Report summary:
Grasp the main line of policy investment and seize the historical opportunity of agriculture. As the most traditional industry, agriculture mainly produces food, meat and other agricultural and sideline products consumed by the public, and its importance to national development is often underestimated. However, food security is very important in dealing with emergencies such as natural disasters and wars. Therefore, large countries attach great importance to agricultural production. Because of the basic guarantee function of agriculture, we believe that agriculture is the foundation of a big country. We firmly believe that the main investment line of agriculture, forestry, animal husbandry and fishery industry in 2022 must be the grasp of policies. Under the guidance of common prosperity and Rural Revitalization policies, the agricultural sector will usher in historic opportunities.
The policy orientation is clear, and the revitalization of seed industry can be expected. In the short term, with the introduction of the new variety Approval Measures and the revision of the seed law, the protection of intellectual property rights will promote the market share of China’s seed industry to focus on leading enterprises with core breeding ability. In the medium term, the collection of germplasm resources has achieved initial results, which will help China’s breeding field to start a new round of variety upgrading iteration, so as to promote the improvement of production efficiency and the expansion of seed market. The longer-term focus is that the seed industry is related to China’s voice in the global grain industry chain and the competition of comprehensive national strength among major countries. Therefore, it is an industry that the state will focus on supporting after new energy, and has a promising future. Focus on companies with core breeding capabilities and platform companies capable of integrating China’s seed industry resources.
Shenzhen Agricultural Products Group Co.Ltd(000061) processing and seed industry are highly coordinated. The market’s understanding of Shenzhen Agricultural Products Group Co.Ltd(000061) processing industry is insufficient. We believe that it is a pillar industry that must develop in coordination with the seed industry. Only by opening the consumption outlet of Shenzhen Agricultural Products Group Co.Ltd(000061) , can we bring the driving force of sustainable innovation in the seed industry and realize the positive cycle of scientific and technological progress and increasing production and income. Focus on companies with global competitiveness in sugar substitutes, amino acids, fuel ethanol, feed aureomycin and other subdivided fields.
Breeding continued to reduce production capacity, and pig prices rebounded from weak v. After the sharp rise in meat prices in 2019-20, the capacity of both pigs and poultry is still surplus, and the de capacity process of the breeding industry may continue in 2022. The stabilization of African swine plague has reduced the death rate of pigs. In addition, the supply of binary sows has gradually increased and gradually replaced ternary sows, resulting in a significant recovery in the overall production efficiency of sows. The two major factors have basically offset the capacity reduction effect caused by the decline of sow stock. Pig prices are expected to rebound in 2022. Focus on the industry leading companies with good basic orientation and obvious cost advantage.
Aquatic products are preferred in the later cycle, and large single products are expected for animal protection. The post breeding cycle industry is trapped in product homogenization, and the bargaining power of the breeding chain is always at the breeding end. In the case of low pig prices, it is difficult for the feed and animal protection industries to do anything. Focus on aquatic post cycle enterprises with continuous market expansion and good industry pattern, as well as the R & D Progress of large animal protection products such as non plague vaccine.
Risk tips: policy promotion fails to meet expectations, Shenzhen Agricultural Products Group Co.Ltd(000061) price fluctuation risk and livestock and poultry disease risk.
（ Northeast Securities Co.Ltd(000686) ）
