Core view
[market performance] last week, the CSI 300 index closed at 4779.31 points, up or down 1.11% in one week and – 3.26% year to date; The Shanghai Composite Index closed at 3522.57, up or down 0.04% in one week and – 3.22% year to date. Among the 31 primary industries in Shenwan, the top three rose last week were coal (+ 5.50%), computer (+ 4.40%) and bank (+ 4.32%); The top three declines were pharmaceutical and biological (- 7.19%), national defense and military industry (- 5.61%) and basic chemical industry (- 4.32%). The agriculture, forestry, animal husbandry and fishery sector rose or fell – 3.20% last week, ranking 22nd. Since the beginning of the year, the agriculture, forestry, animal husbandry and fishery sector has increased or decreased by – 2.54%, ranking 13th.
[key information]
[nine departments including the national development and Reform Commission encourage platform enterprises to innovate and develop Jiangsu Nonghua Intelligent Agriculture Technology Co.Ltd(000816) ] on January 19, 2022, nine departments including the national development and Reform Commission issued several opinions on promoting the standardized, healthy and sustainable development of platform economy. Encourage platform enterprises to innovate and develop Jiangsu Nonghua Intelligent Agriculture Technology Co.Ltd(000816) , promote the digitization of planting, animal husbandry, fishery and other fields, improve the digitization level of all links of agricultural production, processing, sales, logistics and other industrial chains, improve the Shenzhen Agricultural Products Group Co.Ltd(000061) quality traceability system, and help realize Shenzhen Agricultural Products Group Co.Ltd(000061) high quality and high price with branding and traceability. (source: National Development and Reform Commission)
[Key announcement]
[ Muyuan Foods Co.Ltd(002714) ] annual performance forecast for 2021: operating revenue of 77 billion yuan to 80 billion yuan, net profit of 7 billion yuan to 8.5 billion yuan. The net profit attributable to the parent company was 6.5-8 billion yuan, a decrease of 70.86% – 76.32% over the same period of last year; The net profit deducted from non profits was 7 billion yuan to 8.5 billion yuan, a decrease of 71.90% – 76.86% over the same period of last year; Basic earnings per share: 1.21 yuan / share – 1.5 yuan / share.
[opinion]
Pig prices fluctuated at the bottom, and the capacity removal after the festival is expected to accelerate. According to Yongyi information data, on January 21, the pig price was 14.06 yuan / kg, down 0.28% on a weekly basis. Pig prices in North China and Northeast China are rising. The Spring Festival is approaching, the curing stage of cured meat in the south is coming to an end, and the growth of demand is slower than that in the north. In December 2021, the number of sows capable of breeding reached 43.29 million, a month on month decrease of 0.77%, and the number of commercial pigs increased by 9.85%. After the Spring Festival, farmers may accelerate the process of capacity removal, and it is expected to usher in a cycle reversal in mid-2022.
The overall development of seed enterprises is improving, and the expansion of superior seeds is expected to become the main theme. The State encourages the introduction of excellent germplasm resources, tackling key core technologies of provenance, and accelerating the cultivation and popularization of new varieties. The development environment of leading seed enterprises is expected to be improved. While the sowing area of major crops such as corn is expanded, the improved seed rate is expected to increase, and the scale of high-quality seed market is expected to increase.
Investment advice
Pig breeding: at present, the sales price of pigs has fallen below the industry cost line, and most pig enterprises may fall into a state of loss again. Therefore, it is particularly critical to accelerate the de industrialization of production capacity and control costs. It is suggested to pay attention to breeding enterprises with significant cost control advantages and stable cash flow.
Seed industry: genetically modified seeds have received a series of policy support, and their future market space is broad. Seed enterprises with genetically modified layout will give priority to benefit. It is suggested to pay attention to seed enterprises with first mover advantage and leading technology in the direction of genetically modified.
Risk tips
Macroeconomic fluctuations; Non plague situation; Extreme weather effects, etc.
