I. core view
Rating and Strategy: the data of breeding sows in January was slightly lower than expected, the recent loss range of the industry expanded, and the logic of capacity removal and pig price will hit the bottom was strong, maintaining the “optimistic” rating of the breeding sector. Geopolitical tensions and adverse weather effects have not been substantially alleviated. The logic of high food prices outside China is strong, maintaining the “optimistic” rating of the planting sector. Combined with the valuation, continue to focus on the recommendation of pig breeding and yellow feather broiler breeding.
1. Aquaculture industry chain
1) pig industry: maintain the “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 12.48 yuan / kg, down 1.48 yuan per week; Piglets were 25.43 yuan / kg, down 1.98 yuan / kg per week; Binary sows were 32.9 yuan / kg, with a weekly increase of 0.08 yuan / kg. The head of self breeding and autotrophic mode lost 495 yuan, thanks to 159 yuan last week. Pig prices bottomed twice, and there is limited room for further decline. At the end of January, there were 42.9 million fertile sows in China, a decrease of 0.9%, 4.63% higher than the normal population. The speed of capacity removal in the industry has slowed down slightly recently, mainly due to the delay in the elimination of sows by farms due to the rebound of pig prices and the reversal expectation in the second half of the year. It is expected that with the expansion of losses and the intensification of capital chain tension, the subsequent capacity de industrialization will speed up. At present, the judgment on the bottom reversal of production capacity and pig price in the third quarter is maintained. With the correction of stock price, the valuation of the sector moved down below the historical average, highlighting the safety margin and maintaining the “optimistic” rating of the industry. In terms of individual stocks, focus on Muyuan Foods Co.Ltd(002714) and Tecon Biology Co.Ltd(002100) and focus on 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 the “optimistic” 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 banning of the live poultry market will jointly promote the accelerated 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) . On the eve of the reversal of the pig cycle, 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) planting: maintain the “optimistic” rating and focus on Jiangsu Provincial Agricultural Reclamation And Development Co.Ltd(601952) . Geopolitical tensions between Russia and Ukraine have not been substantially eased, and NOAA February data show that La Nina phenomenon is still developing, and bulk grain prices will remain high in the short term. 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. The rating of “952 recommended stocks” was maintained.
2) 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 promotion and listing of genetically modified products will promote the expansion of seed industry market and the optimization of competition pattern. The leading enterprises have the first mover advantage and will gain more 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) .
II. Market Review
The correction of breeding and feed has driven the overall performance of the agricultural sector to be weaker than that of the big market. 1. Last week, the Shenwan agricultural index fell 1.02%. Over the same period, the Shanghai Composite Index rose 0.8%, the Shenzhen Composite Index rose 1.77%, and the overall performance of the agricultural sector was weaker than that of the big market. 2. Specific to the eight secondary sub industries, four recorded an increase and two fell, of which the feed sector fell the most. 3. The top 10 gainers are mainly concentrated in the planting and animal health sector, and the top 10 losers are concentrated in the breeding sector. The top three stocks were Chempartner Pharmatech Co.Ltd(300149) , Joyvio Food Co.Ltd(300268) and Xinjiang Guannong Fruit & Antler Co.Ltd(600251) .
III. industry data
Pigs: in the 7th week, the average ex factory price of pigs in 22 provinces and cities across the country was 12.48 yuan / kg, down 1.48 yuan / kg per week; The average loss of self breeding heads in the main pig producing areas in China was 495.14 yuan. By the end of January 2021, the number of fertile sows in China was 42.9 million, a year-on-year decrease of 3.7%;
Broiler: in the 7th week, the average price of chicken seedlings in Yantai, Shandong Province was 1.34 yuan / feather, with a weekly drop of 0.54 yuan / feather; The average price of white feather meat and wool chicken in front of the shed was 3.9 yuan / kg, with a weekly drop of 0.11 yuan / kg; In the 7th week, the single feather profit of broiler breeding was 0.13 yuan;
Feed: according to the statistics of Boya Hexun, in the 7th week, the average price of broiler feed was 3.87 yuan / kg, unchanged on a weekly basis; The price of fattening pig feed was 3.654 yuan / kg, with a weekly increase of 0.01 yuan / kg;
Aquatic products: in the 7th week, the sea cucumber in Shandong Weihai bulk wholesale market was 196 yuan / kg, unchanged on a weekly basis; The price of scallop is 8 yuan / kg, with a weekly drop of 2 yuan / kg; The price of prawn is 320 yuan / kg, with a weekly drop of 80 yuan / kg; The price of abalone was 100 yuan / kg, unchanged on a week-on-week basis;
Sugar, cotton, corn, soybean meal, wheat and rice: in the 7th week, the spot price of Nanning white sugar was 5678 yuan / ton, down 4 yuan / ton; The price of 328 grade cotton in China was 22893 yuan / ton, with a weekly increase of 51 yuan / ton; The average purchase price of corn in China was 2627 yuan / ton, up 7 yuan / ton per week; The average spot price of soybean meal in China was 4263 yuan / ton, with a weekly increase of 79 yuan / ton; In the 6th week, the average spot price of Chinese wheat was 2877 yuan / ton, up 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
