Open source securities: The low allocation value of the pork sector is evident, and the rise of domestic brands in the pet sector continues to strengthen the logic.

Open source securities released a research report stating that profit recovery combined with consumer recovery boosts, and the low position allocation value of the pig sector is evident. Recommended: Muyuan Foods (002714.SZ) and others. The domestic market of the feed sector benefits from the cycle after poultry and livestock, with strong overseas demand supporting prices. Recommended: Guangdong Haid Group (002311.SZ) and others. Upgrading consumption combined with tariff barriers, the logic of the rise of domestic pet products continues to strengthen. Domestic attitudes towards pet consumption are becoming more rational, with continuous investment in single pet consumption upgrades, combined with the escalation of tariff barriers for pet food imports and exports, the logic of the rise of domestic products continues to strengthen. Recommended: Gambol Pet Group (301498.SZ) and others. The main points of Open Source Securities are as follows: In the first quarter of 2025, the proportion of public fund holdings in the agricultural sector declined, with Yantai China Pet Foods seeing a counter-trend increase. In the first quarter of 2025, the proportion of public fund holdings in the agricultural sector declined, catalyzed by the escalation of tariffs between China and the US, the proportion of public fund holdings in the agricultural sector may increase in the second quarter of 2025. Since the fourth quarter of 2023, the proportion of public fund holdings in the agricultural sector has been continuously declining. The total market value of the agricultural sector in the first quarter of 2025 decreased to 1.2367 trillion yuan, a decrease of -0.40% month-on-month, accounting for a share of A-share market value of 1.69%, a decrease of -0.03 percentage points month-on-month. From the perspective of public fund holdings, the market value of public fund holdings in the agricultural sector in the first quarter of 2025 accounted for 0.40% of the total market value of public equity investments (a decrease of -0.03 percentage points, from the peak in the fourth quarter of 2023 of -0.44 percentage points). Since the end of March 2024, the escalation of tariffs between China and the US has intensified, highlighting the hedging properties of the agricultural sector and enhancing investment logic, it is expected that the proportion of public fund holdings in the agricultural sector in the second quarter of 2025 may increase. Looking at sub-sectors, in the first quarter of 2025, the public fund holdings in the breeding sub-sector showed a significant year-on-year decline, while the holdings in other sub-sectors remained relatively stable. In the first quarter of 2025, the public fund holdings in the agricultural sub-sectors of breeding/feed/planting/animal protection/Shenzhen Agricultural Power Group processing accounted for 0.19%, 0.17%, 0.03%, 0.01%, 0.003% respectively, a year-on-year decrease of -0.31, -0.01, -0.03, -0.01, 0.00 percentage points respectively, as the absolute percentage points of holdings are already at a low level, the holdings in each agricultural sub-sector decreased slightly compared to the previous quarter. Influenced by the pig cycle, the holdings of the breeding sector in the public fund have shown a significant year-on-year decline due to the weakening of investment logic, while the declines in other sub-sectors are relatively small. Looking at individual stocks, Guangdong Haid Group and other feed and breeding leading companies have the largest market value of holdings, while Yantai China Pet Foods has the largest increase in holdings. In the first quarter of 2025, the ranking of public fund holdings in the agricultural sector, Guangdong Haid Group, Wens Foodstuff Group, Muyuan Foods, Yantai China Pet Foods, Gambol Pet Group, ranked in terms of public fund holdings market value, were 8.25, 6.23, 4.83, 1.07, 1.04 billion yuan respectively, with a quarterly change of -3%, -6%, -13%, +532%, -7%. In the ranking of increased holdings, Yantai China Pet Foods received a substantial increase from public funds, with an increase of 900 million yuan quarter-on-quarter, far exceeding other agricultural targets. Risk Warning: Macroeconomic downturn, persistent low consumer spending, and uncertainty in animal diseases.