Key investment points
Market review this week
Last week (2021 / 12 / 20-2021 / 12 / 26), the CSI 300 index fell by 0.67%, and the agriculture, forestry, animal husbandry and fishery index rose by 6.56% over the same period, outperforming the CSI 300 index by 7.24 percentage points, ranking first among the 28 Shenwan level industries. From the perspective of agriculture, forestry, animal husbandry and fishery sub sectors, last week's feed / animal health / livestock and poultry breeding / planting / fishery / Shenzhen Agricultural Products Group Co.Ltd(000061) The processing sector rose or fell by 11.11%, 9.75%, 8.22%, 2.35%, 1.24% and 0.88% respectively.
Core ideas of this week
[pig breeding] the sentiment of raising prices and reluctant to sell at the breeding end increased later this week, and the decline of pig prices weakened. Recently, it is still possible for pig prices to stop falling and rebound, but the rebound range is not large. Near New Year's day, there is still a risk of concentrated slaughter of pigs before the festival. It is expected that the supply of pigs is sufficient as a whole, and it is not difficult for slaughter enterprises to purchase. It is expected that the fluctuation of pig price will be weak next week. We have observed that the stock of fertile sows has decreased month on month for five consecutive months since July, and the production capacity shows a trend of de industrialization. In the next half of the year, farmers will probably accelerate the elimination due to pessimistic expectations of pig price market. At the same time, due to debt pressure, the scale farm may also increase the reduction range of production capacity, and the industry may usher in a cycle reversal in the second half of next year, Continue to pay attention to the changes of breeding sows.
[white feather broiler] recently, the survival rate of broilers has decreased, the supply of broilers is small, while the delivery of chicken is slow, and the game between supply and demand continues. It is expected that the price or cost line of wool chicken will run above 8 yuan / kg next week. In order to avoid the holiday of slaughtering enterprises during the Spring Festival, the market is in the seedling suspension period, the trading of chicken seedlings is suspended, and the seedlings may gradually resume in the late next week, but the amount is small.
[seed industry] the seed industry revitalization policy was issued intensively, focusing on the leader of high-quality seed industry. On December 24, 2021, the 32nd meeting of the Standing Committee of the 13th National People's Congress adopted the decision of the Standing Committee of the National People's Congress on Amending
<中华人民共和国种子法>
The decision shall enter into force as of March 1, 2022. The new seed law highlights the protection of original innovation, and the protection of intellectual property rights in the seed industry has moved to a new height. We believe that stricter regulatory policies for the seed industry are conducive to improving the industry concentration, optimizing the industry competition pattern, leading seed enterprises may benefit from the first mover advantages in transgenic technology and varieties, and grasp the strategic development opportunities of the industry.
Investment advice
[pig breeding] affected pig prices, the sector has been adjusted back to a reasonable range, and the market value of high-quality leaders is at the bottom of history. It is suggested to seize the investment opportunity on the left. We choose the target around two main lines: one is the enterprise that can continuously increase the number of sows in the next 1-2 quarters, and the other is the enterprise with the fastest cost improvement in the next 1-2 quarters.
Therefore, the first echelon is recommended: Wens Foodstuff Group Co.Ltd(300498) (the cost improvement continues to be realized, and the production capacity reserve of sows is rich to support the listing growth; the short-term stock price rises slightly, but there is still much room for growth), New Hope Liuhe Co.Ltd(000876) (the efficiency of breeding sows continues to improve, there is a large room for cost reduction, and the capital reserve is abundant to support the capacity expansion in cold winter; the current stock price is still at the bottom, which can provide a high margin of safety), Muyuan Foods Co.Ltd(002714) (self breeding and autotrophy create the core cost advantage, the capacity expands steadily and sits firmly in the leading position). Secondly, the second echelon is recommended: Tecon Biology Co.Ltd(002100) (industry leading cost control: Xinjiang and Gansu enjoy the advantages of natural non plague prevention and control, while Henan has a slightly higher cost, but has little impact on the whole; the marketing growth can be expected, with an annual marketing volume of 5 million by 2023; the animal protection and feed sectors develop steadily). Finally, it is suggested to pay attention to Jiangxi Zhengbang Technology Co.Ltd(002157) , Tech-Bank Food Co.Ltd(002124) , Tangrenshen Group Co.Ltd(002567) , Fujian Aonong Biological Technology Group Incorporation Limited(603363) And other enterprises to improve the cost and breeding sow stock.
[white feather broiler] the industrial chain has experienced a loss for one year. The deep loss in the downstream inhibits the enthusiasm for column filling. The decline in the price of chicken seedlings affects the profits of the incubator, or forces the chicken farms to take the initiative to reduce production capacity. We may see a month on month contraction in the supply of chicken seedlings in the third quarter of next year. It is recommended to pay attention to the industry leader Fujian Sunner Development Co.Ltd(002299) : layout the whole industrial chain of white feather chicken, rapid development of downstream meat products processing business and steady improvement of profitability. Secondly, the elastic targets Shandong Minhe Animal Husbandry Co.Ltd(002234) , Shandong Yisheng Livestock & Poultry Breeding Co.Ltd(002458) of the main chicken seedling sales business in the upstream of the industrial chain are recommended.
[yellow feather broiler] even if the industry accelerates the clearing of production capacity at the low point of the cycle, the head enterprises still expand against the trend. It is expected that the market share of the head enterprises will further increase after the gradual withdrawal of free range farmers in the future. Recommended concerns: Wens Foodstuff Group Co.Ltd(300498) (the absolute leader in China's yellow feather chicken market), Jiangsu Lihua Animal Husbandry Co.Ltd(300761) (the rapid expansion of production capacity and the industry-leading cost control), Hunan Xiangjia Animal Husbandry Company Limited(002982) (the leader in yellow feather chicken ice fresh products. The increase of sales volume of ice fresh products drives the improvement of profitability).
[dynamic insurance] the stock price of dynamic insurance companies is almost synchronized with the pig price. When the pig price rises in a new round, the performance of the dynamic insurance sector is usually bright. When the pig price goes down, the market is worried that the immunization mood of breeding subjects will be affected and reduce the vaccine demand, which will affect the company's performance. However, in fact, with the gradual improvement of large-scale breeding in China, the scale farms are in safety considerations, and generally will not change the immunization scheme at will, and the demand for vaccines is relatively rigid. Therefore, the performance of animal protection enterprises will not be greatly affected, The decline of share price with pig price is mainly affected by valuation.
In the short term, the plate has fallen to a reasonable range dragged down by the pig price. It is expected that the reversal of the pig price in the second half of next year will drive the prosperity of the industry upward. The plate is expected to usher in valuation repair, and it is suggested to lay out at a low level. In the long run, we believe that the R & D of African classical swine fever vaccine in China may have an unexpected policy catalysis in the future. Relevant animal protection enterprises may make substantial progress in the R & D of African classical swine fever vaccine. If the non classical swine fever vaccine is successfully commercialized, the plate will usher in an overall expansion. It is recommended to pay attention to China Animal Husbandry Industry Co.Ltd(600195) (rapid growth of seedlings in the foot-and-mouth disease market, benefit from prohibition and resistance of chemical drugs and brilliant performance in environmental protection), Pulike Biological Engineering Inc(603566) (continuous increase of R & D investment and rich reserves of advantageous products), Jinyu Bio-Technology Co.Ltd(600201) (leading seedlings in the foot-and-mouth disease market and long-term growth supported by new products).
[seed industry] favorable policies have been issued intensively, and the new version of the seed law emphasizes the protection of original innovation. We believe that the continuous tightening of intellectual property protection in the seed industry will help the industry reshuffle, and the phenomenon of illegal licensing, piracy and infringement may be improved. The leading Seed Enterprises are expected to further increase their market share with high R & D technology and capital barriers. Basically, next year, China's grain price boom will rise, supporting the rise of seed prices. It is expected that high-quality seed enterprises will usher in a performance release period in the next few years, the curtain of genetically modified organism breeding will open, the corn seed industry will usher in strong capacity expansion expectations, and the leading seed enterprises may usher in a growth stage.
Recommended concern Beijing Dabeinong Technology Group Co.Ltd(002385) : transgenic traits have been approved more, with obvious first mover advantage. Yuan Longping High-Tech Agriculture Co.Ltd(000998) : rice and corn seeds are the leaders, the advantages of traditional varieties are prominent, and the participating companies have rich reserves of transgenic technology. Shandong Denghai Seeds Co.Ltd(002041) : corn seed is the leader, which is expected to benefit from the landing of transgenic corn.
Risk statement
Covid-19 epidemic spread risk, international situation change risk, policy implementation less than expected risk, etc
