Event: in February 22, 2022, the CPC Central Committee and the State Council issued the opinions on doing a good job in promoting the key work of Rural Revitalization in 2022, No. 1 central document of 2022. The document makes specific strategic arrangements for rural reform and agricultural development, highlighting the important position of the work of “agriculture, rural areas and farmers”.
Key investment points:
It is of great significance to do a good job in the work of “agriculture, rural areas and farmers”. The “opinions” mainly pointed out that it is necessary to ensure stable agricultural production and increase production, steady increase of farmers’ income and stability and tranquility in rural areas, fully promote new progress in Rural Revitalization and accelerate new steps in agricultural modernization. At a time when the epidemic continued to spread in the 21st century, global inflation accelerated, the economy became increasingly fragile, the challenge of climate change was prominent, and the expectation of rising food prices was strengthened, in order to cope with the changes of the century and promote the stable and healthy development of China’s economy and society, doing a good job in “agriculture, rural areas and farmers” has become a top priority.
The seed industry is expected to continue to benefit from the policy support of “Document No. 1”. The opinion defines two bottom line tasks, namely, ensuring national food security and preventing large-scale poverty return. It specifically points out to ensure the stability of grain sowing area, maintain the output at more than 1.3 trillion kg, improve the unit yield and quality of grain, and strictly abide by the red line of 1.8 billion mu of cultivated land. The Opinions also pointed out that we should fully implement the action plan for the revitalization of the seed industry, start major agricultural biological breeding projects, implement the new seed law, and severely crack down on illegal and criminal acts such as license infringement. China’s clear requirements for the stability of grain sowing area and the improvement of unit yield level are expected to continue to drive the upward trend of the seed industry chain. There is still a large gap between the unit yield level of corn, soybeans and other crops in China and the developed countries in the world. Under the goal of realizing the scientific and technological self-reliance of the seed industry, ensuring national food security and improving the unit yield level of grain, promoting the implementation of biological breeding technology has become an inevitable development trend. At the end of 2021, China has passed the “new seed law”, which further strengthens the protection of intellectual property rights in the seed industry and encourages the innovation and breakthrough of breeding technology in the industry. The seed industry sector is expected to continue to benefit from the policy support of the “No. 1 document”. If the relevant systems are introduced smoothly, it will be of great significance to the seed industry enterprises that have obtained the genetically modified safety certificate in the early stage.
Promote the large-scale process of pig breeding industry. The opinions pointed out that long-term support policies for stabilizing pig production, stabilizing basic production capacity and preventing production from ups and downs; Encourage the development of new breeding facilities such as industrialized intensive breeding and three-dimensional ecological breeding. China is the largest pork consumer in the world. It plays an important role in promoting the large-scale process of pig breeding industry in order to ensure the “vegetable basket” supply of Chinese residents, stabilize the supply of pigs in the market, prevent drastic fluctuations in pig prices. At present, China’s pig breeding industry is still in the market pattern of large industries and small companies. Promoting the large-scale development of the industry is conducive to improving the industry concentration, stabilizing the change of pig supply in the market and smoothing the periodicity of the industry. At present, China’s pig industry is at the bottom of the cycle. With the stop and stabilization of pig prices, the head company is expected to take the lead in benefiting after the industry ushers in a new cycle.
The boom of the agricultural sector is rising, and attention is paid to two main investment lines. It can be seen from the opinions that the status of agriculture in China can not be ignored. At present, the industry is in a reasonable valuation range. With the intensive introduction of seed industry policies and the pig industry gradually coming out of the bottom cycle, the industry is expected to usher in the improvement of valuation. It is suggested to pay attention to the two main investment lines of the seed industry expected by the policy and the pig breeding sector expected to usher in the cycle reversal. The relevant listed companies are Beijing Dabeinong Technology Group Co.Ltd(002385) , Shandong Denghai Seeds Co.Ltd(002041) , longpinggao, Muyuan Foods Co.Ltd(002714) , Tecon Biology Co.Ltd(002100) .
Risk warning: the risk that the commercialization policy of biological breeding is not as expected; The risk of large fluctuations in pig prices; natural disaster.
