As the Spring Festival effect dissipated, pork prices returned to the decline channel before the festival, and the national average pig grain price ratio was in the secondary warning range for three consecutive weeks. On February 8, the national development and Reform Commission said that it would start the collection and storage of pork reserves with relevant departments as appropriate, and guide local governments to carry out the collection and storage according to regulations.
Due to the sharp decline in pig prices, recently, A-share pig breeding enterprises have given performance forecasts for 2021 that exceed the expected losses. They often lose billions or tens of billions of yuan, and the worst Jiangxi Zhengbang Technology Co.Ltd(002157) huge loss is nearly 20 billion yuan, almost losing all their net assets. The company's share price also fell for two consecutive limits at the beginning of the year of the tiger. Interestingly, the former pig enterprise Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) opened a new track to transform cattle raising, with a pre increase of 3-5 times in performance, successfully avoiding the downward pig cycle.
It is believed that the fluctuation of pig stocks in the breeding period may not be a good catalyst for pig stocks to be sold in the short term, even though the fluctuation of pig stocks in the breeding period is still at the end of the breeding period, and the analysis of pig stocks will not be very good for pig stocks to be sold in the short term.
pig prices fell back to the channel
the national development and Reform Commission stated that it would collect and store
In 2021, the pig production capacity will be further restored. According to the data of the Ministry of agriculture and rural areas, by the end of July 2021, the number of fertile sows and pig stocks in China has been restored to 101.6% and 100.2% respectively at the end of 2017, and the recovery goal will be achieved half a year ahead of schedule.
In contrast to the recovery of production capacity, pork prices have been falling all the way.
According to the data of China pig breeding network, after a high shock for more than a year, the three yuan pig price at home and abroad began to decline all the way from the high near 36 yuan / kg at the end of 2020 to 13 yuan / kg in July last year. By the beginning of October last year, the price of live pigs even fell below 11 yuan / kg to 10.5 yuan / kg, narrowly guarding the 10 yuan mark, down 70%.
Since then, pig prices have rebounded for more than two months in October and November, once returning to above 17 yuan / kg. However, since December, the pig price has turned down again. The rapid decline and the fierce decline have made pig farmers "unexpected". At present, there is no sign of stopping the decline. According to the monitoring of the pig price system of China pig breeding network, the average price of three yuan abroad was 13.95 yuan / kg on February 7, down 0.19 yuan / kg from the previous day and 1.28 yuan / kg from the previous month.
On February 8, the official wechat of the national development and Reform Commission sent a message that the national average pig grain price ratio was 5.57:1 in the week from January 24 to 28, which was between 5:1 and 6:1 for three consecutive weeks, entering the level II early warning range of excessive decline set in the plan for improving the regulation mechanism of government pork reserves and ensuring the supply and price stability of pork market. The national development and Reform Commission will work with relevant departments to start the collection and storage of pork reserves as appropriate, and guide local governments to carry out the collection and storage according to regulations.
On January 17, the national development and Reform Commission announced that from January 10 to 14, the national average pig grain price ratio was 5.75:1, entering the "three-level early warning range of excessive decline". According to the aforesaid purchase and storage plan of the national development and Reform Commission, if the pig grain ratio is lower than 6:1, it is a three-level early warning of excessive decline. At this time, the temporary reserve purchase and storage will not be started temporarily. If it is between 5:1 and 6:1 for three consecutive weeks, it will enter the secondary warning of excessive decline, and the collection and storage will be started according to the situation. The first level early warning is that the pig grain ratio falls below 5:1, and the collection and storage will be started directly at this time.
large pig farmers exceed expected losses
Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) open a cattle track
With the continuous bottom of pork prices last year, the life of pig raising enterprises is naturally difficult. At the end of last month, pig enterprises have predicted the annual performance of 2021, often losing tens of billions.
According to the statistics of the reporter of China Fund News, from the perspective of several "large pig farmers", Tech-Bank Food Co.Ltd(002124) is expected to lose 3.5 billion yuan to 4 billion yuan, New Hope Liuhe Co.Ltd(000876) is expected to lose 8.6 billion yuan to 9.6 billion yuan, Wens Foodstuff Group Co.Ltd(300498) is expected to lose 13 billion yuan to 13.8 billion yuan, and the most outrageous Jiangxi Zhengbang Technology Co.Ltd(002157) is a record, with a pre loss of 18.2 billion yuan to 19.7 billion yuan, becoming the listed pig enterprise with the highest loss in the performance forecast.
For the reasons for the huge loss, Jiangxi Zhengbang Technology Co.Ltd(002157) explained, "During the reporting period, the company carried out strategic transformation, disposed of the inefficient sows purchased at a high price in the early stage, and further optimized the population. In total, there were about 2.2 million dead scouring sows and backup sows, with a loss of 6.2 billion yuan to 6.8 billion yuan. In addition, the loss of prepaid rent, return compensation and materials of the leased farm was about 1.5 billion yuan, with a provision of 1.2 billion yuan.".
As of the third quarter report of 2021, Jiangxi Zhengbang Technology Co.Ltd(002157) has net assets of 13.3 billion yuan, excluding the loss of 7.6 billion yuan in the first three quarters, which means that the maximum possible loss of 12.1 billion yuan in a single quarter in the fourth quarter is almost the loss of the whole net assets, which is at risk of touching the delisting clause. The company's share price directly fell by the limit for two consecutive years at the beginning of the year of the tiger. On February 8, the market deep V reversed, but hundreds of thousands of hand sealed orders were still pressed on the Jiangxi Zhengbang Technology Co.Ltd(002157) limit board.
In the first three quarters of 2021, "Zhumao" Muyuan Foods Co.Ltd(002714) , which was outstanding, also suffered losses in the fourth quarter, ranging from 700 million yuan to 2.2 billion yuan. Listed companies whose main businesses involve pig raising, such as Hunan New Wellful Co.Ltd(600975) , Luoniushan Co.Ltd(000735) , Tangrenshen Group Co.Ltd(002567) , Tecon Biology Co.Ltd(002100) , are all at a loss without exception. It is worth mentioning that the former pig enterprise Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) seems to have foresight. The transformation of cattle breeding has achieved initial results and successfully avoided the downward pig cycle. The company's share price rose 50% against the trend in the whole year under the condition that pork stocks were easily cut back.
According to the announcement of Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) on January 25, the net profit attributable to the parent company in 2021 is expected to be RMB 80 million – 120 million, an increase of 333.06% - 549.59% over the same period of the previous year. In August 2020, Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) controlling shareholder Pengxin Group signed a 100 billion beef cattle industry project with Yunnan government. In addition, the company also invested in Myanmar's cross-border beef cattle industry and opened up the industrial chain of foreign live cattle import.
On January 17, Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) said on the investor interaction platform that in 2022, the company will continue to introduce high-quality imported cattle from abroad. It plans to introduce 1.2 million high-quality fertile cows from abroad for localized breeding and propagation in about five years, forming a stock scale of 2.3 million cows and a stock scale of 2 million cows.
Brokerage: it is the best time window to configure
Looking back on the history of the pig cycle, China has experienced five or six cycles since the new century. A complete "pig cycle" takes almost three years. If we start with the sharp decline in pig prices at the end of 2020, it is expected that pork prices will not pick up significantly until the third and fourth quarters of 2022.
Wens Foodstuff Group Co.Ltd(300498) said in the survey minutes that it is optimistic that pig prices may enter the upward channel after the second half of 2022; It is pessimistic to estimate that the uplink channel of the next cycle will not enter until 2023. The Muyuan Foods Co.Ltd(002714) Secretary Qin Jun had expected that the supply-demand relationship would gradually improve after the second quarter of 2023.
However, many brokerage analysts believe that at present, it is a time window for pork stocks to start layout.
China Galaxy Securities Co.Ltd(601881) researcher Xie Zhiyou believes that although there will be a double bottom in pig prices, the market's positive expectations for the sector have risen, which means that the optimal time point for the allocation of the sector is now. On the whole, the current sector investment risk is low and the safety margin is high, which deserves active and key attention.
Xie Zhiyou's team took the stock price and quarterly net profit of Muyuan Foods Co.Ltd(002714) since 2014 as the data basis. During this period, muyuan had seven quarterly losses. Intervening in individual stocks in the loss quarter of Muyuan Foods Co.Ltd(002714) is the best buying point in each cycle, which can maximize the return on investment. It is assumed that positions will be built successively in the first quarter of 2014 and held to the high point in the cycle, with an increase of 207%; Assuming that positions are built successively in the second quarter of 18 years, the increase during this period can reach 446%.
Therefore, it believes that it is the best layout point for long-term funds to intervene in breeding stocks in the loss season. Of course, there must be fluctuations during the period. "The second best time point is that before the second bottom of pig price, it will be a better time point for allocation, that is, what we call the present". From the perspective of individual stocks, the suggestions of leading enterprises focus on Muyuan Foods Co.Ltd(002714) , Wens Foodstuff Group Co.Ltd(300498) , and the suggestions of flexible targets focus on Fujian Aonong Biological Technology Group Incorporation Limited(603363) , Tecon Biology Co.Ltd(002100) , Tangrenshen Group Co.Ltd(002567) .
Sealand Securities Co.Ltd(000750) also pointed out that the pig price is in the process of the second bottom of the w bottom. At present, the downward space of the pig price is very limited. Factors such as the change of the marketing rhythm of short-term farmers will affect the fluctuation of the pig price. Even if there is a periodic rebound, as long as it is a loss, the stock clearing will continue, and it is still in a very good configuration window period, The decline of fertile sows in the following months will be the catalyst of the pig sector.
