The Agriculture, Animal Husbandry, and Fishery sector staged a strong rally today (January 26th). The market's sole Agriculture, Animal Husbandry & Fishery ETF (159275), after briefly oscillating near the break-even level at the open, quickly surged higher. As of this writing, its price has climbed 1.53%, decisively reclaiming three key moving averages: the 5-day, 10-day, and 20-day lines.
Among the constituent stocks, shares in sectors like animal healthcare and livestock breeding led the gains. At the time of writing, Wuhan Hvsen Biotechnology Co., Ltd. hit the 20% daily limit-up, while Layn Natural Ingredients Corp. also surged by the 10% limit. Hile Bio-technology Co., Ltd. jumped over 7%, with Jinhe Biotechnology Co., Ltd., China Animal Husbandry Industry Co., Ltd., and Tangrenshen Group Co., Ltd. also posting significant gains.
Caitong Securities pointed out that in the hog farming sector, supply pressures persist, and coupled with policy guidance, capacity reduction may accelerate. For poultry farming, frequent outbreaks of avian influenza overseas create uncertainty in the introduction of grandparent breeding stock, which is a medium to long-term positive for the price chain of white-feather broilers. The animal healthcare industry continues to be catalyzed by its growth potential, with new products successively launching to provide growth momentum. The seed industry requires attention to the progress of expanding the application of biological breeding. The pet sector continues its domestic sales growth trend, with the market share of domestic brands steadily increasing.
Valuation-wise, the Agriculture, Animal Husbandry, and Fishery sector's valuation levels remain relatively low, suggesting the current period might be a favorable time for allocation. Data shows that as of the previous trading day's close (January 23rd), the price-to-book ratio of the CSI All Share Agriculture, Animal Husbandry & Fishery Index, which the sole Agriculture, Animal Husbandry & Fishery ETF (159275) tracks, was 2.5 times. This places it at the 23.53rd percentile over the past five years, highlighting the attractive cost-effectiveness for medium to long-term allocation.
Looking ahead, Sinolink Securities stated that in the short term, hog prices still have room to decline. Recent industry capacity has already decreased under policy adjustments and supply pressure. Simultaneously, industry prices have fallen below the full cost line, and overall losses are expected to lead to industry capacity reduction, with the sector's performance currently bottoming out and stabilizing. From a medium to long-term perspective, the hog farming industry still possesses relatively strong central profits. Furthermore, following the African Swine Fever outbreak, the industry's rapid expansion included many companies engaging in low-quality capacity increases, resulting in a wide variance in industry costs. Leading enterprises have ample room to release excess profits, and it is advisable to select high-quality companies with low costs.
To position for a potential reversal in the hog cycle with one click, focus on the market's sole Agriculture, Animal Husbandry & Fishery ETF (159275). According to China Securities Index Co., Ltd. statistics, this ETF passively tracks the CSI All Share Agriculture, Animal Husbandry & Fishery Index. Its top weighted stocks include industry leaders like Muyuan Foods Co., Ltd. and Wens Foodstuff Group Co., Ltd., and it also covers major sub-sectors of the agricultural chain such as animal feed, grain cultivation, and animal healthcare. Off-exchange investors can also gain exposure to the sector through the ETF's feeder funds (Class A: 013471 / Class C: 013472).
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