I. core view
Rating and Strategy: Document No. 1 highlights the bottom line thinking of food security, and the importance of the food industry has been highly concerned. Affected by the heating up of geographical conflicts, grain prices outside China have the power to continue to rise in the short term, maintaining the medium and long-term “optimistic” rating of the planting sector. The huge losses of the industry are unsustainable, and the logic of pig production capacity and pig price cycle reversal is strong, maintaining the “optimistic” rating of the breeding sector. The valuation and cost performance of the breeding sector have increased, and the pig breeding and yellow chicken breeding sectors continue to be recommended.
1. Aquaculture industry chain
1) pig industry: maintain the “optimistic” rating, focusing 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 12.45 yuan / kg, down 0.03 yuan per week; Piglets were 25.23 yuan / kg, down 0.2 yuan / kg per week; Binary sows were 32.8 yuan / kg, down 0.1 yuan / kg a week. The head of self breeding and autotrophic model lost 481 yuan, 14 yuan less than 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 deregulation of industrial capacity has slowed down slightly recently, but huge losses and tight capital chain are unsustainable, and the follow-up may be accelerated. 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 average market value of individual stock heads and other indicators moved down below the historical average, and the valuation safety margin was high. Compared with other sectors, the valuation cost performance increased, maintaining the “optimistic” rating of the sector. In terms of individual stocks, we recommend Muyuan Foods Co.Ltd(002714) and Tecon Biology Co.Ltd(002100) , and pay attention to 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 recommend 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, mainly recommend 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. Stocks with reasonable valuation and R & D advantages are recommended Wuhan Keqian Biology Co.Ltd(688526) .
2. Planting industry chain
1) planting: maintain the “optimistic” rating, and highlight Jiangsu Provincial Agricultural Reclamation And Development Co.Ltd(601952) . The warming of geographical conflicts may affect food demand and trade, and the driving force for the continuous rise of food prices in China’s foreign markets is strengthened. Document No. 1 highlights the bottom line thinking of food security, and the importance of the food industry has been highly concerned. Maintain the medium and long-term “optimistic” rating of the industry, and recommend Jiangsu Provincial Agricultural Reclamation And Development Co.Ltd(601952) .
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 seed industry policy is in the process of strengthening. Document No. 1 focuses on the “full implementation of the action plan for the revitalization of the seed industry and the pilot of subsidies after the R & D and promotion of major varieties”. It is expected that the genetically modified R & D subsidies for corn and soybean seed industry will take the lead. The promotion and listing of genetically modified products will open up the long-term space of the seed industry market and promote the long-term optimization of the pattern. Leading enterprises with first mover advantage are expected to benefit from it and gain more market share. Maintain the long-term “optimistic” rating of the industry, and focus 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
Breeding and feed callback, resulting in the overall performance of the agricultural sector is weaker than the market. 1. Last week, the Shenwan agricultural index fell 3.26%. Over the same period, the Shanghai Composite Index fell 1.12%, the Shenzhen composite index fell 0.34%, 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 increases and four fell, among which the aquaculture and feed sectors led the decline. 3. The top 10 gainers are mainly concentrated in the planting sector, and the top 10 losers are concentrated in the breeding sector. The top three stocks that rose were Yuehai feed, Lontrue Co.Ltd(300175) and Xinjiang Guannong Fruit & Antler Co.Ltd(600251) .
III. industry data
Pigs: in the 8th week, the average ex factory price of pigs in 22 provinces and cities across the country was 12.45 yuan / kg, down 0.03 yuan / kg per week; The average loss of self breeding heads in the main pig producing areas in China was 481.9 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, the average price of broiler feed was 3.95 yuan / kg in the 8th week, with a weekly increase of 0.08 yuan / kg; The price of fattening pig feed was 3.68 yuan / kg, with a weekly increase of 0.03 yuan / kg;
Aquatic products: in the 8th week, the sea cucumber in Shandong Weihai bulk wholesale market was 190 yuan / kg, with a weekly drop of 6 yuan / kg; The price of scallop is 9 yuan / kg, with a weekly increase of 1 yuan / kg; The price of shrimp is 310 yuan / kg, with a weekly drop of 10 yuan / kg; The price of abalone is 90 yuan / kg, with a weekly drop of 10 yuan / kg;
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 7th week, the average spot price of Chinese wheat was 2886 yuan / ton, up 9 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
