Event:
Affected by the recent conflict between Russia and Ukraine, the already high commodity prices have further risen, the prices of some Shenzhen Agricultural Products Group Co.Ltd(000061) , Oils and fats are at historic highs, and the companies in the food and beverage agricultural industry are facing the pressure of raw material costs.
Comments:
It is difficult for commodity prices to remain high for a long time, and the impact of the conflict is expected to be alleviated
The main impacts of the Russian Ukrainian conflict Shenzhen Agricultural Products Group Co.Ltd(000061) include: directly affected sunflower oil, wheat, corn, barley and other alternative oils indirectly affected by the rise of crude oil prices: soybean oil, palm oil and rapeseed oil. From the perspective of trend, we believe that Russia has basically completed its main strategic objectives in this conflict, the follow-up peace negotiations are expected to be coming soon, and the panic impact of the conflict on the supply side of bulk commodities is expected to subside in the short term. In terms of the impact on China, China’s main imported crops are soybeans. China’s imports of products affected by the conflict between Russia and Ukraine, such as wheat, sunflower oil and corn, are small. At the same time, some products adopt a quota system, which has a relatively limited impact on the price of Chinese products.
Supply and demand are still the key to the resumption of the trend of bulk commodities, and the war is difficult to have a long-term impact
To resume the trend of bulk commodities during the Crimea incident in Russia and Ukraine in 2014 and the two rounds of commodity bull markets in 20062008 and 20102012, we believe that the current overall trend of bulk commodities is mainly close to 2008 and 2012. The core influencing factors are still supply-demand relationship and money supply. War and conflict can only have a short-term impact and it is difficult to change the long-term trend.
Investment advice
Agricultural sector: commodity prices have risen rapidly under the conflict between Russia and Ukraine, and high-quality varieties are expected to see both volume and price rise.
Key recommendations: Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Shandong Denghai Seeds Co.Ltd(002041) , Beijing Dabeinong Technology Group Co.Ltd(002385) , Winall Hi-Tech Seed Co.Ltd(300087) .
Aquaculture sector: under the background of rising feed prices and further promoting the de industrialization of production capacity due to the compression of aquaculture profits, key recommendations are: Muyuan Foods Co.Ltd(002714) , Wens Foodstuff Group Co.Ltd(300498) , Guangdong Haid Group Co.Limited(002311) .
Food sector: combined with upstream raw material cost disturbance and the recovery of current demand for various categories, we think that the food and beverage industry has a relatively good industry in recent years: Baijiu and dairy products. We should pay attention to: Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Erie, Mengniu, Shanghai Milkground Food Tech Co.Ltd(600882) ; The industries with neutral prosperity are: beer, prefabricated vegetables and compound seasoning; The industries with slow recovery are condiments, soft drinks, brine products and tea drinks.
Risk tips
There are risks of intensified conflict between Russia and Ukraine, intensified shipping restrictions, less than expected economic recovery and repeated outbreaks
