I. core view
Rating and Strategy: the downturn of pig price superimposed on the rise of costs, the pig industry continued to suffer large losses, the power to remove production capacity was sufficient, the reversal logic of pig price was strong during the year, and the “optimistic” rating of breeding was maintained. The two sessions focused on the revitalization of grain and seed industry, and the planting industry received high attention. Affected by the continuing geopolitical conflict, grain prices outside China will rise further and maintain the medium and long-term “optimistic” rating of planting. Combined with the valuation, continue to focus on the recommendation of pig breeding and yellow chicken breeding.
1. Aquaculture industry chain
1) pig industry: maintain the “optimistic” rating, focusing on Muyuan Foods Co.Ltd(002714) and Tecon Biology Co.Ltd(002100) . Last week, the average price of pigs in 22 provinces and cities was 12.58 yuan / kg, up 0.13 yuan per week; Piglets were 25.87 yuan / kg, up 0.64 yuan per week; Binary sows were 32.74 yuan / kg, down 0.06 yuan per week. The head of self breeding and autotrophic mode lost 481 yuan, the same as last week. In the same period, the central reserve of 40000 tons of frozen pork was launched. Purchasing and storage may temporarily boost the confidence of the pig market, but due to the small volume and limited impact on demand, it is expected to be difficult to change the depressed trend of pig prices. Recently, the Russian Ukrainian war has pushed up food prices and pig raising costs. Since the Spring Festival, the price range of soybean meal, wheat and corn in China has increased by about 25%, 4% and 3%. Rough calculation, at present, the unit cost of pig raising is 1 yuan / kg higher than that before the Spring Festival, an increase of about 7%. Under the dual influence of rising costs and depressed pig prices, the industry continues to suffer large losses and the capital chain is further strained. It is expected that the subsequent capacity will be eliminated or accelerated. Therefore, maintain the judgment on the bottom reversal of production capacity and pig price in the third quarter. At present, the average market value of breeding stocks and other indicators are below the historical average, and the safety margin of valuation is high, maintaining the “optimistic” rating of the sector. Focus on Muyuan Foods Co.Ltd(002714) and Tecon Biology Co.Ltd(002100) and pay attention to Wens Foodstuff Group Co.Ltd(300498) , Tangrenshen Group Co.Ltd(002567) , Shenzhen Kingsino Technology Co.Ltd(002548) and Fujian Aonong Biological Technology Group Incorporation Limited(603363) .
2) yellow chicken industry: maintain the “optimistic” rating and recommend Jiangsu Lihua Animal Husbandry Co.Ltd(300761) . In January, the price of Lihua yellow chicken was 14.46 yuan / kg, with a monthly increase of 0.26 yuan / kg; Wen’s yellow chicken sold for 13.98 yuan / kg, down 0.62 yuan per month. The price of yellow chicken has been above the cost line since the fourth quarter of 2021, and is expected to remain stable in the next 1-2 quarters. In the medium and long term, environmental protection constraints and the transformation of live birds to fresh ice will improve the entry barriers of the industry, promote the accelerated exit of small and medium-sized production capacity, and the competition pattern is expected to continue to be optimized. Maintain the “optimistic” rating of the industry, mainly recommend Jiangsu Lihua Animal Husbandry Co.Ltd(300761) , and pay attention to Wens Foodstuff Group Co.Ltd(300498) and Hunan Xiangjia Animal Husbandry Company Limited(002982) .
3) dynamic insurance: give a good rating, with emphasis on Wuhan Keqian Biology Co.Ltd(688526) . On the eve of the reversal of the pig cycle, the vaccine boom was under short-term pressure. In the medium and long term, the improvement of large-scale breeding level, the upgrading of vaccine technology and the listing of new products will drive the expansion of the animal protection market. At the same time, the new GMP certificate certification, feed prohibition and breeding restriction, as well as the improvement of the biological security level of the breeding industry will promote the reform of the animal protection industry and optimize the competition pattern. PE stocks are currently at the bottom of history, with a high margin of safety in valuation, and are given a positive rating. Stocks with reasonable valuation and R & D advantages are recommended Wuhan Keqian Biology Co.Ltd(688526) .
2. Planting industry chain
1) planting: maintain the “optimistic” rating, and highlight Jiangsu Provincial Agricultural Reclamation And Development Co.Ltd(601952) . Following the No. 1 document, the two sessions re mentioned the revitalization of grain and seed industry, and the importance of planting industry has been highly concerned by the market. Geopolitical conflicts continue or affect the grain production of major producing countries and global export trade, and the driving force of grain prices in China’s foreign markets continues to rise. Maintain the medium and long-term “optimistic” rating of the industry, and recommend Jiangsu Provincial Agricultural Reclamation And Development Co.Ltd(601952) .
2) seed industry: maintain the “optimistic” rating, focusing on Shandong Denghai Seeds Co.Ltd(002041) and Yuan Longping High-Tech Agriculture Co.Ltd(000998) . The seed industry policy is in the process of strengthening. After the No. 1 document focuses on “comprehensively implementing the action plan for the revitalization of the seed industry and carrying out the pilot subsidy after major variety R & D and promotion”, the two sessions re mention the revitalization of the seed industry. It is expected that the transgenic R & D subsidy for corn and soybean seed industry will take the lead, and the leading enterprises in the seed industry are expected to benefit. We will open up the market for genetically modified products and promote the long-term listing of genetically modified products. Leading enterprises with first mover advantage are expected to benefit from it and gain more market share. Maintain the long-term “optimistic” rating of the industry, and focus on the investment opportunities of corn seed industry with high prosperity. In terms of individual stocks, focus on Shandong Denghai Seeds Co.Ltd(002041) , Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Beijing Dabeinong Technology Group Co.Ltd(002385) .
II. Market Review
The agricultural sector rose sharply, ahead of the market. 1. Last week, the Shenwan agricultural index rose 3.48%. Over the same period, the Shanghai Composite Index fell 0.1%, the Shenzhen composite index fell 2.92%, and the agricultural growth was significantly better than that of the big market. 2. All eight secondary sub industries recorded increases, with planting and breeding leading the increase. 3. The top 10 gainers are concentrated in the planting and breeding sector, and the top 10 losers are concentrated in the agricultural comprehensive sector. The top three stocks that rose were Hainan Shennong Technology Co.Ltd(300189) , Shandong Bailong Chuangyuan Bio-Tech Co.Ltd(605016) and Wanxiang Doneed Co.Ltd(600371) .
III. industry data
Pigs: in the 9th week, the average ex factory price of pigs in 22 provinces and cities across the country was 12.58 yuan / kg, with a weekly increase of 0.13 yuan / kg; The average loss of self breeding heads in the main pig producing areas in China was 481.8 yuan. By the end of January 2021, the number of fertile sows in China was 42.9 million, a year-on-year decrease of 3.7%; Broilers: in the 9th week, the average price of chicken seedlings in Yantai, Shandong Province was 0.9 yuan / feather, with a weekly drop of 0.3 yuan / feather; The average price of white feather meat and wool chicken in front of the shed was 3.64 yuan / kg, with a weekly drop of 0.08 yuan / kg; In the 9th week, the single feather loss of broiler breeding was 1.44 yuan;
Feed: according to the statistics of Boya Hexun, in the 9th week, the average price of broiler feed was 3.95 yuan / kg, unchanged on a weekly basis; The price of fattening pig feed was 3.7 yuan / kg, with a weekly increase of 0.02 yuan / kg; Aquatic products: in the 9th week, the sea cucumber in Shandong Weihai bulk wholesale market was 200 yuan / kg, with a weekly increase of 10 yuan / kg; The price of scallops was 9 yuan / kg, unchanged on a weekly basis; The price of shrimp was 310 yuan / kg, unchanged on a week-on-week basis; The price of abalone is 110 yuan / kg, with a weekly increase of 20 yuan / kg;
Sugar, cotton, corn, soybean meal, wheat and rice: in the 9th week, the spot price of Nanning white sugar was 5715 yuan / ton, with a weekly increase of 31 yuan / ton; The price of 328 grade cotton in China was 22693 yuan / ton, with a weekly drop of 116 yuan / ton; The average purchase price of corn in China was 2678 yuan / ton, up 44 yuan / ton per week; The average spot price of soybean meal in China was 4731 yuan / ton, with a weekly increase of 146 yuan / ton; In the 8th week, the average spot price of Chinese wheat was 2936 yuan / ton, with a weekly increase of 50 yuan / ton; The average price of Japonica Rice in China was 2768 yuan / ton, with a weekly increase of 28 yuan / ton;
IV. risk warning
The price changes of raw materials such as sudden epidemic diseases, livestock and poultry, aquatic products and corn are less than expected
