Pigs: the price of pigs rebounded slightly, but the farmers were more willing to sell
Investment suggestion: in the long run, the over dispersed industry pattern has brought greater integration opportunities. Since the non plague, leading enterprises have accelerated their production capacity layout and gradually increased their market share. In the downward stage of the cycle, the advantage of cost leading enterprises will be easier to win. In the past, the impact of free range farmers was greater. With the increase of scale, the production capacity change of scale field will determine the inflection point of the industry. From the average market value, most companies have been at or close to historical lows, and the pig sector has long-term investment space. We are optimistic about Wens Foodstuff Group Co.Ltd(300498) and Muyuan Foods Co.Ltd(002714) of pig enterprises for a long time. We suggest paying attention to New Hope Liuhe Co.Ltd(000876) , Fujian Aonong Biological Technology Group Incorporation Limited(603363) , Jiangxi Zhengbang Technology Co.Ltd(002157) , etc.
Poultry: continue to recommend yellow chicken plate
Investment suggestion: in terms of yellow chicken, due to the long loss time, the yellow chicken industry has the earliest capacity removal, and the continuous capacity removal makes the current stock volume at a low level in the past three years, and the pace of removal tends to be transmitted from the parents’ generation field to the grandparents’ field. The elimination of parental breeding chickens is actually similar to the elimination of fertile sows. Once the stock of breeding chickens decreases, it will take at least three quarters to restore production capacity. Therefore, the fundamentals of yellow chickens in 2022 are worth looking forward to. With the withdrawal of small and medium-sized production capacity, the industry concentration is further improved. We continue to be optimistic about the investment opportunities of Huangji plate, and recommend Wens Foodstuff Group Co.Ltd(300498) , Jiangsu Lihua Animal Husbandry Co.Ltd(300761) , Hunan Xiangjia Animal Husbandry Company Limited(002982) .
Dynamic insurance: focus on the growing dynamic insurance leader in the period of industry reform
Investment suggestions: the reform of the breeding industry has promoted the transformation of the competition pattern of the animal protection industry, accelerated the trend of large-scale breeding, normalized the prevention and control of non plague conditions, significantly raised the industry access threshold with the new GMP certificate, accelerated the industry reform of feed end prohibition and breeding end restriction, and the trend of large-scale breeding enterprises gathering into large-scale animal protection enterprises is becoming more and more obvious; The competition of animal protection enterprises has entered the stage of seedling drug linkage and collaborative promotion of efficient breeding services from the era of single product competition. We are optimistic about Tianjin Ringpu Bio-Technology Co.Ltd(300119) with undervalued value and high growth target. We suggest paying attention to Wuhan Keqian Biology Co.Ltd(688526) , Jinyu Bio-Technology Co.Ltd(600201) , Pulike Biological Engineering Inc(603566) , China Animal Husbandry Industry Co.Ltd(600195) , Tecon Biology Co.Ltd(002100) .
Planting: wheat and corn prices continue to fluctuate at a high level
Investment suggestions: grain prices remain high and seed demand remains high. On December 24, 2021, the Standing Committee of the National People’s Congress issued a decision on Amending the seed law of the people’s Republic of China. The revision of the seed law has long been conducive to the improvement of industry concentration and the increase of market share of leading companies. From December 25 to 26, 2021, the central rural work conference emphasized the expansion of soybean and oil plants. The commercialization of medium – and long-term genetically modified seeds is expected to continue. Be optimistic about Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Shandong Denghai Seeds Co.Ltd(002041) , Winall Hi-Tech Seed Co.Ltd(300087) and pay attention to Jiangsu Provincial Agricultural Reclamation And Development Co.Ltd(601952) .
Feed: the feed price of finishing pigs continues to rise slightly. Investment suggestion: it is expected that the overall feed production and sales will continue to grow in the first half of 2022. The rise in the price of feed raw materials slightly squeezes the gross profit margin of feed processing, but the leading enterprises have a strong ability to transfer costs to downstream breeding plants, and the market share is expected to increase. It is suggested to focus on Guangdong Haid Group Co.Limited(002311) and Hefeng animal husbandry.
Pets: be optimistic about the consumption and growth attributes of pet tracks
Investment suggestion: we believe that China’s pet industry is still in the fundamentals of rapid development. Although the epidemic has led to a decline in the growth rate of China’s pet consumption, we are still optimistic about the development prospect of the pet consumption market in the post epidemic era; With the declining Engel coefficient of pet consumption and the rising trend of pet consumption upgrading, the proportion of consumption in pet diagnosis and treatment, pet supplies, pet nutrition and health care, pet services and other fields is expected to continue to rise in the future. Compared with other market segments, pet food and pet medical have natural advantages. We are optimistic about pet food targets Yantai China Pet Foods Co.Ltd(002891) and Petpal Pet Nutrition Technology Co.Ltd(300673) and pet health care and medical related targets Tianjin Ringpu Bio-Technology Co.Ltd(300119) .
In terms of industry rating and investment strategy, pig breeding enterprises with strong cost control ability and high growth can resist risks in the downward period. We believe that the next round of poultry boom cycle may precede pigs, while white feather chickens or yellow feather chickens; In terms of seed industry, high grain prices and the promotion of transgenic commercialization will continue to benefit the prosperity of seed industry; In terms of feed, the recovery of pig production capacity will support feed demand; In terms of dynamic insurance, it is in the period of industry reform. With the improvement of industry concentration, the advantages of leading enterprises will be gradually clear; Be optimistic about the consumption and growth attributes of pet track. Give the industry a rating of “recommended”.
Risk tips focus on the risk that the company’s performance is lower than expected, the risk of sharp market fluctuation caused by emergencies, the risk of epidemic disease in the breeding industry, the risk of policy uncertainty, the risk of price fluctuation, the risk of extreme weather, etc.
