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**

The full text of this year’s Central No. 1 Document is divided into six parts. Regarding enhancing comprehensive agricultural production capacity and quality and efficiency, the document requires that grain output remains stable at around 1.4 trillion jin. It emphasizes simultaneous efforts on yield capacity, ecological production, and income increase, and intensifies the implementation of a new round of actions to boost grain capacity by hundreds of billions of jin, promoting the integration and efficiency of good fields, good seeds, good opportunities, and good methods, and advancing large-scale increases in the yield of rice and oil crops.

The document mentions 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 grain reserves keep prices at reasonable levels.

In promoting the quality and efficiency of the “vegetable basket” industry, the document proposes adhering to the combined development of agriculture, forestry, animal husbandry, and fishery, and building a diversified food supply system. It emphasizes strengthening the comprehensive regulation of pig production capacity, consolidating the relief results of beef and dairy industries, and promoting balanced supply and demand and healthy development.

The document also states that in-depth implementation of seed industry revitalization actions should be accelerated, breakthrough varieties should be bred and promoted, and biological breeding industrialization should be advanced; developing new agricultural productivity suited to local conditions, promoting the integration of artificial intelligence with agriculture, expanding application scenarios such as drones, the Internet of Things, and robots, and accelerating key technological innovations in agricultural biological manufacturing.

Furthermore, to protect and motivate farmers’ enthusiasm for farming and grain planting, the document calls for strengthening policy support and coordination in prices, subsidies, and insurance, improving the income security mechanism for grain farmers; coordinating market-based procurement and policy-based storage to keep prices of key 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 products are also expected to follow upstream trends upward. Among current agricultural sectors, pig and rubber prices have already begun to rise due to capacity clearing, and major agricultural commodities like sugar, corn, and oilseeds are in a tight supply-demand balance.

Tianfeng Securities believes that under the backdrop 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 grain security, is increasing, which may promote the optimization of domestic grain structure. Focusing on breeding, domestic commercialization of genetically modified crops is expected to accelerate; biological breeding, with high barriers in technology and resources, is expected to help the seed industry break through the current oversupply situation; leading seed companies with advanced GMO reserves are expected to further enhance their competitiveness.

Huatai Securities’ research report indicates that, in terms of valuation, 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 into the second half of 2025, boosting inflation expectations. Historically, planting chains have seen 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. At this point, it is 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 includes 30 listed companies involved in agricultural products, seed industry, feed, animal health and breeding, livestock products, fishery products, and agricultural machinery, reflecting the overall performance of modern agricultural listed companies.

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

According to the concept sector data from Oriental Wealth, currently, 33 A-share stocks are related to grain concepts, with a total market value of 259 billion yuan. Among them, Wuchan Zhongda, Beidahuang, and Chuanning Biological are 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%. Haien Technology, Nongfa Seed Industry, and Denghai Seed Industry have all increased over 20% during the period.

Data from Oriental Wealth Choice shows that 17 grain concept stocks have disclosed their 2025 performance forecasts. Among them, Haien 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 turnaround or reduced losses. Wanxiang Derno 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 positive performance outlooks, based on the median of the range, Sobo Protein, Longping High-Tech, Shennong Seed Industry, and Denghai Seed Industry are leading 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, Haien Technology listed on the Beijing Stock Exchange is expected to see net profit in 2025 increase by 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, based on consensus forecasts from three or more institutions, Longping High-Tech’s net profit attributable to parent in 2026 is expected to grow over 70% year-on-year; Denghai Seed Industry and Dabeinong are both expected to achieve about 40% net profit growth; Haien Technology and Kangnong Seed Industry are forecasted to see net profit increases of 33.33% and 23.48%, respectively.

(Source: Oriental Wealth Research Center)