Q: how do you view the pig cycle?
First, in the medium and long term, the trend of capacity removal has become, and the pig price is expected to reverse in the middle of next year. In the case of deep losses in the industry, the production capacity continues to go. According to the third-party data or Tianfeng agriculture questionnaire survey data, the clearing range of real production capacity in the past period may exceed expectations; In terms of the time for the release of pigs corresponding to the stock of fertile sows, it is expected that around the middle of next year, the pig production capacity will reach the peak and turn down, which may be the inflection point of the reversal of the bottom of pig prices. However, it should also be noted that the replacement of reserve sows. If the amount of reserve sows is fast from November this year to January next year, the inflection point time may be delayed.
Second, in the short term, long and short factors play a game, focusing on the impact of the outbreak of pig disease on the deregulation of production capacity. Short term long and short factor game, seasonal peak consumption season boosts demand, but the phenomenon of concentrated marketing before the festival is obvious. If the short-term rebound is too high, it may delay the pace of capacity removal. It is necessary to focus on the height of short-term pig price rebound and farmers’ productivity sentiment. In addition, winter is a period of high incidence of piglet diarrhea and non plague. Under the current comprehensive loss of breeding, feed nutrition, animal protection and epidemic prevention and pig farm management have decreased, or the risk exposure of pig herd has been increased. If the epidemic breaks out, it may accelerate the elimination of production capacity, and the pig cycle reversal is expected to come in advance. Last week, the Department of agriculture and rural development of Hebei Province announced that Shanhaiguan District of Qinhuangdao City found the African swine plague among the pigs transported by other provinces. In the follow-up, we should pay attention to the occurrence of swine disease and its impact on production capacity.
Second question: how do you view the investment opportunities of pig stocks?
This year, the price of pigs fell sharply, and the correction of pig stocks was significant. At the current stage, we believe that the valuation advantage has been realized, and the pig stocks have reached the key point of attention. At the current point in time, From the perspective of security (sufficient funds for “winter” reserve + high safety margin of valuation) and growth (growth of sales volume + space for cost reduction), the target is [ Wens Foodstuff Group Co.Ltd(300498) ] (high growth elasticity and sufficient capital reserve), [ Muyuan Foods Co.Ltd(002714) ] (with cost advantage and stable growth), followed by [ New Hope Liuhe Co.Ltd(000876) ], [ Tecon Biology Co.Ltd(002100) ], [ Fujian Aonong Biological Technology Group Incorporation Limited(603363) ], [ Jiangxi Zhengbang Technology Co.Ltd(002157) ], [ Tech-Bank Food Co.Ltd(002124) ], [ Tangrenshen Group Co.Ltd(002567) ] [COFCO Jiakang] et al.
Third question: what do you think of the follow-up of the seed industry?
First, relevant policies are expected to continue to strengthen. We believe that there have been intensive policies and meetings related to the seed industry in recent 2-3 months, Including the central rural work conference at the end of December 2021 (attended the central rural work conference in Xi Jinping 2020 and delivered an important speech, emphasizing the need to adhere to the self-reliance of agricultural science and technology and accelerate the tackling of key core technologies in agriculture), the issuance of genetically modified safety certificate at the end of 2021 and the beginning of 2022, and the document No. 1 from January to February 2022 (proposed in Document No. 1 of 2021) “Fight a good turnaround in the seed industry. Seeds are the foundation for agricultural modernization”) and other policies are expected to continue to emphasize the seed industry, causing the market to pay attention to the seed industry. Establish a system of substantial derived varieties and strengthen the protection of original innovation.
Second, continue to track the approval and landing of genetically modified varieties and pay attention to seeds α Differentiation. It is recommended to pay attention to the approval progress of genetically modified corn and soybean seeds and the approved companies. If approved, it is recommended to pay attention to the advance receipts of approved varieties in Q3 of 2022 and the income and profit brought by Q4 of 2022. In addition, factors such as the crackdown on industry licensing and illegal seeds, Shenzhen Agricultural Products Group Co.Ltd(000061) price increase are also expected to drive the attention of the seed industry sector.
Third, on the subject, we believe that companies that attach importance to R & D investment and have strong innovation ability, especially those with rich reserves of transgenic technology, are expected to gain a greater market share. In addition, the possibility of low temperature and freezing injury and spring drought in the North may lead to a rise in Shenzhen Agricultural Products Group Co.Ltd(000061) prices next year, with special attention to the supply and demand of corn and wheat. Continue to highlight: [ Yuan Longping High-Tech Agriculture Co.Ltd(000998) ] (a leading rice and corn seed company, a joint-stock company with rich reserves of transgenic technology and outstanding advantages in traditional varieties and channels), [ Beijing Dabeinong Technology Group Co.Ltd(002385) ] (a leading transgenic technology, Beijing Dabeinong Technology Group Co.Ltd(002385) the largest area of bio transgenic corn expansion), [ Shandong Denghai Seeds Co.Ltd(002041) ] (a leader in Yumi seed, which is expected to seize the opportunity of transgenic corn), [ Winall Hi-Tech Seed Co.Ltd(300087) ] (good business quality, backed by Syngenta group, is expected to achieve leapfrog development).
Risk tips: less than expected slaughter, less than expected elimination of fertile sows, epidemic risk, policy risk and natural disaster risk.
