The livestock breeding industry, a significant component of China's economic landscape, is undergoing a profound transformation. In September 2025, the Ministry of Agriculture and Rural Affairs and the National Development and Reform Commission jointly convened a symposium on pig production capacity regulation for enterprises, explicitly calling for reduced capacity, controlled operations, and lower animal weights, signaling a shift into a substantive phase of industry regulation.
The hog cycle typically follows the pattern of "declining hog prices -> farmers culling sows -> reduced pig supply -> rising hog prices -> farmers restocking, leading to a rebound in sow inventory -> increased pig supply -> renewed decline in hog prices." A review of past cycles reveals that each upward phase lasts approximately 1-2 years, while downward phases span about 1-3 years, with substantial price increases occurring after an upturn begins; the current hog industry is at a relatively low valuation, with multiple signals indicating that capacity reduction is likely to accelerate.
The CSI Livestock Breeding Industry Index focuses on core breeding activities, featuring a high concentration within the breeding sector and strong counter-cyclical adjustment capabilities, making it a high-purity tool for tracking the rotation of the hog breeding cycle and for sector investment, effectively reflecting the core volatility of the breeding industry chain. The index's top five constituents account for 50.1% of its weight, and the top ten account for 67.6%, covering multiple leading companies in the domestic livestock breeding industry chain and demonstrating significant advantages from this high concentration.
Since its base date, the CSI Livestock Breeding Industry Index has outperformed the CSI Livestock Index by 5 percentage points, showing relatively better historical performance. In terms of valuation, the index's current PE (TTM) is 19.02, situated at the 30.4th percentile since its launch, indicating a relatively low level near the cycle's bottom and potentially offering substantial room for valuation recovery. Furthermore, due to its significant exposure to the livestock breeding cycle, the index has historically exhibited considerable volatility.
The Yongying Fund index team employs a refined operational management strategy, aiming to minimize tracking error, control risk, and enhance returns while replicating the benchmark index. The company continues to enrich its index product lineup, with thematic products already covering major sectors such as cyclicals, healthcare, manufacturing, and technology, while persistently exploring investment-worthy themes to form a dual-track layout of "broad-based foundations + innovative breakthroughs."
The Yongying CSI Livestock Breeding Industry ETF (Code: 159165) provides investors with a low-cost, efficient tool for gaining exposure to the livestock breeding sector. At the current juncture, with industry valuations at a historical bottom, signals of a cyclical reversal gradually emerging, and continued policy support, the sector may offer attractive investment value. Index-based investing can help diversify individual stock risks. Investors optimistic about the long-term development of the livestock breeding industry and seeking to capture opportunities from a potential hog cycle reversal may wish to pay close attention to this product.
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