I. core view
Rating and Strategy: the pig price is low, the recent loss range of the pig industry has expanded, the industry has sufficient power to eliminate production capacity, the reversal logic of pig price is strong during the year, and the “optimistic” rating of breeding has been maintained. The two sessions emphasized the revitalization of grain and seed industry, and the planting industry was highly valued by the market. 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 12.25 yuan / kg, down 0.33 yuan per week; Piglets were 25.57 yuan / kg, down 0.3 yuan per week; Binary sows were 32.84 yuan / kg, up 0.1 yuan per week. The head of self breeding and autotrophic model lost 517 yuan, thanks to 36 yuan compared with last week. The central reserve’s collection and storage of 40000 tons of frozen pork has a limited impact on supply and demand. The depressed trend of pig prices is difficult to change in the short term, but there is limited room for further decline. Recently, the rise in food prices has driven up the cost of raising pigs. The rough calculation of the unit cost of raising pigs has increased by 0.6-1 yuan / kg, or about 4-7%, compared with that before the Spring Festival. The rising cost is superimposed on the depressed pig price, the range of industrial losses is expanded, the enterprise capital chain is further strained, and the driving force of capacity removal is strengthened. It is expected that the capacity removal or acceleration will be accelerated in the next few months. 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 February, the price of Lihua yellow chicken was 14.16 yuan / kg, down 0.3 yuan / kg per month; Wen’s yellow chicken costs 14.63 yuan / kg, up 0.65 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 change of live poultry to ice fresh will accelerate the withdrawal of small and medium-sized production capacity and optimize the competition pattern of the industry. Maintain the “optimistic” rating of the industry, focus on recommending Lihua, 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) . The night before the pig cycle reversal, 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 mainly affect the stability of global export trade. If the conflict lasts until April to may, it cannot be ruled out that it will affect the grain production of major producing countries in the future. At that time, the driving force for the continued rise of global and China’s grain prices will increase. 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. The promotion and listing of genetically modified products will open up the long-term space of the seed industry market and promote the long-term optimization of the pattern. 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 index was synchronized with the correction of the market. 1. Last week, the Shenwan agricultural index fell 3.94%. Over the same period, the Shanghai Composite Index fell 3.99% and the Shenzhen composite index fell 4.4%. The performance of the agricultural sector kept pace with the market. 2. As for the secondary sub industry, except for the rise of fishery, the indexes of other seven sub industries fell, of which Shenzhen Agricultural Products Group Co.Ltd(000061) processing and aquaculture index fell slightly; 3. The top 10 gainers are mainly concentrated in the fishery and aquaculture sector, and the top 10 losers are concentrated in the animal health sector. The top three stocks that rose were Lontrue Co.Ltd(300175) , Zhanjiang Guolian Aquatic Products Co.Ltd(300094) and Fujian Aonong Biological Technology Group Incorporation Limited(603363) .
III. industry data
Pigs: in the 10th week, the average ex factory price of pigs in 22 provinces and cities across the country was 12.25 yuan / kg, down 0.33 yuan / kg per week; The average loss of self breeding heads in the main pig producing areas in China was 517.8 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%;
Broiler: in the 10th week, the average price of chicken seedlings in Yantai, Shandong Province was 1.14 yuan / feather, with a weekly increase of 0.24 yuan / feather; The average price of white feather chicken in front of the shed was 3.87 yuan / kg, with a weekly increase of 0.23 yuan / kg; In the 10th week, the single feather loss in broiler breeding was 0.65 yuan;
Feed: according to the statistics of Boya Hexun, in the 10th week, the average price of broiler feed was 3.98 yuan / kg, with a weekly increase of 0.03 yuan / kg; The price of fattening pig feed was 3.72 yuan / kg, with a weekly increase of 0.02 yuan / kg; Aquatic products: in the 10th week, the sea cucumber in Shandong Weihai bulk wholesale market was 200 yuan / kg, unchanged on a weekly basis; The price of scallop is 8 yuan / kg, with a weekly drop of 1 yuan / kg; The price of shrimp was 310 yuan / kg, unchanged on a week-on-week basis; The price of abalone was 110 yuan / kg, unchanged on a week-on-week basis;
Sugar, cotton, corn, soybean meal, wheat and rice: in the 10th week, the spot price of Nanning white sugar was 5808 yuan / ton, with a weekly increase of 93 yuan / ton; The price of 328 grade cotton in China was 22714 yuan / ton, with a weekly increase of 21 yuan / ton; The average purchase price of corn in China was 2730 yuan / ton, with a weekly increase of 52 yuan / ton; The average spot price of soybean meal in China was 4924 yuan / ton, with a weekly rise of 193 yuan / ton; In the 9th week, the average spot price of wheat in China was 3725 yuan / ton, with a weekly increase of 339 yuan / ton; The average price of Japonica Rice in China was 2768 yuan / ton, unchanged on a weekly basis;
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
