The agricultural, animal husbandry, and fishery sector defied the broader market downturn on Friday (June 26th)! The first ETF of its kind in the market, the Agricultural, Animal Husbandry, and Fishery ETF (159275), experienced low-level volatility in the morning session before suddenly surging, with its intraday price rising as much as 2.29%. It closed up 0.27%.
Regarding its constituent stocks, livestock farming companies saw widespread gains. By the close, Shennong Group hit the daily limit-up, while Wens Foodstuff Group Co., Ltd., Muyuan Foods Co., Ltd., and Lihua Co., Ltd. all rose over 3%. Juxing Agriculture & Animal Husbandry Co., Ltd. and New Hope Liuhe Co., Ltd. were also among the top gainers.
On the news front, pork prices have remained persistently low. Data shows that last week, the national average price for lean hogs was approximately 9.51 yuan/kg, still fluctuating within a bottom range. The average price for piglets was about 18.82 yuan/kg, down 8.55% week-on-week, indicating a widening decline. In terms of farming profits, the sector remained in deep loss territory last week, with average losses for self-breeding and self-raising operations around 346 yuan per head, indicating the industry continues to operate at an overall loss.
Supply and Valuation Perspectives
Analysis suggests that on the supply side, pressure may ease slightly in July and August. Recent widening of the price gap between standard and fattened hogs could potentially foster industry sentiment to hold back hogs from market, supporting price stabilization and increases. The sector has undergone significant prior adjustments, with current valuations at historical lows, implying limited downside risk and a relatively high margin of safety.
From a valuation perspective, the agricultural, animal husbandry, and fishery sector remains at relatively low levels, suggesting it may currently be a favorable time for allocation. Data shows that as of the close on Thursday (June 25th), the price-to-book (P/B) ratio of the CSI All Share Agricultural, Animal Husbandry, and Fishery Index, which the ETF (159275) tracks, was 1.95 times, sitting at the 0th percentile over the past five years, highlighting the cost-effectiveness of medium-to-long-term allocation.
Future Outlook and Investment Strategy
Looking ahead, analysts indicate the sector is currently in a phase of price consolidation, testing farming costs and operational quality, with industry P/B valuations at historical lows. Investor views remain divided on the extent of capacity reduction and potential upside elasticity. The pig farming industry is at an inflection point with an improving supply-demand structure. Accelerated capacity reduction has initially materialized, and the pig farming sector is expected to gradually strengthen as this reduction continues, suggesting investors watch for contrarian investment opportunities in this area.
For comprehensive exposure across the agricultural, animal husbandry, and fishery industry chain, the first ETF of its kind in the market, the Agricultural, Animal Husbandry, and Fishery ETF (159275), is a key focus. According to the index provider, this ETF passively tracks the CSI All Share Agricultural, Animal Husbandry, and Fishery Index. Its top holdings include leading pig farming companies like Muyuan Foods Co., Ltd. and Wens Foodstuff Group Co., Ltd., and it also covers major sub-sectors of the industry chain such as feed, grain cultivation, and animal health. Off-exchange investors can also access the sector through the ETF's feeder funds (Class A: 013471, Class C: 013472).
(Note: This content includes general market commentary and information. It is not investment advice. Investors should conduct their own research and consult professional advisors. Past performance of indices or funds does not guarantee future results. Investing involves risks, including potential loss of principal. Please refer to the fund's legal documents for detailed risk information.)
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