I. core view
The boom of the breeding industry chain is about to hit the bottom and reverse, and the boom of the planting industry chain continues to be high, maintaining the “optimistic” rating of the agriculture, forestry, animal husbandry and fishery sector. In terms of sub industries, combined with economic changes and valuation, the pig breeding and yellow feather broiler breeding industries are mainly recommended.
1. Aquaculture industry chain
1) pig industry: maintain optimistic rating, and focus on Muyuan Foods Co.Ltd(002714) and Tecon Biology Co.Ltd(002100) . Last week, the average price of pigs in 22 provinces and cities was 13.96 yuan / kg, down 0.01 yuan per week; The average price of piglets was 27.41 yuan / kg, up 0.44 yuan per week; The average price of binary sows was 32.82 yuan / kg, down 0.25 yuan per week. Pig prices are in the process of secondary bottoming, and there is limited room for further decline in the future. At the end of December, there were 43.29 million fertile sows in China, an increase of 0.76% month on month, 5.58% higher than the normal population. The industry’s production capacity is in the process of de industrialization. Although the speed has slowed down recently, the process has not stopped. It is expected to accelerate again with the expansion of industry losses and the intensification of capital chain tension. At present, we maintain our judgment on the bottom reversal of production capacity and pig price in the third quarter. Although the stock price rebounded recently, the valuation is still below the historical average, with a high margin of safety, maintaining the “optimistic” rating of the industry. In terms of individual stocks, focus on Muyuan Foods Co.Ltd(002714) with leading cost and Tecon Biology Co.Ltd(002100) with diversified operation, and pay attention to Wens Foodstuff Group Co.Ltd(300498) , Tangrenshen Group Co.Ltd(002567) , Shenzhen Kingsino Technology Co.Ltd(002548) and Fujian Aonong Biological Technology Group Incorporation Limited(603363) .
2) yellow chicken industry: maintain a positive rating and focus on Jiangsu Lihua Animal Husbandry Co.Ltd(300761) . In January, the price of Lihua yellow chicken was 14.46 yuan / kg, with a monthly increase of 0.26 yuan / kg; Wen’s yellow chicken sold for 13.98 yuan / kg, down 0.62 yuan per month. The price of yellow chicken has been above the cost line since the fourth quarter of 2021, and is expected to remain stable in the next 1-2 quarters. In the medium and long term, environmental constraints and the ban on the live poultry market will accelerate the withdrawal of small and medium-sized production capacity, and the competition pattern of the industry is expected to continue to be optimized. Maintain the “optimistic” rating of the industry, focus on Jiangsu Lihua Animal Husbandry Co.Ltd(300761) , and pay attention to Wens Foodstuff Group Co.Ltd(300498) and Hunan Xiangjia Animal Husbandry Company Limited(002982) .
3) dynamic insurance: give a good rating, with emphasis on Wuhan Keqian Biology Co.Ltd(688526) . The night before the pig cycle reversal, the prosperity of pig vaccine was under short-term pressure. In the medium and long term, the improvement of large-scale breeding level, the iteration of product technology upgrading and the listing of new products will drive the expansion of the animal protection market. At the same time, the new GMP certificate certification, feed prohibition and breeding restriction, as well as the improvement of the biological security level of the breeding industry will promote the reform of the animal protection industry and optimize the competition pattern. At present, the industry valuation is at the bottom of history and the safety margin is high, so it is given a good rating. Individual stocks mainly recommend Wuhan Keqian Biology Co.Ltd(688526) with reasonable valuation and R & D advantages.
2. Planting industry chain
1) seed industry: maintain the “optimistic” rating, focusing on Shandong Denghai Seeds Co.Ltd(002041) and Yuan Longping High-Tech Agriculture Co.Ltd(000998) . The policy of seed industry is in the process of continuous strengthening. What we can expect is the No. 1 central document. In the medium and long term, the upcoming promotion and listing of genetically modified products will promote the expansion of seed industry market and the optimization of competition pattern. Enterprises will have more first mover market share in the future. Maintain the long-term “optimistic” rating of the industry, focusing on the investment opportunities of corn seed industry with high prosperity. In terms of individual stocks, focus on Shandong Denghai Seeds Co.Ltd(002041) , Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Beijing Dabeinong Technology Group Co.Ltd(002385) .
2) planting: maintain the “optimistic” rating and focus on Jiangsu Provincial Agricultural Reclamation And Development Co.Ltd(601952) . Bulk grain prices are at a high and strong operation stage, and are expected to continue in the next 1-2 quarters under the background of geopolitical tensions, rising crude oil prices and adverse weather affecting agricultural production in major producing countries in South America. In the medium and long term, under the protection of the policy tone of ensuring primary Shenzhen Agricultural Products Group Co.Ltd(000061) supply and comprehensively promoting rural revitalization, the food price center is expected to move upward gradually. Maintain the long-term “optimistic” rating of the industry, and focus on individual stocks Jiangsu Provincial Agricultural Reclamation And Development Co.Ltd(601952) .
II. Market Review
The agricultural sector rose sharply, which was significantly better than the big market. 1. Last week, the Shenwan agricultural index rose 5.26%. Over the same period, the Shanghai Composite Index rose 3.01% and the Shenzhen Component Index fell 0.77%. The performance of the agricultural sector was significantly better than that of the big market. 2. In terms of breakdown, all eight secondary sub industries rose, with aquaculture, planting and animal protection leading the rise. 3. The top 10 gainers are mainly concentrated in the aquaculture sector, and the top 10 losers are mainly concentrated in the fishery sector. The top three stocks were Shenzhen Kingsino Technology Co.Ltd(002548) , Fujian Aonong Biological Technology Group Incorporation Limited(603363) and Hunan New Wellful Co.Ltd(600975) .
III. industry data
Pigs: in the 6th week, the average ex factory price of pigs in 22 provinces and cities across the country was 13.96 yuan / kg, with a weekly drop of 0.01 yuan / kg; The average loss of self breeding heads in the main pig producing areas in China was 336.7 yuan. By the end of December 2021, the number of fertile sows in China was 43.29 million, an increase of 4% year-on-year;
Broilers: in the 4th week, the average price of chicken seedlings in Yantai, Shandong Province was 1.5 yuan / feather, with a weekly increase of 0.28 yuan / feather; The average price of white feather chicken in front of the shed was 4 yuan / kg, with a weekly increase of 0.01 yuan / kg; In the fourth week, the single feather profit of broiler breeding was 0.41 yuan;
Feed: according to the statistics of Boya Hexun, the average price of broiler feed was 3.87 yuan / kg in the sixth week, with a weekly increase of 0.05 yuan / kg; The price of fattening pig feed was 3.64 yuan / kg, with a weekly increase of 0.01 yuan / kg; Aquatic products: in the 6th week, the sea cucumber in Shandong Weihai bulk wholesale market was 196 yuan / kg, down 4 yuan / kg from last week; The price of scallop is 10 yuan / kg, with a weekly drop of 2 yuan / kg; The price of shrimp was 400 yuan / kg, unchanged on a week-on-week basis; The price of abalone is 100 yuan / kg, with a weekly drop of 20 yuan / kg; Sugar, cotton, corn, soybean meal, wheat and rice: in the sixth week, the spot price of Nanning white sugar was 5682 yuan / ton, down 6 yuan / ton; The price of 328 grade cotton in China was 22842 yuan / ton, with a weekly increase of 147 yuan / ton; The average purchase price of corn in China was 2620 yuan / ton, down 11 yuan / ton in the week; The average spot price of soybean meal in China was 4184 yuan / ton, with a weekly increase of 363 yuan / ton; In the fourth week, the average spot price of Chinese wheat was 2873 yuan / ton, down 4 yuan / ton per week; The average price of Japonica Rice in China was 2740 yuan / ton, unchanged on a weekly basis;
IV. risk warning
The price changes of raw materials such as sudden epidemic diseases, livestock and poultry, aquatic products and corn are less than expected
