Core view
In January, CPI rose year-on-year, while pig prices fluctuated downward. In January, China's CPI increased by + 0.9% year-on-year, of which food prices were - 3.8% year-on-year and pork in food was - 41.6% year-on-year. CPI was + 0.4% month on month. During this period, pork prices were in a downward range, affecting CPI pork by - 2.5% month on month. In December, China Shenzhen Agricultural Products Group Co.Ltd(000061) imported US $19.937 billion, a year-on-year increase of + 15.49%, exported US $8.895 billion, a year-on-year increase of + 17.7%, and had a trade deficit of US $11.043 billion, a year-on-year increase of + 13.78%.
In February, the pig price fluctuated downward, reproducing a very deep loss every month. For the opportunity of 22 years in the agricultural industry, we firmly recommend the pig cycle. The core view is that in the bottom stage of the pig cycle, the deep loss period is the best time to layout breeding stocks. From the perspective of expectation, there will be no worse expectation. The risk of breeding stocks has been released in large quantities, and the safety margin is very high. With the decline of the number of fertile sows and the decline of pig prices again, the production capacity continues to clear, which is good for the industry to meet the dawn. Based on our judgment of the second bottom of 22q2-3, 22q1 is expected to be the second best time point for the layout of breeding stocks. On February 25, the average price of pigs in 22 provinces and cities across the country was 12.45 yuan / kg, a month on month increase of - 0.24%. From the point of view of the end of breeding, the output of sows was - 9.2 million, with a year-on-year ratio of - 1.9%. From the demand side, consumption is in the off-season. From the multiple indicators we tracked, the pig cycle is still in the process of double bottoming. Even though many voices believe that the second bottom / inflection point may be delayed (to 23 years), we observe from the aspects of sows, piglets, profits, weight and so on. The data trend is still in our changing trend, waiting for the reversal of the 22-year cycle.
The price of yellow chicken fluctuated at a high level, and the production capacity was cleared. According to xinmu.com, the national average price of yellow chicken was 7.35 yuan / kg on February 24, down from - 5.34% at the end of January. At present, it is in the stage of high shock. Based on the analysis of the stock of Huangji's grandparents, parents and prices, we believe that the current stock of parents is close to the 18-year average and is in the process of accelerating clearing, and it is expected that the current production capacity of 22h2 will be at an inflection point. At the level of breeding cost, the prices of raw materials such as corn and soybean meal are high. It is expected that the high cost end in 22 years will be relatively stable. The price recovery will be brought about by the superposition of the decline of production capacity, and the performance of breeding enterprises can be improved.
Since the beginning of the year, the performance of the sector is stronger than that of the Shanghai and Shenzhen 300, and the decline of livestock and poultry breeding is relatively large. From the beginning of the year to February 24, the agriculture, forestry, animal husbandry and fishery sector is - 5.59%, and the Shanghai and Shenzhen 300 is down 8.27% in the same period. All sub industries of agriculture, forestry, animal husbandry and fishery fell, with the largest decline (- 10.57%), followed by livestock and poultry breeding and Shenzhen Agricultural Products Group Co.Ltd(000061) processing, with - 9.16% and - 6.13% respectively.
It is suggested that the second best time for the layout of breeding stocks is expected to be 22q1, focusing on Muyuan Foods Co.Ltd(002714) , Tangrenshen Group Co.Ltd(002567) , Fujian Aonong Biological Technology Group Incorporation Limited(603363) , Tecon Biology Co.Ltd(002100) , Wens Foodstuff Group Co.Ltd(300498) , etc. The price of yellow chicken goes up, focusing on the leading Jiangsu Lihua Animal Husbandry Co.Ltd(300761) . The concentration of feed industry has increased, leading enterprises have the advantage of supply chain, and pay attention to Guangdong Haid Group Co.Limited(002311) . Focus on animal vaccines α Elastic Pulike Biological Engineering Inc(603566) .
Risk tips: the risk of pig price falling short of expectations, epidemic risk, raw material price fluctuation risk, etc.
