The time point for comprehensive configuration of “pig cycle” has come
The essence of industry capacity deregulation is the survival of the fittest in breeding costs. At the current time point, the industry is in the key stage of excess capacity removal. We believe that the 2022hi industry will enter the game stage of capacity elimination, and the clearing of cost inferior capacity will be accelerated, In this round, the capacity removal rate of the industry is expected to reach about 15% (compared with the high point from May to June 2021). The pace and range of pig capacity removal are positively correlated with the timely and long loss range, so there is a strong certainty of continuous capacity removal in 2022h1 industry. It is recommended that Muyuan Foods Co.Ltd(002714) is the leading industry breeding cost, and Wens Foodstuff Group Co.Ltd(300498) and New Hope Liuhe Co.Ltd(000876) are the production indicators that accelerate the recovery and the cost decreases rapidly ； Cycle reversal drives Fujian Aonong Biological Technology Group Incorporation Limited(603363) with excellent performance elasticity; Leshan Giantstar Farming&Husbandry Corporation Limited(603477) with both breeding cost and capital advantages; Relevant beneficiary object Tecon Biology Co.Ltd(002100) .
The emergence of the new cycle is the adjustment process of the structural disorder of supply and demand. The new cycle in 2022 is mainly caused by the quarterly or monthly supply and demand disorder between the quarterly breeding quantity and the normal year during the capacity recovery. The industry needs to take time to slowly bridge the supply and demand balance between quarters or more. However, since the beginning of 2021, the price of live pigs has fallen rapidly, resulting in the sound of systematic excess supply of industrial capacity. We believe that the aftershock cycle of the industry is a re cognition process of the structural disorder of industry supply and demand. The wrong cognition of the new cycle may lead to the prolongation of the cycle recovery rhythm after ASF and the increase of the volatility of small cycles.
The high cost of 2022h1 will support the continuous deregulation of industrial capacity
The price of feed raw materials has strong support for the high feed cost. It is expected that the bulk Shenzhen Agricultural Products Group Co.Ltd(000061) price is easy to rise but difficult to fall in 2022. The lowest average total cost of fattening commercial pigs in the industry is expected to be 14.0 yuan / kg in 2022. Considering that some production capacity in the industry is newly put into operation or renovated, and it is difficult to achieve the hypothetical level of sow production efficiency, the actual industry cost is expected to be about 14.5-15.0 yuan / kg in 2022; The industry MSY threshold is expected to be 16.0-16.5 pigs / year, supporting the slaughter of about 715 million pigs in 2022.
2022h1 supply suppresses pig prices, and the whole industry will enter a loss again. We expect that after the Spring Festival in 2022, the price of pigs will fall rapidly again. The average price threshold of pigs in 2022h1 industry may be 12-13 yuan / kg, and the extreme value may be 10 yuan / kg; The average loss range of a single head in the industry is about 250-300 yuan / head, and the extreme value is expected to reach more than 500 yuan / head. There is a positive correlation between the pace and extent of pig capacity removal and the timely length of loss. Therefore, there is a strong certainty of continuous capacity removal in 2022h1 industry.
ASF enhanced the understanding of the market pig cycle, and the capital inflow of the sector has quietly occurred
Taking August 2018 as the starting point of the previous pig cycle, the start of pig prices of major pig breeding enterprises in the livestock breeding sector showed an obvious leading effect compared with the rebound of pig prices. Among them, the old pig breeding leader Wens Foodstuff Group Co.Ltd(300498) was started first, and then the stock prices of Jiangxi Zhengbang Technology Co.Ltd(002157) , Tech-Bank Food Co.Ltd(002124) , Muyuan Foods Co.Ltd(002714) , New Hope Liuhe Co.Ltd(000876) were started from September to October 2018. It is mainly based on the harm degree of overseas ASF and the intensive news reports on the culling and harmless treatment of sick pigs. The industry has made a prediction on the passive decontamination degree of pig stock and fertile sow stock in advance. We believe that this round of “epic” pig cycle has unprecedented educational significance to the market, and the market as a whole has a broad understanding of the observation indicators of pig breeding industry. Therefore, looking forward to a new round of pig cycle industry, it is not difficult to understand the logic of capital rush. Judging from the recent net inflow of funds in the livestock breeding sector, the layout of the pig cycle has quietly started in early September.
Risk warning: the uncertainty of ASF epidemic situation or disrupting the rhythm of industry capacity; Macroeconomic uncertainty, etc.
