Breeding sector: 1) pigs: the total price of feed is high, the pressure of breeding cost increases, the degree of loss deepens, and the expectation of capacity deregulation is further strengthened. Continue to pay attention to the layout on the left. On January 31, 2022, the price of Sanyuan pig abroad fell to 13.8 yuan / kg, down 1.4% on a weekly basis and 60.0% on a year-on-year basis; By December 2021, China had 43.29 million fertile sows in stock, with a month on month increase of 0.8% and a year-on-year increase of 4.0%. On January 21, 2022, the profit of outsourcing piglet breeding was 2.44 yuan / head, which fell month on month, while the profit of self breeding was -336.7 yuan / head, which suffered losses for eight consecutive weeks and continued to expand. In addition, the higher price of soybean meal led to high feed costs, and the national average pig grain price was between 5:1-6:1 for three consecutive weeks, Enter the level II warning range of excessive decline set in the plan for improving the regulation mechanism of government pork reserves and ensuring supply and price stability in the pork market. The national development and Reform Commission said it would start the collection and storage of pork reserves with relevant departments as appropriate. We believe that under the background of increasing losses, the industry’s willingness to make up the market is low, and there is a trend of high-efficiency binary sows replacing low-efficiency ternary sows in the change of production capacity structure. In the process of the second bottom of pig prices, the de industrialization of production capacity will continue, and we will continue to focus on the layout on the left side. In the future, considering multiple factors such as the scale and certainty of the market and the elastic space for cost decline, it is recommended to pay attention to the pig sector: Wens Foodstuff Group Co.Ltd(300498) Tecon Biology Co.Ltd(002100) 、 Fujian Aonong Biological Technology Group Incorporation Limited(603363) 、 Muyuan Foods Co.Ltd(002714) 。 2) Poultry: the chicken price remains high in the short term, the relatively low production capacity supports the price, and the layout opportunities on the right are highlighted. In terms of yellow feather chicken, the average price of fast big chicken, medium speed chicken, native chicken and black bone chicken was 7.50 yuan / 7.94 yuan / 9.50 yuan / 7.69 yuan / 500g respectively on February 11, 2022, with a week-on-week change of – 5.8% / – 6.0% / + 1.9% / – 2.5% respectively and a year-on-year change of + 4.31% / + 8.62% / + 9.45% / – 10.27% respectively. The price was at a significant high before and after the Spring Festival. At the same time, according to the data of the poultry branch of China Animal Husbandry Association, the stock of yellow feather chicken parents has basically decreased to the normal level in 2018. The supply contraction trend has strongly supported the chicken price. It is expected that the consumption peak seasons such as 2022q2 and May Day holidays will come or continue to support the national chicken price. In the reversal market of Huangji, we are optimistic about the industry leader with good cost control ability and growth. The key recommendations are: Jiangsu Lihua Animal Husbandry Co.Ltd(300761) , and the suggestions are: Wens Foodstuff Group Co.Ltd(300498) , Hunan Xiangjia Animal Husbandry Company Limited(002982) . 3) Beef cattle breeding: in September 2020, the general office of the State Council issued the opinions on promoting the high-quality development of animal husbandry, which put forward the goal of “maintaining the annual self-sufficiency rate of beef and mutton at about 85%. There is a large gap between supply and demand in the industry. Pay attention to the opportunities of large-scale beef cattle breeding. It is suggested to pay attention to: Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) .
Dynamic insurance sector: the policy is clear to promote the market-oriented and standardized development of the industry, and the leader of R & D + production + market advantage will benefit. Under the background of the effective promotion of the policy of “fight first and then supplement” and the gradual and complete abolition of the policy of political seedling collection in 2025, veterinary biological products usher in the era of market-oriented development; Since July 2020, there has been a comprehensive “ban on resistance” in feed, and “limit resistance” and “reduce resistance” in breeding. The demand for high-end therapeutic veterinary chemicals has ushered in rapid growth; The code for quality management of veterinary drug production (revised in 2020) was issued on April 21, 2020 and will be implemented from June 1, 2020. By May 31, 2022, the backward industry capacity that has not reached the new target has not been reached or has been eliminated, the industry access threshold has been raised, and the competition pattern is expected to be optimized rapidly. In the medium and long term, industry leaders with the advantages of joint research and development of front-end scientific research institutes + high-quality production capacity + market channels are expected to make full profits. Key recommendations: China Animal Husbandry Industry Co.Ltd(600195) – market seedlings and high-end chemical drugs support high performance growth. It is suggested to pay attention to: Jinyu Bio-Technology Co.Ltd(600201) , Hvsen Biotechnology Co.Ltd(300871) , Tianjin Ringpu Bio-Technology Co.Ltd(300119) .
Seed industry sector: the seed industry is in high prosperity, and the era of transgenic commercialization may accelerate, focusing on long-term layout opportunities. The emphasis on food security continued to rise, and the action plan for the revitalization of seed industry was adopted in July 2021; In November 2021, the Ministry of agriculture and rural areas issued the decision of the Ministry of agriculture and rural areas on amending some seed industry regulations (Draft for comments), adding relevant rules on the approval of genetically modified crop varieties; On December 26, China’s rural work conference once again proposed “vigorously promoting seed sources and other key agricultural core technologies”. As an important prerequisite for food security, seed industry security has clear industrial policy direction, the expansion space of transgenic breeding can be expected, and the leader of breeding technology advantage is expected to benefit. It is suggested to pay attention to: Shandong Denghai Seeds Co.Ltd(002041) , Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Winall Hi-Tech Seed Co.Ltd(300087) .
Risk tips: sudden epidemics or natural disasters, repeated covid-19 epidemics, and the implementation progress of industrial policies is less than expected
