1、 Market Review
The agricultural index rose sharply, with feed, animal protection and breeding taking the lead. 1. Last week, the Shenwan agricultural index rose 6.56%. Over the same period, the Shanghai Composite Index fell 0.39% and the Shenzhen Component Index fell 1.05%. 2. Six of the eight sub sectors rose, of which feed, animal protection and aquaculture rose by 11.11%, 9.74% and 8.21% respectively, ranking among the top three; 3. The top 10 gainers are concentrated in the feed and animal protection sector, and the top 10 losers are concentrated in the agricultural comprehensive sector. The top three stocks were Pulike Biological Engineering Inc(603566) , Tecon Biology Co.Ltd(002100) and Fujian Tianma Science And Technology Group Co.Ltd(603668) .
2、 Investment advice
Pay attention to the rapid implementation of the new seed method, and focus on recommending high-quality seed industry leaders who have benefited for a long time.
1. Seed industry: the rapid implementation of the new seed method exceeded expectations, and high-quality seed industry leaders are mainly recommended. Since the second half of 2021, policies such as the action plan for the revitalization of the seed industry have been intensively released, and the seed industry has entered a sweet period of policies. On December 6, the national approval standard for genetically modified soybean and maize varieties was formulated and solicited public opinions. On December 24, chairman’s order No. 105 announced that the fourth amendment to the seed law had been adopted by the National People’s Congress and would come into force on March 1, 2022. Compared with the previous three amendments, this amendment focuses on adding a substantive derivative variety system and expanding the protection scope and links of new plant variety rights. Its purpose is to strengthen the intellectual property protection of new plant varieties and encourage innovation. We believe that the implementation speed of the seed law amendment exceeds market expectations, and it is expected that the listing process of genetically modified varieties of China’s staple grain will be advanced. Looking forward to the next 5-10 years, the penetration rate of genetically modified varieties of China’s staple grain will be greatly improved. We maintain the optimistic rating of the seed industry, especially the investment opportunities of the high boom corn seed industry that gives priority to the commercialization of genetically modified crops. In terms of individual stocks, focus on Shandong Denghai Seeds Co.Ltd(002041) with excellent variety combination and continuous growth, as well as Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Beijing Dabeinong Technology Group Co.Ltd(002385) with leading advantages in transgenic R & D and variety layout, and pay attention to Winall Hi-Tech Seed Co.Ltd(300087) .
2. Breeding industry chain: 1) pig breeding: pig prices tend to stabilize before the festival, and pay attention to cost leading enterprises with reasonable valuation. After seeing the rebound peak at the end of November, pig prices corrected for four consecutive weeks, and the decline narrowed last week. According to statistics, As of last weekend (December 24), the average price of live pigs in 22 provinces and cities across the country was 15.99 yuan / kg, down 3.09% on a week-on-week basis, 2.19 percentage points narrower than last week. On the supply side, from the situation of newborn pigs in the early stage, it is expected that the slaughter volume of live pigs before the festival will maintain an increase on a month-on-month basis. On the demand side, the peak period of bacon production is basically over, but the peak season of family and catering consumption is coming, and the driving force of consumption growth remains unchanged 。 With both supply and demand rising, we expect the pig price to fluctuate before the festival or in the range, and it is less likely to continue the in-depth adjustment. In terms of valuation, at present, the market value of most pig enterprises is lower than the historical average and has a certain margin of safety. Therefore, the sector is optimistic about the rating. Individual stocks mainly recommend Muyuan Foods Co.Ltd(002714) with leading cost and Wens Foodstuff Group Co.Ltd(300498) and Tecon Biology Co.Ltd(002100) with obvious improvement in production indicators. 2) Dynamic insurance: on the eve of the new cycle, the prosperity of pig vaccine was under short-term pressure, but the static PE was at the bottom of history, the safety margin of valuation was high, and the optimistic rating was maintained. Individual stocks mainly recommend Wuhan Keqian Biology Co.Ltd(688526) with reasonable valuation and significant growth.
3、 Industry data
Pigs: in the 51st week, the average ex factory price of pigs in 22 provinces and cities was 15.99 yuan / kg, down 0.51 yuan / kg from last week; The average loss of self breeding heads in the main pig producing areas in China was 43.31 yuan. By the end of October 2021, the number of fertile sows in China was 43.48 million, a year-on-year increase of 6.6%;
Broilers: in the 51st week, the average price of chicken seedlings in Yantai, Shandong Province was 1.4 yuan / feather, and the average price of white feather meat feather chicken in front of the shed was 3.98 yuan / kg, up 0.01 yuan / kg from last week; In the 51st week, the single feather profit of broiler breeding was 0.46 yuan;
Feed: according to the statistics of Boya Hexun, in the 51st week, the average price of broiler feed was 3.8 yuan / kg, unchanged from last week; The price of fattening pig feed was 3.61 yuan / kg, unchanged from last week;
Aquatic products: in the 51st week, the sea cucumber in Shandong Weihai bulk wholesale market was 200 yuan / kg, unchanged month on week; The price of scallops was 12 yuan / kg, unchanged from last week; Shrimp price was 360 yuan / kg, unchanged on a week-on-week basis; The price of abalone was 110 yuan / kg, unchanged from last week; Sugar, cotton, corn, soybean meal, wheat and rice: in the 51st week, the spot price of Nanning white sugar was 5657 yuan / ton, down 42 yuan / ton from last week; In the 51st week, the price of 328 grade cotton in China was 21941 yuan / ton, up 54 yuan / ton from last week; The average purchase price of corn in China was 2642 yuan / ton, down 3 yuan / ton from last week; The average spot price of soybean meal in China was 3559 yuan / ton, up 37 yuan / ton from last week; The average spot price of wheat in China was 2848 yuan / ton, down 9 yuan / ton from last week; The average price of Japonica Rice in China was 2720 yuan / ton, unchanged from last week;
4、 Risk tips
The price changes of raw materials such as sudden epidemic diseases, livestock and poultry, aquatic products and corn were less than expected
