In 2021q4, the mainstream listed pig enterprises made losses as scheduled, and the valuation was at the bottom of history.
① pig prices rose by 1.3% on a weekly basis. On Friday, the national pig price was 13.78 yuan / kg, up 1.3% on a weekly basis; On January 30, the average wholesale price of pork in China was 22.08 yuan / kg, with a slight increase of 0.1% on a weekly basis. Before the Spring Festival, the loss of self bred pigs was 311.55 yuan / head, and the profit of outsourcing piglet breeding was 7.77 yuan / head. ② The proportion of pigs born in a week was flat, and the proportion of pigs born in a week was low. According to the data disclosed by Yongyi consulting (1.21-1.26): the proportion of domestic pigs in 90kg nationwide accounted for 10.47%, and the weekly link ratio decreased by 0.16 percentage points. It has decreased for two consecutive weeks, and the epidemic situation is relatively controllable; The market price of 15kg piglets in the scale farm this week was 399 yuan / head, which was flat on a weekly basis, up 159% from 154 yuan / head at the bottom, and the price of 50kg binary sows was 1648 yuan / head, which was flat on a weekly basis, up 33% from 1238 yuan / head at the bottom. ③ 2021q4 mainstream listed pig enterprises lost money. The major listed pig enterprises have successively announced the performance forecast for 2021. Except for the profit of Muyuan Foods Co.Ltd(002714) of RMB 6.5-8 billion, COFCO Jiakang has not yet announced, other pig enterprises have suffered losses, from low to high, Beijing Dabeinong Technology Group Co.Ltd(002385) 2.3-4.5, Tiankang 6.3-7.3, Shenzhen Kingsino Technology Co.Ltd(002548) 8.2-9.95, Tangrenshen Group Co.Ltd(002567) 9.8-11.5, aonong 10.8-12.8, tianbang 3.5-4 billion, New Hope Liuhe Co.Ltd(000876) 86-96, Wenshi 13-13.8 billion Zhengbang 18.2-19.7 billion yuan; The losses of mainstream pig enterprises in 2021q4 from low to high are muyuan 2-17, Beijing Dabeinong Technology Group Co.Ltd(002385) 3.37-5.57, Tiankang 4.37-5.37, Shenzhen Kingsino Technology Co.Ltd(002548) 5.28-7.0, aonong 5.77-7.77, Tangrenshen Group Co.Ltd(002567) 5.82-7.52, tianbang 8-13, New Hope Liuhe Co.Ltd(000876) 22-32, Wenshi 33-41 and Zhengbang 105.7-120.7.
In addition to the impact of the low pig price, the performance loss is also related to the high cost caused by inventory impairment, the elimination of inefficient sows and the return of leased pig farms. ④ The inflection point of the pig cycle still needs to be observed. The valuation of mainstream companies is in the bottom area, which can change time for space. From July to December 2021, although the stock of fertile sows decreased by more than 7% month on month, the inflection point of pig price may appear in 2023: I) since late October 2021, the prices of piglets and breeding pigs have rebounded sharply, and the recent decline in pig price has not led to a significant decline in the enthusiasm of filling the stock. The change of stock of fertile sows in the later stage still needs to be observed; II) since the beginning of 2021, inefficient sows have been cleared and the efficiency of breeding pigs has been continuously improved; III) from 2020 to 2021, a huge amount of pork imports need to be digested for two consecutive years; IV) mainstream listed pig enterprises plan to increase by more than 30% in 2022. The cost of 10000 pig farms and ordinary farmers is concentrated at 13 yuan / kg, and it is difficult to form effective elimination when the pig price is higher than 13 yuan / kg. We maintain our previous judgment that if there is no serious epidemic in the pig industry, the pig price will be relatively low in 2022, and the inflection point may appear in 2023. We estimate the average market value of pig enterprises with the expected slaughter volume in 2022, Wens Foodstuff Group Co.Ltd(300498) 5444 yuan, Muyuan Foods Co.Ltd(002714) 4788 yuan, Jiangxi Zhengbang Technology Co.Ltd(002157) 1862 yuan, Tech-Bank Food Co.Ltd(002124) 2280 yuan and COFCO Jiakang 2099 yuan; Compared with the lowest point in history, Wen’s 59%, muyuan 46%, Zhengbang 26%, tianbang 9% and COFCO Jiakang 27%. The valuation of mainstream listed pig enterprises is in the bottom area, so it is recommended to pay active attention.
The price of white feather chicken was flat on a weekly basis, while the price of yellow feather was mixed on a weekly basis.
① the price of white feather chicken products was flat on a week-on-week basis. On January 28, the price of white feather chicken was 9750 yuan / ton, unchanged on a weekly basis. In 2021, there were 1.2462 million sets of ancestral chicken seedlings in China, with a year-on-year increase of 24.3%. The sales volume of parental chicken seedlings was 63.6572 million sets, with a year-on-year increase of 6%. We maintain our previous judgment that the ancestral renewal of white feather broilers will be 1 million units in 2020, a year-on-year decrease of 18%, and the price of white feather broilers is expected to stabilize and recover in 2022; In 2021, the national ancestral renewal volume increased significantly year-on-year, and the chicken price may decline in 2023. ② Yellow feather chicken prices rose and fell week on week. Affected by covid-19 epidemic, increased production capacity and other factors, the loss degree of yellow feather broiler industry in 2020 is second only to that in 2013 impacted by the “human infection h7n9 epidemic”, and the stock in the ancestors began to decline from the middle of 2020. From 2020 to 21, the yellow feather chicken industry suffered an overall loss, and the industry continued to lose production capacity. The price of yellow feather chicken is expected to rise moderately in 2022. On January 26, the average price of yellow feather broiler and fast big chicken was 7 yuan / kg, up 7% on a weekly basis and 1.9% on a year-on-year basis; The average price of medium speed chicken was 7.35 yuan / kg, up 6.7% on a weekly basis and 15.2% on a year-on-year basis; The average price of native chicken was 8.21 yuan / kg, down 4.2% month on week and 0.1% year-on-year; Black bone chicken was 7.7 yuan / kg, up 6.5% on a weekly basis and down 8.3% year-on-year.
The commercialization of GM is gradually approaching, and we continue to pay attention to the leader of seed industry.
The commercialization of genetically modified crops is gradually approaching. The Ministry of agriculture and rural areas has carried out industrialization pilot projects for herbicide resistant genetically modified soybeans and insect resistant and herbicide resistant genetically modified maize that have obtained production and application safety certificates. At present, good progress has been made: first, the pilot genetically modified varieties have excellent characteristics and obvious advantages of cost saving and efficiency increasing. The weeding effect of genetically modified soybeans is more than 95%, which can reduce the weeding cost by 50%, Increase production by 12%; The control effect of transgenic maize on Spodoptera meadowi can reach 95%, which greatly reduces the cost of pest control; At the same time, the content of mycotoxin in transgenic maize grain is low and the quality is good; Second, the pilot genetically modified soybeans and corn have no adverse impact on the production environment. Planting GM maize reduces pesticide use and promotes biodiversity. We judge the impact as follows: I) GM corn seeds may be sold in the second half of 2023. The draft of amendments to the regulations of four departments, including the measures for the examination and approval of major crop varieties, may be approved at the beginning of this year. According to the revised draft, if it is within the scope of suitable planting area, it is only necessary to conduct one-year productive experiment. Therefore, seed production can be carried out as soon as 2023, and sales will begin in the second half of 2023. II) the corn seed industry is expected to usher in capacity expansion. The promotion area of genetically modified maize in China is expected to reach 400-500 million mu. If the gene patent fee of 10 yuan per mu can correspond to a revenue of 4-5 billion yuan, the maize seed industry is expected to usher in capacity expansion. III) seed industry leaders are expected to fully benefit. Beijing Dabeinong Technology Group Co.Ltd(002385) , Yuan Longping High-Tech Agriculture Co.Ltd(000998) have obtained biosafety certificates for genetically modified maize traits; Shandong Denghai Seeds Co.Ltd(002041) has high-quality maize germplasm resources, and the quality of germplasm resources is very important to the quality of transgenic varieties; As a global agricultural technology giant and China’s national seed industry team, Syngenta ranks third in seed business and first in plant protection business in the world. It is one of the companies with the richest seed product portfolio in the world. Syngenta has developed more than 6000 seed products with independent intellectual property rights, and established more than 100 breeding and germplasm improvement centers in major seed markets around the world, The annual R & D cost is nearly 10 billion yuan.
We judge that Beijing Dabeinong Technology Group Co.Ltd(002385) , Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Shandong Denghai Seeds Co.Ltd(002041) and Syngenta are expected to stand out in the commercialization process of China’s transgenic seed industry. As it will take time for production experiment, variety approval and performance fulfillment, we judge that the seed industry sector will fluctuate upward. China’s pet market has great potential, and the epidemic has dragged down the gradual end.
From 2010 to 2020, the compound annual growth rate of China’s pet consumption market was as high as 30.9%; In 2020, the scale growth of China’s pet consumption market slowed down to 2% and maintained single digit growth in 2021. We believe that the main reason for the slowdown in 2020-2021 is that the outbreak of covid-19 epidemic has significantly increased the downward pressure on the economy and delayed the entry of potential PET consumers into the market. However, from the medium and long-term perspective, the penetration rate of pets in China is 17%, while that in the United States, Australia, the United Kingdom and Japan is as high as 68%, 62%, 45% and 38% respectively; The annual consumption expenditure of pet dogs and cats in China is US $869 and US $679 respectively, which are lower than that of major pet breeding countries. China’s pet consumption market has great growth potential. From the perspective of the company, Yantai China Pet Foods Co.Ltd(002891) is affected by exchange and Petpal Pet Nutrition Technology Co.Ltd(300673) is affected by the shutdown of factories in Vietnam. We continue to recommend Yantai China Pet Foods Co.Ltd(002891) and Petpal Pet Nutrition Technology Co.Ltd(300673) .
Risk tips
Non plague out of control; Prices fell more than expected.
