East Sea Securities: The first document first mentions new agricultural productive forces. Focus on agriculture and animal husbandry sectors opportunities under policy support.

East Sea Securities released a research report stating that the Central Document No. 1 emphasizes ensuring national food security and developing new quality agricultural productivity. The document first proposed the development of "new quality agricultural productivity" and emphasized technological innovation. In addition, the document also mentioned stabilizing the capacity of the animal husbandry industry and alleviating the difficulties in the beef and dairy industry. With the implementation of policy support, the production and operation situation is expected to improve. In terms of seed industry, it is recommended to pay attention to new quality agricultural productivity, continue to promote the industrialization of biological breeding, and focus on Yuan Longping High-Tech Agriculture (000998.SZ), ShanDongDenghai Seeds (002041.SZ), Beijing Dabeinong Technology Group (002385.SZ), among others. In the animal husbandry industry, it continues to emphasize steady development. The pig breeding industry has entered a stage of competition in operational quality, and enterprises with strong cost control capabilities can better withstand cyclical fluctuations. It is recommended to actively pay attention to Muyuan Foods (002714.SZ), Wens Foodstuff Group (300498.SZ), Yunnan Shennong Agricultural Industry Group (605296.SH), Leshan Giantstar Farming&Husbandry Corporation (603477.SH), and Jiangsu Lihua Foods Group (300761.SZ). East Sea Securities' main points are as follows: Event: On February 23, the Central Document No. 1 "Opinions of the CPC Central Committee and the State Council on Further Deepening Rural Reform and Solidly Promoting the Comprehensive Revitalization of Rural Areas" was released, emphasizing ensuring national food security and developing new quality agricultural productivity. It is divided into six parts: 1. Continuously enhancing the supply guarantee capacity of important agricultural products; 2. Continuously consolidating and expanding the achievements of poverty alleviation; 3. Vigorously developing industries that enrich the people at the county level; 4. Vigorously promoting rural construction; 5. Vigorously improving rural governance systems; 6. Vigorously improving the guarantee of elements and optimizing the system of allocation. Focus on food security, expand the improvement of grain output per unit area. 1. Stabilize the area, increase output per unit area, and improve quality. The document continues to prioritize ensuring national food security, stabilizing grain sowing area, focusing on increasing output per unit area and improving quality to ensure stable and abundant food production. Further expand the scale of improving grain output per unit area, increase efforts to promote high-yield and efficient production models, promote water and fertilizer integration, and promote large-scale production increase. Increase efforts to implement the new round of a billion catties of capacity to increase grain production. 2. Improve support policies for grain production. Implement the minimum purchase price policy for rice and wheat, and improve subsidies for corn and soybean producers, as well as rice subsidies. Encourage local areas to carry out special loans with interest subsidies for grain and oil planting. According to statistics, China's grain sowing area in 2024 is 119,319 thousand hectares, a year-on-year increase of +0.3%. The unit output per unit area of grain is 5,921 kilograms per hectare, a year-on-year increase of +1.3%. Both sowing area and unit output per unit area have steadily increased. Stabilize the capacity of the animal husbandry industry, and mention for the first time the alleviation of the beef and dairy industry. The document proposes to support the stable development of the animal husbandry industry. For pig breeding, stable development is still the main focus, with emphasis on "doing a good job in monitoring and controlling pig breeding capacity to promote stable development." According to the Ministry of Agriculture and Rural Affairs, as of January 2025, China's sow inventory was 40.62 million, a decrease of 0.4% compared to the previous period, and production capacity appeared to decline again. Post-holiday pig prices continue to remain at a low level, with narrowing breeding profits. With the improvement of production efficiency, the supply of pigs in 2025 will be sufficient, coupled with the possibility of an increase in feed costs, the industry may enter a period of capacity reduction. It is recommended to pay attention to the pig breeding sector. In addition, this year's No. 1 document for the first time mentions the alleviation of the beef and dairy industry, which is a change from last year. "Promotion of alleviation of the beef and dairy industry, stable basic production capacity." Beef and dairy farming are suffering losses, and the upstream ranch production capacity is gradually being reduced. With the implementation of policy support, the production and operation situation is expected to improve, and the supply and demand situation is gradually improving. Pay attention to upstream dairy farming enterprises. The document first proposed the development of "new quality agricultural productivity" and emphasized technological innovation. The document emphasizes the application of technological innovation in agricultural production, proposing to lead advanced production factors to gather and develop new quality agricultural productivity tailored to local conditions through technological innovation. Thoroughly implement the action of revitalizing the seed industry, and continue to promote the industrialization of biological breeding. Support the development of Jiangsu Nonghua Intelligent Agriculture Technology, and expand the application scenarios of artificial intelligence, data, and low-altitude technologies. The document has mentioned the development of biological breeding for five consecutive years. The description of the seed industry has evolved from "promoting the industrialization of biological breeding to expand rapidly" last year to "continuing to promote the industrialization of biological breeding" this year. The pace of industrialization of biological breeding is accelerating, and the commercialization of genetically modified corn and soybeans is continuing. Focus on breeding companies. Risk warning: risk of diseases, policy progress falling short of expectations, and industrialization of breeding falling short of expectations.