Industry perspective:
Consistent expectations lead to centralized marketing, and the pig price is not prosperous in the peak season of the Spring Festival.
In October 2021, the price of live pigs fell to a low point of nearly 10 yuan / kg, and the self breeding and outsourcing piglet fattening entered a huge loss. In late October, the price of live pigs rebounded, and both modes entered profit. The increase in breeding profits has attracted retail investors to start fattening sows and purchased piglets. The Spring Festival is usually the peak season for pork consumption. Retail investors began to sell pork before the Spring Festival. A large number of sales led to the decline of pig prices. Meanwhile, the incidence rate of CSFV increased in the background of the drop of temperature in January, and some pig farms were selling off to reduce losses. Although there is a large consumer demand in the Spring Festival, the rapid increase of supply has led to the phenomenon of low pig prices in the peak season.
After the festival, the pig price continued to fall, the production capacity is expected to be further reduced, and the cycle reversal can be expected.
According to the data of China pig breeding network, on February 9, the selling price of foreign Sanyuan pigs fell to 13.57 yuan / kg, and the self breeding and outsourcing piglet fattening mode entered a state of loss again. The slaughter volume of pigs is usually determined by the number of fertile sows six months ago. Therefore, it can be inferred that the slaughter volume of pigs in February, March, April and may is usually determined by the number of fertile sows in August, September, October and November. Although the number of fertile sows in this stage is reduced, it is still at a high level, and the slaughter volume will remain at a high level in the next second quarter. The low pig price caused by the high slaughter volume will further accelerate the elimination of fertile sows. In the future, the elimination of production capacity will be completed, and the pig price is expected to usher in a cycle reversal.
Investment advice
According to the number of sows that can be bred in the second half of the year, we judge that the number of pigs sold after the Festival remains high. Superimposed on the downward trend of pork consumption in the second quarter, the probability of pig price will face a double bottom in the second to third quarters, and the overall production capacity of the industry is expected to be eliminated. Since the share price of the pig breeding industry generally starts before the pig price, we believe that the current is the golden time to invest in the stocks of the pig breeding industry. It is suggested to pay attention to important factors such as enterprise cost control ability and capital financing ability, especially Muyuan Foods Co.Ltd(002714) , Wens Foodstuff Group Co.Ltd(300498) , Tech-Bank Food Co.Ltd(002124) , Zhejiang Huatong Meat Products Co.Ltd(002840) , and Fujian Aonong Biological Technology Group Incorporation Limited(603363) , Tecon Biology Co.Ltd(002100) , Tangrenshen Group Co.Ltd(002567) , COFCO Jiakang.
Risk tips
The animal epidemic broke out, the demand for pork was less than expected, and the feed cost continued to be high. The breeding retail investors concentrated on the second fattening
