For the first three quarters of 2023, the company's R&D expenses amounted to 96.01 million yuan, showing a year-on-year increase of 9.08% [4]. Group 2: Product and Market Strategy - The company focuses on the research, production, and sales of veterinary biological products, with a product range that includes over a hundred types of vaccines for pigs, poultry, ruminants, and pets [3]. - The company is implementing a "big product, big customer" strategy, achieving breakthroughs in the development of major vaccines such as foot-and-mouth disease, African swine fever, and feline infectious peritonitis [3]. - The company is expanding its international presence, with products registered and sold in countries like Pakistan and Vietnam, and plans to enhance penetration in Central Asia, Southeast Asia, and Africa [4]. Group 3: Innovation and Future Plans - The company emphasizes technological innovation to address industry challenges, with ongoing development of innovative products like the African swine fever subunit vaccine and mRNA vaccine for feline infectious peritonitis [3]. - The company aims to transition from single product sales to a model that includes "professional services + comprehensive solutions," focusing on deep customer engagement [5]. - The pet business is identified as a significant growth area, with plans to establish a pet marketing ecosystem and expand into health products and pharmaceuticals [5].

Market Review - The agricultural, forestry, animal husbandry, and fishery sector has outperformed the benchmark index since the beginning of 2025, with an absolute return of +24.66%, surpassing the CSI 300 index by 10.47 percentage points [10][17][18] - The sector's index has increased by 18.4% over the past year, outperforming the CSI 300 index by 0.96 percentage points [14] Swine Breeding - The breeding capacity of sows is gradually declining, with a total of 39.9 million sows recorded by the end of October 2025, a year-on-year decrease of 2.04% [27][24] - The average price of live pigs in October 2025 was 11.52 yuan/kg, reflecting a month-on-month decline of 11.46% and a year-on-year drop of 34.77% [29] - The swine breeding industry is currently facing losses, with theoretical profits for self-bred pigs averaging -209.67 yuan/head in October 2025, marking a significant decline from previous months [36][41] - The market share of the top eight listed pig companies has increased from 4.6% in 2017 to 21.2% by the third quarter of 2025, indicating a trend towards industry consolidation [37][41] Animal Health - The animal health market in China has shown steady growth, with sales increasing from 47.23 billion yuan in 2016 to 69.65 billion yuan in 2023, reflecting a compound annual growth rate of 5.71% [45][46] - The introduction of new products and the expansion of demand are driving the growth of the animal health industry, particularly with the anticipated market expansion following the launch of African swine fever vaccines [51][52] - The market for companion animal health products is also growing, with the pet medical market expected to reach approximately 84 billion yuan in 2024, driven by increased spending on veterinary services [56] Seed Industry - The seed industry is experiencing a transformation due to new regulations and policies, with significant investment opportunities arising from the commercialization of biotechnology [4][19] - The market for genetically modified corn is projected to expand, with companies in the sector expected to benefit from increased industry concentration and profitability [18][19] Pet Food - China's pet food market is projected to continue growing, benefiting from demographic changes and rising living standards, with significant potential for domestic brands to capture market share [5][59] - The market for pet food exports is expected to maintain year-on-year growth in 2025, reflecting the increasing demand for high-quality pet products [5][59] - The pet food industry remains fragmented, with ongoing trends towards domestic substitution and increased online sales [5][59]

Core Viewpoint - The company reported a significant rebound in performance in Q3 2025, despite facing pressures in the animal health industry due to market competition and price declines in core products [1][2]. Financial Performance - For the first three quarters of 2025, the company achieved revenue of 1.042 billion yuan, a year-on-year increase of 7.38%, and a net profit attributable to shareholders of 161 million yuan [1]. - In Q3 2025 alone, the company recorded revenue of 423 million yuan, up 17.76% year-on-year, and a net profit of 101 million yuan, representing a substantial increase of 116.40% [1]. Market Position and Strategy - The company maintained a strong market share in core products like foot-and-mouth disease vaccines, despite intense competition and price pressures [2]. - The pet and international segments have shown remarkable performance, becoming key growth drivers for the company [2]. - The company is transitioning from pure product sales to a model that includes professional services and comprehensive solutions, enhancing customer loyalty and ensuring healthy cash flow through strict credit policies [2]. Research and Development - The company invested 96.015 million yuan in R&D in the first three quarters, reflecting a year-on-year increase of 9.08% [2]. - The company has successfully diversified its product structure, reducing reliance on single products and achieving significant sales growth in core vaccines [3]. - The company is focusing on key products like the African swine fever vaccine, which is seen as a critical opportunity in the animal health industry [3]. Technological Advancements - The company established the world's first animal mRNA vaccine production facility, which is a core component of its technological advantage [4]. - The company has multiple mRNA vaccine projects in various stages, including the world's first mRNA vaccine for feline infectious peritonitis, which is expected to generate over 1 billion yuan in sales in its first year [4]. Future Growth Strategy - The company aims to shift from reliance on single products to a multi-business model, with three main growth engines: expanding the pet business, international market penetration, and continuous R&D breakthroughs [5].

Core Viewpoint - The report from Zhonghang Securities highlights a decrease in the number of breeding sows in September, indicating potential further reductions in pig production capacity due to ongoing industry losses and seasonal disease outbreaks [1][2]. Industry Analysis - The number of breeding sows in China as of September was 40.35 million, a year-on-year decrease of 280,000 heads (0.7%) and a month-on-month decrease of 90,000 heads (0.2%) [1]. - The average price of live pigs in China as of October 25 was 11.83 yuan per kilogram, reflecting a week-on-week increase of 5.4%, a month-on-month decrease of 7.2%, and a year-on-year decrease of 32.7%, indicating historically low prices [1]. - As of October 24, the profit margins for pig farming were negative, with losses of 289.07 yuan per head for purchased piglets and 185.68 yuan per head for self-bred piglets, marking an increase in losses compared to the previous month [1][3]. Market Dynamics - The pig farming sector is expected to experience a reasonable reduction in production capacity due to ongoing losses and government policies aimed at reducing overcapacity, which may positively influence pig prices and market trends [2]. - The sales volume of pigs in September reached 7.6726 million heads, a month-on-month increase of 3.89%, while the average selling price decreased to 13.89 yuan per kilogram, down 4.89% from the previous month [3]. - The average weight of pigs sold in September was 102.4 kg, reflecting a month-on-month increase of 1.14% [3]. Animal Health Sector - The animal health industry is expected to recover alongside improvements in the pig farming sector, as historical data shows higher sales during profitable farming years [4]. - Increased competition in the animal health sector is anticipated, with weaker companies exiting the market, leading to higher industry concentration and benefits for larger firms with strong R&D capabilities [4]. - The domestic animal health market has significant growth potential, particularly in the pet medicine sector, supported by government policies promoting domestic vaccine production [4]. Agricultural Sector - The global grain supply and demand dynamics are being affected by geopolitical factors, with adjustments in production forecasts for wheat, rice, corn, and soybeans for the 2025/26 season [5][6][7]. - The focus on seed industry revitalization is expected to continue, with policies promoting the commercialization of biotechnology and genetically modified crops, benefiting leading companies in the sector [8]. Pet Industry - The domestic pet food market is projected to grow significantly, with compound annual growth rates of 17% for pet staple food, 15% for nutritional products, and 25% for snacks by 2026 [8]. - Leading domestic pet food companies are advancing brand strategies and expanding globally, which will help mitigate tariff risks and support overseas business growth [8].

Investment Rating - The report maintains a "Recommended" rating for the agricultural, forestry, animal husbandry, and fishery industry [9][62]. Core Views - The swine sector is undergoing deepening regulation, with a focus on value reassessment opportunities. The report suggests that the price of pigs may face downward pressure in the short term due to increased market supply, but regulatory measures are expected to stabilize prices in the long run [1][16]. - The poultry sector is anticipated to improve, with data indicating a rise in the number of breeding stock and a shift towards self-breeding [2][27]. - The animal health sector is seeing a potential improvement in competitive dynamics, particularly with the progress of clinical trials for African swine fever vaccines, which could enhance market conditions [3][35]. - The pet economy is thriving, with domestic brands gaining strength and the market expected to continue its rapid growth [9][55]. Summary by Sections Swine - The swine industry is in a regulatory phase aimed at controlling prices through capacity reduction. The average price of pigs is reported at 11.02 yuan/kg, with a weekly decrease of 0.87 yuan/kg. The number of breeding sows is stable at 40.38 million heads [15][16]. - Recommended companies include Muyuan Foods and Wens Foodstuffs, with additional attention on Dekang Agriculture, Shennong Group, and Juxing Agriculture [1][16]. Poultry - The poultry sector shows signs of improvement, with a total of 80.33 thousand sets of breeding stock updated in the first three quarters of 2025. The report highlights a shift towards self-breeding, with self-bred stock accounting for 59% [2][27]. - Recommended companies in this sector are Shennong Development and Lihua Stock [2][27]. Animal Health - The competitive landscape in the animal health sector is expected to improve, supported by government initiatives to optimize the veterinary drug industry. The report notes that clinical trials for African swine fever vaccines are underway, which could lead to commercialization [3][35]. - Recommended companies include Kexin Biological and Ruipu Biological, with additional focus on Huisheng Biological, Zhongmu Biological, and others [3][35]. Planting - The report indicates a declining pig-to-grain price ratio, with the current ratio at 4.95. The prices of corn and soybean meal have shown slight fluctuations, with corn priced at 2181 yuan/ton [39][44]. - Companies to watch include Suqian Agricultural Development, Longping High-Tech, and Denghai Seeds [7][44]. Feed - Feed prices are experiencing fluctuations, with the price for fattening pig feed at 3.34 yuan/kg. The report notes a year-on-year increase in industrial feed production [45][46]. - Recommended companies include Haida Group and He Feng Shares [45][46]. Pets - The pet market is projected to reach 300.2 billion yuan in 2024, with a year-on-year growth of 7.5%. The report highlights the increasing consumption per pet, with dogs averaging 2961 yuan and cats 2020 yuan annually [55][56]. - Recommended companies in the pet food sector include Guibao Pet, Zhongchong Shares, and Petty Shares, with Ruipu Biological in the pet medical sector [9][55].

Core Viewpoint - The company experienced stable revenue in the first half of 2025, but short-term profits were under pressure due to increased R&D costs and competition in the animal health industry [1][2]. Group 1: Financial Performance - In H1 2025, the company achieved operating revenue of 620 million yuan, a year-on-year increase of 1.28%, indicating relative stability in revenue [1]. - The net profit attributable to shareholders was 60.424 million yuan, a year-on-year decrease of 50.84%, reflecting short-term profit pressure [1]. - The gross profit margin for H1 2025 was 52.24%, down 5.68 percentage points compared to the previous year [1]. Group 2: R&D and Innovation - The company invested 84 million yuan in R&D in H1 2025, accounting for 13.51% of operating revenue, focusing on addressing pain points for farming customers [2]. - In July 2025, the company received clinical trial approval for an mRNA vaccine for feline infectious peritonitis, filling a technological gap in the domestic market [2]. - The company collaborated with research institutions to develop a trivalent inactivated vaccine for bovine foot-and-mouth disease, receiving clinical trial approval in April 2025 [2]. - The company obtained approval for four new veterinary drug certificates, including a novel live vaccine for bovine mycoplasma, which addresses respiratory disease prevention in cattle [2]. Group 3: Market Position and Future Outlook - The company is positioned as a leading animal health enterprise driven by R&D innovation, with a strong pipeline for the African swine fever vaccine expected to significantly support future performance [2]. - Projected net profits for 2025-2027 are estimated at 161 million yuan, 281 million yuan, and 406 million yuan, with corresponding EPS of 0.15 yuan, 0.25 yuan, and 0.37 yuan, indicating growth potential [2].