[market performance] last week, the CSI 300 index closed at 4921.34, up or down – 0.67% in one week and – 5.56% year to date; The Shanghai Composite Index closed at 3618.05, up or down – 0.39% in one week and + 4.17% year to date. Among the 28 Tier-1 industries in Shenwan, the top three gainers last week were agriculture, forestry, animal husbandry and fishery (+ 6.56%), food and beverage (+ 3.76%) and building materials (+ 2.37%); the top three gainers were electrical equipment (- 7.37%), non-ferrous metals (- 5.13%) and steel (- 3.99%). Among them, agriculture, forestry, animal husbandry and fishery rose or fell by 6.56% last week, ranking the first. Since the beginning of the year, agriculture, forestry, animal husbandry and fishery rose or fell by – 4.97%, ranking the 23rd.
[key information] recently, the Party group of the Ministry of agriculture and rural areas held a (expanded) study and exchange meeting of the theoretical learning center group of the Party group of the Ministry of agriculture and rural areas to further learn and understand the spirit of the central economic work conference and study and plan the key work, ideas and measures for agriculture, rural areas and farmers next year. The meeting stressed that we should take the supply security of grain and important agricultural and sideline products as the primary task, promote local governments to implement the same responsibilities of the party and the government, clarify the specific requirements of the main grain production areas, production and marketing balance areas and main sales areas, scientifically determine assessment indicators, stabilize the area and increase the unit yield, ensure that the grain output will continue to be more than 1.3 trillion kg next year, and encourage competent places to increase production. (source: Ministry of agriculture and rural areas)
[Key announcement]
[ Winall Hi-Tech Seed Co.Ltd(300087) ] on December 24, the company received the transfer registration confirmation issued by China Securities Depository and Clearing Co., Ltd. transferred from Zhongzhong group, confirming that the share transfer registration procedures involved in the free transfer have been completed, and after the equity change is completed, Zhongzhong group will control the voting rights of 127926927 shares of the company (accounting for 28.17% of the total issued shares of the company and 28.74% of the total shares of the company after excluding the number of shares in the special repurchase account) and become the controlling shareholder of the company. The actual controller of the company is still the state owned assets supervision and Administration Commission of the State Council.
[opinion]
The stock of fertile sows continued to decline and was close to the normal stock. From the perspective of the stock of fertile sows, the data of 42.96 million sows in November is close to the normal stock. In the follow-up, there may be a reduction in the demand for pork in the off-season of consumption in the first quarter, the superposition of extreme weather factors in cold winter and the epidemic situation may affect the sentiment of making up the stock, and the consistency expectation of the inflection point in the middle of next year may lead to many uncertainties such as the sentiment of pressing the stock. It is suggested to closely track the clearing of production capacity and pig price.
The high prosperity of seed industry continues. In order to ensure China’s food security and the stability of food prices, the state has successively issued a series of seed industry policies since this year. For example, the implementation of the genetically modified policy is imminent, and the seed industry revitalization action plan and the seed law have been promulgated and intensively revised. At present, the contradiction between grain supply and demand is prominent, China’s seed industry continues to prosper, and leading enterprises with variety advantages are expected to increase both volume and price in this cycle.
Investment advice
Pig breeding: there is still a mismatch between supply and demand in the current market, and the inflection point of the pig cycle has not yet arrived. It is suggested to pay attention to self breeding and autotrophic leaders with cost advantages and second-line pig enterprises with sufficient reserves of sows.
Seed industry: Policy dividends are continuously released to ensure China’s food security. The pattern of grain supply and demand has changed, the commercialization of GM has entered the fast lane, and the high prosperity of the seed industry continues. It is suggested to pay attention to the leading enterprises with strong R & D strength and rich GM reserves.
Risk statement
Macroeconomic fluctuations; Non plague situation; Extreme weather effects, etc.
