1. As all funds have issued their Q4 2008 reports, we hereby make an analysis on funds holding change of heavyweights in agricultural shares between Q3 and Q4 2008.
2. The industry maintains low allocation, yet its proportion ascends. In accordance with categories by CRSC, total equity of funds holding in agricultural industries accounts for 0.66% of the whole market value (the circulation market value of agricultural industry makes up 1.29% of the whole A-share market); the industry continues low allocation at 0.64%. Funds hold agricultural stocks of 69.99mn shares, 12.34% more than that of Q3 2008; funds hold heavyweights in agricultural shares of Rmb704mn, up by 13.63% than that of the previous quarter.
3. Upstream companies or those with low valuation call attentions to funds heavyweights. We draw two thoughts from detailed analysis on agricultural heavyweights in Q4 2008: 1) To follow favorable policies, and allocate upstream companies with explicit theme investment; 2) Quality companies with advantageous valuation like Shandong Homey Aquatic Development (600467), Beijing Shunxin Agriculture (000860) and Dalian Tianbao Green Foods (002220).
4. It is suggested that investors adopt standard layout in agriculture in Q1 2009. Viewed from heavy funds allocation in Q4 2008 and periodic hikes of agricultural shares, we hold that Q1 2009 is still good timing for “theme investment” in agriculture sector. We advise investors focus on listed companies benefiting from related policies and price hikes of agricultural products.