The agricultural sector continued its upward momentum today (November 26). The market's sole Agribusiness ETF (159275) remained in positive territory after opening, rising 0.3% at press time.
Among constituent stocks, companies in hog farming, seeds, livestock feed, and animal health led gains. Luoniushan Co., Ltd. surged over 5%, while Shennong Seed Industry rose more than 4%. Hainan Rubber, Meihua Biological, and Jinxinnong followed with increases exceeding 2%.
On the fundamental side, persistently low hog prices have pushed breeding enterprises into losses. After the National Day holiday this year, hog prices rapidly fell to around 11 yuan/kg, causing industry-wide losses. As of November 24, 2025, the national average hog price stood at 11.6 yuan/kg, down 0.65 yuan from September 30. Piglet prices declined 1.01 yuan to 21.21 yuan/kg during the same period, reflecting significant supply pressure across the sector.
Jianghai Securities notes that under dual pressures of policy-driven "anti-involution" measures and production cuts due to losses, industry capacity may accelerate its reduction phase, potentially creating opportunities for early positioning in hog farming stocks. Long-term, leading breeders' improving cost structures, rising profit potential per cycle, and policy-controlled capital expenditures could enhance cash flow stability and dividend expectations.
Valuation metrics suggest favorable timing for agricultural sector allocation. Data shows the CSI All Share Agriculture Index tracked by Agribusiness ETF (159275) had a P/B ratio of 2.56x as of November 25 - at the 28.91 percentile over the past decade, highlighting attractive medium-to-long term value.
China Post Securities projects that approaching deadlines for capacity reduction targets will intensify policy enforcement and breeder pressures. With persistent industry losses, stubborn supply overhangs, and heightened seasonal disease risks, hog capacity reduction should remain the dominant theme, potentially setting up a price recovery in late 2026.
For exposure to the hog cycle turnaround, Agribusiness ETF (159275) - the market's most hog-concentrated product (40.25% weighting) - tracks the CSI All Share Agriculture Index, including leaders like Muyuan Foods and Wens Group across breeding, feed, crops, and animal health segments. The ETF's feeder fund (Class A 013471/Class C 013472) provides alternative access.
Risk Disclosure: The ETF passively tracks its underlying index (base date 2004.12.31, launched 2016.12.12). Index components may change per methodology, and historical performance doesn't guarantee future results. Constituent stock mentions aren't recommendations. Investors should review fund documents and assess personal risk tolerance. The fund carries R3-medium risk, suitable for balanced (C3) or higher risk-profile investors per manager's assessment. Regulatory approval doesn't constitute investment endorsement.
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