Core view
In 2022, we are optimistic about the recovery of the breeding sector and the resonance between the cycle and growth of the seed industry sector. Specifically:
1) live pigs: according to the announcement of the Ministry of agriculture, as of the end of January, the number of sows that can be bred in China was 42.9 million, a month on month decrease of 0.9%, and the trend of capacity elimination continued. We believe that 2022 is the best stage to lay out the pig sector in advance, because the pig cycle in 2023 is likely to reverse the market. At the same time, meat products benefit from the downward price of pigs, and the profit is expected to further improve in 2022. It is recommended to pay attention. 2) Yellow feather broiler: according to the data of the industry association, the stock of yellow chicken’s parents at the end of 2021 is at the lowest level in three years, and the trend of capacity elimination is still continuing. It is expected that the profit of yellow chicken breeding may improve from 2022. 3) Seed industry: on December 24, 2021, the Standing Committee of the National People’s Congress passed the decision on Amending the seed law of the people’s Republic of China (Draft). This amendment strengthens the protection of new plant varieties by expanding the scope of protection of new plant variety rights, expanding protection links, establishing a substantive derivative variety system, and strengthening the liability for infringement damages. We believe that this will significantly improve the business environment at the supply side of the seed industry, and seed enterprises with innovative R & D strength at the head will benefit from the core. In addition, from the perspective of cycle, the seed industry, as the post grain price cycle, will be in the release channel of performance in the next two years; The improvement of supply and demand structure of corn seeds in China is also expected to usher in the reversal of inventory cycle. In addition, the accelerated landing of GM will bring variety generation changes to the industry, the leading enterprises will usher in the high-speed growth stage of price rise and market share increase, and the industry will usher in the resonance between cycle and growth.
The overall investment view of agriculture is as follows. It is optimistic about breeding and seed industry from top to bottom. Among them, 1) recommendations for pig breeding: Zhejiang Huatong Meat Products Co.Ltd(002840) , Fujian Aonong Biological Technology Group Incorporation Limited(603363) , Leshan Giantstar Farming&Husbandry Corporation Limited(603477) , Tecon Biology Co.Ltd(002100) , Dongrui Food Group Co.Ltd(001201) , COFCO jiajiakang, Muyuan Foods Co.Ltd(002714) , Wens Foodstuff Group Co.Ltd(300498) , etc. it is recommended to pay attention to Henan Shuanghui Investment & Development Co.Ltd(000895) , Longda food, etc; 2) Seed industry recommended Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Shandong Denghai Seeds Co.Ltd(002041) , Beijing Dabeinong Technology Group Co.Ltd(002385) ; 3) Recommended for poultry sector: Jiangsu Lihua Animal Husbandry Co.Ltd(300761) , Hunan Xiangjia Animal Husbandry Company Limited(002982) ; It is suggested to pay attention to the targets of white chicken: Springsnow Food Group Co.Ltd(605567) , Fujian Sunner Development Co.Ltd(002299) , Shandong Yisheng Livestock & Poultry Breeding Co.Ltd(002458) , Shandong Xiantan Co.Ltd(002746) .
Shenzhen Agricultural Products Group Co.Ltd(000061) price tracking
Live pigs: on February 18, the national average price of piglets was 23.97 yuan / kg, an increase of 0.38% over the same period last week; Domestic and foreign Sanyuan pigs decreased to 12.37 yuan / kg, an increase of 1.98% over the same period last week.
Poultry: on February 18, the price of white feather broiler was 7.64 yuan / kg, down 4.98% from the same period last week. On February 11, the average price of medium speed chicken was 7.35 yuan / kg, down 7.43% from the same period last week.
Soybeans: the spot price of Chinese soybeans remained high this week, reaching 5226.32 yuan / ton on February 18.
Corn: the purchase price of corn this week was slightly adjusted at a high level, which was 2631.36 yuan / ton on February 18.
Risk tips:
Uncertainty risk caused by bad weather; Potential risks caused by uncontrollable animal outbreaks.
