Recently, the pig breeding sector has been active again, and the breeding ETF has obtained net purchase of funds. Many fund managers are actively adding positions in relevant stocks. There are well-known funds, and even six of the top 10 heavy positions are pig concept stocks. Fund managers believe that this round of pig price decline has entered the bottom area. The most pessimistic time of the industry has passed. There will be an inflection point in the pig cycle in the future, and the share price of the secondary market will be reflected in advance. They are optimistic about the beta opportunity of the industry and actively allocate stable leaders and second-line varieties with greater flexibility.
breeding ETF net purchase of funds
fund managers actively increase positions in pig raising sector
Last week, Shenwan breeding industry index rose by 4.19%, and Muyuan Foods Co.Ltd(002714) , Wens Foodstuff Group Co.Ltd(300498) , New Hope Liuhe Co.Ltd(000876) and other stocks performed actively. In fact, since the rebound in the second half of last year, the Shenwan aquaculture index has rebounded by nearly 30% in the past six months. The breeding ETFs of China Merchants, Ping An, Cathay Pacific and Penghua have achieved a yield of more than 20% in the past six months.
The funds in the secondary market have taken the lead in the layout, and many breeding ETFs have recently obtained net purchase of funds. For example, Cathay Pacific China Securities breeding ETF, the fund share increased from 1.345 billion at the beginning of the year to 2.493 billion, a sharp increase of 1.148 billion, and the net inflow of funds reached 1.025 billion yuan. As of March 4, its scale exceeded 2.2 billion yuan.
At the same time, some fund managers actively increased their positions in the pig raising sector. The products managed by a fund manager in Shanghai withdrew from cyclical stocks in the fourth quarter of last year and switched to the pig raising sector on a large scale. The top ten heavy positions include Muyuan Foods Co.Ltd(002714) , Wens Foodstuff Group Co.Ltd(300498) , Tecon Biology Co.Ltd(002100) , Tangrenshen Group Co.Ltd(002567) , Tech-Bank Food Co.Ltd(002124) , Fujian Aonong Biological Technology Group Incorporation Limited(603363) , etc. He said that now the pig price is an absolute bottom, and the pig industry is worth configuring. It is predicted that the inflection point of the pig price will be in the second and third quarters, which may be the time point for the rise of this cycle. "Because this round of capacity removal is relatively fast, although it is not as fast as 2018 and 2019, the bottom time will not be as late as the market imagined. The space for the rise of pig price in the future depends on the economic recovery, because pork is a must consumption and will follow the overall demand. We think that with the rise of pig price, there is also a lot of room for the share price of relevant companies. ”
A fund manager in South China told reporters: "Now is a difficult time for the breeding industry. The whole industry has suffered large losses. This round of pig cycle has entered the bottom area, and the pig price may reach the bottom and inflection point in the future. However, for stock investment, it often enters the bottom or even to the right at this stage. Since the beginning of the year, the breeding industry has taken the lead in rising, because some funds have made a forward-looking layout." The fund manager believes that "this wave of pig cycle is caused by endogenous variables, and we are optimistic about the upward trend of the industry boom in the next one or two years. We have made a layout. Since we are optimistic about the opportunity of beta in the industry, we will choose more stable leaders as the first choice in stock selection configuration, and we will also choose more flexible varieties in the second line. Now we need to track and compare them."
pig cycle inflection point accelerates
focus on robust leaders and high elasticity companies
Many fund managers are optimistic about the investment opportunities in the pig breeding sector. Cathay Pacific Fund said that in the short term, the feed cost and the expectation of collection and storage may form a support for the pig price. However, due to the weak overall demand side, the upward fluctuation of pig price is limited, and the deep loss of breeding continues. At the same time, the change of production capacity structure exists the trend of high-efficiency binary sows replacing low-efficiency ternary sows. Therefore, Cathay Pacific Fund believes that the reduction of production capacity will continue, Pig prices may continue to grind bottom in the first half of 2022, and continue to focus on the left layout. "At present, the most pessimistic time in the industry is over, and the downward trend of pig price will take momentum. The stock of breeding sows will continue to be reduced, and the inflection point of pig cycle will accelerate. From the current time node, the market value of some high-quality pig breeding stocks has fallen to a historically low level, and the configuration window will be opened step by step."
Wu Yue, director of large consumption research of Harvest Fund, said that in terms of breeding, China's pig prices may maintain a sideways trend in the short term. In the medium term, there will still be the possibility of a double bottom in pig prices, but the low point will not fall beyond October 2021, and the trend of capacity removal in the industry will continue. "We will also expand the allocation scope to small market value and high flexibility companies with low attention according to the progress of capacity removal, and select small and American pig enterprises with high flexibility and cashability through research. Generally speaking, according to the historical profit center, the current valuation of the agricultural sector is at a historical low, and 2022 is an important year for the seed industry and breeding sector to turn from expectation to the real inflection point Share. "
Jin Zicai, director of the Fund Investment Department of CAITONG fund, said, "at present, the pig price index has fallen to an all-time low, and we think the necessary conditions for judging the bottom of pig price have appeared - according to the data of the Ministry of agriculture, the number of sows that can be bred in July 2021 has increased negatively month on month for the first time since September 2020, and continued to decline from July to December. Therefore, it is expected that the pig price will rebound after the bottom in 2022."
