The agriculture, animal husbandry, and fishery sector experienced a period of mixed trading on August 24th, with sub-sectors like seed production, crop cultivation, and agricultural product processing leading the gains. By the market close, Denghai Seeds hit the daily limit, while Shennong Seed Industry and Suke Agricultural Development each rose over 4%. Other notable gainers included Longping High-Tech, Jinjian Rice Industry, and Dunhuang Seed Industry. On the downside, weaker performance in sub-industries such as animal health products dragged on the overall sector's momentum.

On the news front, pork prices have been climbing in recent days, supported by a widening price gap between fat and standard pigs and a resurgence in secondary fattening sentiment. Spot hog prices have rebounded for several consecutive sessions, with the August 21st price reaching 10.92 yuan per kilogram, up 2.6% week-on-week but still down 20.8% year-on-year. Current trends suggest pork prices are experiencing a gradual upward movement.

Chen Jianhua, fund manager of Agriculture, Animal Husbandry, and Fishery ETF Huabao (159275), noted that the hog sector is currently at a major divergence point between accelerating capacity reduction and an impending price inflection. However, since both sector positioning and valuations are at low levels, regardless of which direction these two logics take, they are likely to drive share prices higher. In simple terms, whether pork prices remain persistently weak or improve, both scenarios are favorable for related stocks. He added that next year could very likely see a year of fundamental resonance between hog and poultry farming, making the current farming sector worthy of close attention.

Additionally, global climate patterns have been unusually erratic since the second quarter of this year. According to meteorological agencies in China and several other countries, a strong El Ni帽o event is highly probable this year, with some suggesting it could be the strongest on record. Historical experience shows that strong El Ni帽o events typically last one to two years and have varying impacts on agricultural products. Commodities that tend to benefit most include sugar, rubber, and palm oil. From a two-year perspective, we are currently in the first year, with major agricultural products like sugar and rubber still at relatively low levels.

From a valuation standpoint, the agriculture, animal husbandry, and fishery sector remains at comparatively low levels, suggesting this could be an opportune time for positioning. Wind data shows that as of the previous trading day (August 21st), the price-to-book ratio of the CSI All-Share Agriculture, Animal Husbandry, and Fishery Index, which the market's first agriculture, animal husbandry, and fishery ETF (159275) tracks, stood at 2.23 times, positioned at a low 6.27th percentile over the past five years, highlighting its medium-to-long-term allocation value.

Looking ahead, Orient Securities holds a positive view on the hog farming sector. With the market having experienced deep losses for over five months, capacity reduction is becoming increasingly clear. Combined with ongoing policy reinforcement on industry capacity restrictions, the medium-to-long-term price outlook appears sustainable, and earnings growth for hog enterprises is expected. Starting in the third quarter, unexpectedly strong hog price increases are likely to drive the sector into an upward trajectory.

For those seeking a one-stop allocation across the entire agriculture, animal husbandry, and fishery value chain, the market's first agriculture, animal husbandry, and fishery ETF (159275) deserves attention. According to data from China Securities Index Company, the ETF passively tracks the CSI All-Share Agriculture, Animal Husbandry, and Fishery Index, with weightings including leading hog farming stocks and coverage of major sub-segments such as feed, grain cultivation, and animal health products. Off-market investors can also participate through the agriculture, animal husbandry, and fishery ETF feeder funds (Class A 013471, Class C 013472).

Note 1: When subscribing or redeeming fund shares, the subscribing/redeeming agent broker may charge a commission of up to 0.5%, which includes fees collected by securities exchanges and registration institutions. Fund fee details are specified in the fund's legal documents. Note 2: The market's first agriculture, animal husbandry, and fishery ETF refers to the first ETF tracking the CSI All-Share Agriculture, Animal Husbandry, and Fishery Index. Institutional views referenced from Orient Securities' August 16th weekly report on the agriculture, forestry, animal husbandry, and fishery industry titled "Super El Ni帽o Confirmed, Distant Price Increase Expectations Rise."

Risk Disclosure: Agriculture, Animal Husbandry, and Fishery ETF Huabao passively tracks the CSI All-Share Agriculture, Animal Husbandry, and Fishery Index, with a base date of December 31, 2004, and was released on December 12, 2016. Index constituent stocks are adjusted according to the index compilation rules, and backtested historical performance does not indicate future index performance. The stocks mentioned in this article are only objectively listed as index constituents and do not constitute any stock recommendation or represent the fund manager's and fund's investment direction. Any information appearing in this article (including but not limited to stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors are responsible for their own independent investment decisions. Furthermore, any views, analyses, or forecasts in this article do not constitute investment advice to readers, and the company assumes no responsibility for direct or indirect losses arising from the use of this content. Investors should carefully read fund legal documents such as the Fund Contract, Prospectus, and Fund Product Information Summary to understand the fund's risk-return characteristics and select products suitable for their own risk tolerance. Past performance of a fund does not indicate future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of fund performance. According to the fund manager's assessment, Agriculture, Animal Husbandry, and Fishery ETF Huabao has a risk rating of R3-moderate risk, suitable for balanced (C3) and above investors. Please refer to the sales institution for suitability matching opinions. Sales institutions (including the fund manager's direct sales and other sales channels) conduct risk assessments on the above funds in accordance with relevant laws and regulations. Investors should promptly pay attention to the suitability opinions issued by the fund manager. The suitability opinions of various sales institutions may not necessarily be consistent, and the fund product risk level assessment results issued by fund sales institutions must not be lower than the fund manager's risk level assessment results. The risk-return characteristics and risk levels in the fund contract may differ due to different consideration factors. Investors should understand the fund's risk-return situation and carefully choose fund products based on their own investment objectives, time horizon, investment experience, and risk tolerance, bearing risks themselves. The registration of the above funds by the China Securities Regulatory Commission does not indicate any substantive judgment or guarantee of the fund's investment value, market prospects, or returns. Fund investment requires caution.