The No. 1 Central Document has been released with a major announcement. The agricultural sector welcomes positive news. The list of concept stocks with promising performance has been announced.

February 3rd, the Central No. 1 Document, “Opinions of the Central Committee of the Communist Party of China and the State Council on Solidly Promoting Rural Revitalization with a Focus on Agricultural and Rural Modernization,” was officially released.

This is the 14th Central No. 1 Document guiding “agriculture, rural areas, and farmers” since the 18th National Congress of the Communist Party, and also the first Central No. 1 Document of the “14th Five-Year Plan.”

**　　Grain production remains stable at around 1.4 trillion jin**

This year’s full text of the Central No. 1 Document is divided into six parts. Regarding enhancing comprehensive agricultural production capacity and quality and efficiency, the opinions require maintaining grain output at around 1.4 trillion jin. Persist in simultaneously focusing on yield capacity, ecological production, and increasing production and income, intensify the implementation of a new round of 100-billion-jin grain capacity enhancement actions, promote the integration of good fields, good seeds, good opportunities, and good methods to increase efficiency, and advance large-scale yield increases for grain and oil crops.

The opinions mention optimizing agricultural production structure and regional layout according to local conditions, promoting the improvement of grain varieties and quality, implementing projects to improve the quality and efficiency of grain circulation, and ensuring that market-oriented and policy-based storage and procurement keep prices of key agricultural products like grain at reasonable levels.

In promoting the quality and efficiency of the “vegetable basket” industry, the opinions propose adhering to the combined development of agriculture, forestry, animal husbandry, and fishery, and building a diversified food supply system. Strengthen comprehensive regulation of pig production capacity, consolidate the achievements in alleviating difficulties in the beef and dairy industries, and promote balanced supply and demand and healthy development.

The opinions also emphasize deepening the implementation of seed industry revitalization actions, accelerating the breeding and promotion of breakthrough varieties, and advancing the industrialization of biological breeding; develop new agricultural productivity suited to local conditions, promote the integration of artificial intelligence with agriculture, expand application scenarios such as drones, the Internet of Things, and robots, and accelerate key technological innovations in agricultural biological manufacturing.

Furthermore, in protecting and motivating farmers’ enthusiasm for farming and grain planting, the opinions call for strengthening policies on prices, subsidies, and insurance, and coordinating efforts; improve the income security mechanism for grain farmers; coordinate market-based procurement and policy-based storage to keep prices of important agricultural products like grain at reasonable levels.

**　　Institutions: Agriculture may become the main driver of the next market trend**

In a research report released this Monday, Orient Securities pointed out that agriculture, as a sector that reacts later in the cyclical price increase chain, is expected to become the main driver of the next market trend.

The institution noted that, based on market trading rhythms, the transmission path from non-ferrous metals to chemicals, and from chemicals to agriculture, is quite likely. Prices of agricultural-related products are also expected to follow upstream trends upward. Among current agricultural sectors, pig, rubber, and other varieties are already at the starting point of price increases due to their own capacity clearing. Major agricultural commodities represented by sugar, corn, and oils are in a tight supply-demand balance.

Tianfeng Securities believes that under the background of “de-globalization” in the United States, the reconstruction of the global agricultural supply chain is accelerating, and the importance of resources security, such as national food security, is rising, which may promote the optimization of domestic grain structure. Focus on breeding, as domestic commercialized GMO planting is expected to accelerate; biological breeding, with high barriers in technology and resources, is expected to help the seed industry break the current oversupply situation; leading seed companies with advanced GMO reserves are expected to further enhance their competitiveness.

Huatai Securities’ research report indicates that, as of Q4 2025, the proportion of agricultural/planting sector fund holdings is 1.18%/0.07%, respectively, in the 8th/12th percentile over the past five years, indicating a low allocation. From the perspective of catalysts, since January, Brent crude oil futures prices have risen about 16%, and domestic core inflation indicators are expected to continue recovering in the second half of 2025, boosting inflation expectations. Historically, the planting chain has shown significant excess returns during inflation cycles. Although global grain inventories are still in digestion, domestic prices of corn and cotton have shown a fluctuating upward trend since 2025. It is currently recommended to strengthen allocation in the planting industry chain.

In terms of ETF products, the Agriculture ETF (562900) by E Fund closely tracks the CSI Modern Agriculture Theme Index, which selects 30 listed companies involved in agricultural products, seed industry, feed, animal health and breeding, livestock products, fishery products, and agricultural machinery to reflect the overall performance of modern agricultural listed companies.

**　　Multiple concept stocks are expected to report positive performance in 2025**

According to the Oriental Wealth Concept Sector, currently, 33 A-share stocks are involved in the grain concept, with a total market value of 259 billion yuan. Among them, China National Materials Industry, Beidahuang, and Chuaning Biological rank as the top three in size.

Since the beginning of this year, most grain concept stocks have seen stock price increases, but the gains are limited, with only 7 stocks rising more than 10%. Haine Technology, Nongfa Seed Industry, and Denghai Seed Industry have all increased over 20% in the period.

Data from Oriental Wealth Choice shows that 17 grain concept stocks have disclosed performance forecasts for 2025. Haine Technology, Nongfa Seed Industry, Denghai Seed Industry, Tianhe Co., Ltd., Longping High-Tech, Huazi Industrial, and Sobo Protein are expected to see net profit increases. Shennong Seed Industry, Guangyu Group, and New Sai Co. have achieved profit turnaround or reduced losses. Wanshou Denuo and Tianyou De Liquor are expected to see net profit declines, while Dabeinong, Quanyin High-Tech, and five other stocks are reporting first losses.

Among stocks with improving performance, based on the median of the period, Sobo Protein, Longping High-Tech, Shennong Seed Industry, and Denghai Seed Industry lead in profitability, with projected net profits attributable to parent company in 2025 of approximately 185 million, 160 million, 105 million, and 97 million yuan, respectively.

In terms of growth expectations, Haine Technology listed on the Beijing Stock Exchange is expected to see net profit in 2025 increase more than double year-on-year. Huazi Industrial also expects more than double growth. Nongfa Seed Industry, Tianhe Co., Ltd., and Denghai Seed Industry are all expected to see net profit growth of over 50%.

Additionally, regarding growth potential in 2026, according to consensus forecasts from three or more institutions, Longping High-Tech’s net profit attributable to parent in 2026 may grow by over 70% year-on-year, while Denghai Seed Industry and Dabeinong are expected to achieve about 40% net profit growth. Haine Technology and Kangnong Seed Industry are forecasted to see net profit increases of 33.33% and 23.48%, respectively.

(Source: Oriental Wealth Research Center)