Core view
[market performance] last week, the CSI 300 index closed at 4601.40 points, up or down 0.82% in one week, up or down – 6.86% year to date; The Shanghai Composite Index closed at 3462.95, up or down 3.02% in one week and – 4.86% year to date. Among the 31 primary industries in Shenwan, the top three rose last week were coal (+ 13.86%), petroleum and Petrochemical (+ 7.98%), and architectural decoration (+ 7.85%); The top three declines were power equipment (- 8.18%), electronics (- 3.32%), medicine and Biology (- 2.73%). The agriculture, forestry, animal husbandry and fishery sector rose or fell 5.26% last week, ranking 12th. Since the beginning of the year, the agriculture, forestry, animal husbandry and fishery sector has increased or decreased by 0.42%, ranking seventh.
[key information]
[State Council: carry out breeding innovation to tackle key problems and strengthen the construction of seed industry base] on February 11, the State Council issued a notice on printing and distributing the plan for promoting agricultural and rural modernization in the 14th five year plan. It is proposed to carry out breeding innovation and tackle key problems. Focusing on key crops, livestock and poultry, we launched the implementation of key core technologies of agricultural seed sources. Accelerate the implementation of major scientific and technological projects of agricultural biological breeding, and orderly promote the industrialized application of biological breeding. In addition, strict variety management, improve the approval standards of major crop varieties, and establish a variety “ID card” system. (source: State Council)
[Key announcement]
[ Tangrenshen Group Co.Ltd(002567) ] live pig sales briefing in January 2022: Tangrenshen Group Co.Ltd(002567) live pig sales in January 2022 were 130400, a year-on-year decrease of 20.44% and a month on month increase of 4.15%; The total sales revenue was 198.7 million yuan, a year-on-year decrease of 39.29% and a month on month decrease of 14.20%. In January 2022, the year-on-year decline in the company’s pig sales was mainly due to the significant decrease in the sales of piglets, and the month on month increase was mainly due to the orderly release of pig production capacity.
[opinion]
After the festival, supply and demand are tight, and pig prices continue to bottom. According to the data of zhuyitong, on February 11, the price of live pigs was 12.27 yuan / kg, with a year-on-year decrease of 13.83%. In terms of regions, pig prices in Northeast China stabilized, while pig prices in other regions showed a downward trend. On the supply side, the number of fattening pigs aged 5 months in October increased by 34% year-on-year, and the listing time corresponds to the supply during the Spring Festival and after the festival. On the demand side, consumer demand is lower than that before the festival. We believe that supply and demand are tight after the festival, and pig prices continue to bottom out.
Carry out breeding innovation, strict variety management, and enterprises with core breeding ability are expected to benefit.
In the 14th five year plan to promote agricultural and rural modernization, we launched the implementation of key core technologies of agricultural seed sources, and established a variety “ID card” system. At the same time, with the revision and formal implementation of relevant approval laws and regulations, we believe that this will help to improve the threshold of seed variety approval, protect the intellectual property rights of seed enterprises with the ability of first mover innovation, and the concentration of seed industry is expected to be further improved.
Investment advice
Pig breeding: the lowest price of pork this week was 12.27 yuan / kg, which was the low level since mid October 2021, significantly lower than the industry cost line, and most pig enterprises were in a state of loss. It is suggested to pay attention to breeding enterprises with significant cost control advantages, loose capital and stable operation.
Seed industry: the implementation of variety approval regulations is imminent, which is expected to be conducive to the intellectual property protection of seed enterprises with first mover innovation ability, and the concentration of seed industry is expected to be further improved. It is suggested to pay attention to seed enterprises with core breeding ability.
Risk tips
Macroeconomic fluctuations; Non plague situation; Extreme weather effects, etc.
