I. Market Review
Agricultural index adjustment, the performance is still better than the market. 1. One week before the Spring Festival, the Shenwan agricultural index fell 2.11%. Over the same period, the Shanghai Composite Index fell 4.57%, the Shenzhen Component Index fell 5%, and the performance of the agricultural sector was better than that of the big market. 2. In terms of breakdown, all the eight secondary sub industries fell, with smaller declines in feed and breeding. 3. The top 10 gainers are concentrated in the aquaculture sector, and the top 10 losers are concentrated in the fishery sector. The top three stocks were Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) , Wens Foodstuff Group Co.Ltd(300498) and Hefei Fengle Seed Co.Ltd(000713) .
II. Investment suggestions
It is expected that after the festival, affected by the weakening demand, the pig price may fall and the industry will accelerate the de capacity. According to the recent pace of de urbanization, the neutral production capacity is expected to bottom out in the third quarter. At that time, the industry will usher in a new round of cyclical rise in pig prices. Continue to be optimistic about the investment opportunities of the aquaculture industry. At present, it still belongs to the bottom layout stage of the cycle, and focus on recommending high-quality leaders with safe valuation.
1. Breeding industry chain: 1) pig breeding: after the festival, the industry may accelerate the reduction of production capacity, continue to be optimistic about the pig breeding sector, and pay attention to the cost leading enterprises with safe operation and reasonable valuation. Last week, a number of listed aquaculture companies released performance forecasts for 2021, and the performance changes basically met expectations. Tecon Biology Co.Ltd(002100) the net profit attributable to the parent company is expected to be a loss of 630-730 million yuan, with a profit of 1.72 billion yuan last year; Jiangxi Zhengbang Technology Co.Ltd(002157) the net profit attributable to the parent company is expected to be a loss of 18.2-19.7 billion yuan, with a profit of 5.744 billion yuan last year; Tech-Bank Food Co.Ltd(002124) the net profit attributable to the parent company is expected to be a loss of 3.5-4 billion yuan, with a profit of 3.24 billion yuan last year. During the Spring Festival, pig prices were adjusted at a low level. It is expected that after the festival, as consumer demand weakens, pig prices may fall. At the end of December, there were 43.29 million fertile sows in China, an increase of 0.76% month on month, 5.58% higher than the normal population. According to official data, the speed of capacity removal in the industry has slowed down. It is expected that after the festival, with the decline of pig prices, the speed of capacity elimination will accelerate. We firmly believe that the production capacity of the industry will reach the bottom in the third quarter, and the pig price will enter the channel of cyclical rise at that time. At present, the market value of the vast majority of pig enterprises is lower than the historical average, and the valuation has a certain margin of safety, maintaining the positive rating of the sector. In terms of individual stocks, focus on Muyuan Foods Co.Ltd(002714) with leading cost and Wens Foodstuff Group Co.Ltd(300498) and Tecon Biology Co.Ltd(002100) , Tangrenshen Group Co.Ltd(002567) with obvious improvement in production indicators. 2) Dynamic insurance: on the eve of the new cycle, the prosperity of pig vaccine was under pressure in the short term, but the static PE was at the bottom of history, the safety margin of valuation was high, and the optimistic rating was maintained. The key recommendation of individual stocks is Wuhan Keqian Biology Co.Ltd(688526) with reasonable valuation and significant growth.
2. Seed industry: the promotion of genetically modified products is imminent, continue to be optimistic about the seed industry, and focus on recommending high-quality seed industry leaders. Since the second half of 2021, transgenic policies have been intensively introduced in the seed industry. It is expected that with the official implementation of the policy, genetically modified corn and soybean seed products will gradually be mass-produced and listed. Affected by the development of transgenic technology, the entry threshold of the industry will be significantly raised, which is not conducive to the development of small and medium-sized enterprises. The leading enterprises are expected to gain more market share in the future because they have the first mover advantage in transgenic R & D and product layout. We believe that under the influence of the development of genetically modified products, the competition pattern of the industry is expected to accelerate the optimization and maintain the industry’s optimistic rating, especially the investment opportunities of corn seed industry with high prosperity. In terms of individual stocks, focus on Shandong Denghai Seeds Co.Ltd(002041) with obvious advantages in germplasm resources and variety combination, and Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Beijing Dabeinong Technology Group Co.Ltd(002385) with leading advantages in transgenic R & D and variety layout. Pay attention to Winall Hi-Tech Seed Co.Ltd(300087) .
III. industry data
Pigs: in the fourth week, the average ex factory price of pigs in 22 provinces and cities across the country was 13.97 yuan / kg, down 0.39 yuan / kg from last week; The average loss of self breeding heads in the main pig producing areas in China was 311.55 yuan. By the end of December 2021, the number of fertile sows in China was 43.29 million, an increase of 4% year-on-year;
Broiler: in the fourth week, the average price of chicken seedlings in Yantai, Shandong Province was 1.5 yuan / feather, up 0.28 yuan / feather from last week; The average price of white feather chicken in front of the shed was 4 yuan / kg, up 0.01 yuan / kg from last week; In the fourth week, the single feather profit of broiler breeding was 0.45 yuan;
Feed: according to the statistics of Boya Hexun, in the fourth week, the average price of broiler feed was 3.82 yuan / kg, unchanged on a weekly basis; The price of fattening pig feed was 3.63 yuan / kg, unchanged on a weekly basis;
Aquatic products: in the 4th week, the sea cucumber in Shandong Weihai bulk wholesale market was 200 yuan / kg, unchanged on a weekly basis; The price of scallops was 12 yuan / kg, unchanged on a week-on-week basis; The price of shrimp was 400 yuan / kg, unchanged on a week-on-week basis; Abalone price was 120 yuan / kg, unchanged from last week; Sugar, cotton, corn, soybean meal, wheat and rice: in the fourth week, the spot price of Nanning white sugar was 5688 yuan / ton, down 22 yuan / ton from last week; In the fourth week, the price of 328 grade cotton in China was 22695 yuan / ton, up 112 yuan / ton from last week; The average purchase price of corn in China was 2630 yuan / ton, up 17 yuan / ton from last week; The average spot price of soybean meal in China was 3782 yuan / ton, up 127 yuan / ton from last week; The average spot price of wheat in China was 2873 yuan / ton, down 4 yuan / ton from last week; The average price of Japonica Rice in China was 2740 yuan / ton, unchanged on a weekly basis;
IV. risk warning
The price changes of raw materials such as sudden epidemic diseases, livestock and poultry, aquatic products and corn are less than expected
