China Galaxy Securities: Deepen the promotion of large-scale single crop yield improvement actions in food and oil crops. It is recommended to actively pay attention to Yuan Longping High-Tech Agriculture (000998.SZ) and others.

China Galaxy Securities released a research report stating that on February 23, the "Opinions of the Central Committee of the Communist Party of China and the State Council on Further Deepening Rural Reform and Solidly Promoting the Comprehensive Revitalization of Rural Areas" proposed: To achieve Chinese-style modernization, it is necessary to accelerate the comprehensive revitalization of rural areas. Against the background of "making every effort to promote agricultural efficiency", efforts should be made to play to strengths while striving to address weaknesses, improve planting efficiency, and focus on the core application of agricultural technology and the transformation of seed industry technology. It is recommended to actively pay attention to outstanding seed industry leading companies, including Yuan Longping High-Tech Agriculture (000998.SZ) and ShanDongDenghai Seeds (002041.SZ). At the same time, pay attention to Muyuan Foods (002714.SZ) and Wens Foodstuff Group (300498.SZ). The main points of China Galaxy Securities are as follows: Deepen the action of increasing the yield of grain and oil crops on a large scale. The first provision emphasizes "stabilizing the sown area of grain, focusing on increasing yield and quality, ensuring stable and abundant grain output... and implementing the new round of the task of increasing grain production capacity by one trillion yuan." By 2024, China's grain yield per mu was 394.7 kg, up 1.3% year-on-year, contributing more than eight-tenths of the increase and surpassing the per mu yield in 1949 by more than 326 kg. In 2024, China will continue to implement the program for increasing the yield of corn and soybeans, focusing on "increasing density," "creating high yields," "high performance," and "building on a systematic basis," to promote balanced increase in production. Regarding major grain and oil crops, by 2024, China's yields of rice, wheat, corn, and soybeans have all increased: 1) Rice yield per mu is 477 kg, up 0.3% year-on-year, leading internationally, far higher than rice-producing countries such as India, Pakistan, and Myanmar; 2) Wheat yield per mu is 396 kg, up 2.7% year-on-year, achieving a recovery growth and also leading internationally, significantly higher than countries like the U.S., Canada, and Australia; 3) The corn yield per mu is 439.4 kg, up 0.9% year-on-year, with China focusing on increasing corn yield density; due to limited genetic resources and high dependence on foreign germplasm, China's yield is still lagging behind the international advanced level, and the development of biological breeding technology in the future may be crucial; 4) Benefiting from mechanization and the popularization of good seeds, China's soybeans yield is 133.3 kg per mu in 2024, up 0.5% year-on-year, but there is still room for significant improvement compared to overseas countries. Support the stable development of the livestock industry and monitor and control the production capacity of pigs. The second provision emphasizes "monitoring and controlling the production capacity of pigs, promoting stable development... strengthening the prevention and control of major animal diseases and key zoonotic diseases." In January 2025, China's inventory of breeding sows was 40.62 million, down 0.4% month-on-month and 0.12% year-on-year, approaching a low for nearly four years. The bank estimates that the number of breeding sows in 2025 is around 40.4 million, down by about 1.7 million year-on-year, the largest decrease since 2020. Therefore, the pressure on production capacity in 2025 is relatively eased, and attention should be focused on the improvement of breeding efficiency. Considering that the costs of leading pig enterprises are in a downward trend, the bank believes that the pig breeding business in 2025 may remain profitable. Risk factors: Risks related to fluctuations in raw material prices, policy risks, risks related to natural disasters, etc.