Core view
[market performance] last week, the CSI 300 index closed at 430652 points, up or down – 4.22% in one week and – 12.83% year to date; The Shanghai Composite Index closed at 330975, up or down – 4.00% in one week and – 9.07% year to date. Among the 31 primary industries in Shenwan, the top three declines were social services (- 7.91%), household appliances (- 7.54%) and non-ferrous metals (- 7.03%). The agriculture, forestry, animal husbandry and fishery sector rose or fell – 3.95% last week, ranking ninth. Since the beginning of the year, the agriculture, forestry, animal husbandry and fishery sector has increased or decreased by – 4.43%, ranking sixth.
[key information]
[Ministry of agriculture and rural areas deploys prevention and control of wheat stripe rust in spring] at present, wheat in main production areas such as Huang Huai Hai has successively entered the stage of returning to green and jointing growth, which is a key period for the prevention and control of wheat diseases, pests and weeds. On March 11, according to the overall arrangement of the action of “two increases and two reductions”, the Ministry of agriculture and rural areas held a video conference on prevention and control, which required to focus on the prevention and control of wheat stripe rust, effectively reduce the harm of sheath blight, stem base rot and weeds in wheat field, move the pass forward, protect the front and rear, and reduce the risk of pest outbreaks. (source: Ministry of agriculture and rural areas)
[Key announcement]
[ Luoniushan Co.Ltd(000735) ] February 2022 livestock industry sales briefing: the company sold 24300 pigs in February 2022, with a sales revenue of 616007 million yuan, with month on month changes of – 46.14% and – 48% respectively, and year-on-year changes of 2.36% and – 23.05% respectively. From January to February 2022, the company sold 69400 pigs, a year-on-year increase of 37.01%; The cumulative sales revenue was 180057100 yuan, a year-on-year increase of 9.94%.
[opinion]
Pig breeding: the feed cost is increased, and the de production of pigs is expected to accelerate. According to pig Yitong data, on March 11, the price of live pigs was 12.15 yuan / kg, down 1.30% on a weekly basis, and the bottom of pig prices in East China, central China, South China and other places fluctuated. At present, the pig stock is still high and the supply side is loose. In terms of demand, it is in the off-season after the festival, so it is difficult to significantly increase pig consumption, and the overall pig price may not rise sharply in the near future. Pig prices continued to fluctuate at the bottom, the conflict between Russia and Ukraine increased breeding costs, the deregulation of production capacity is expected to accelerate, and the inflection point of the cycle is expected to accelerate.
Seed industry: the pressure of bulk price increase drives the increase, and pay attention to the investment opportunities of seed industry. The bulk Shenzhen Agricultural Products Group Co.Ltd(000061) rose in the early stage due to covid-19 epidemic and extreme weather, and the recent conflict between Russia and Ukraine exacerbated the fluctuation of grain prices. Russia is the world’s largest exporter of wheat, and Ukraine is an exporter of wheat, corn and other Shenzhen Agricultural Products Group Co.Ltd(000061) . The conflict between the two countries may affect spring sowing and grain export, or cause Shenzhen Agricultural Products Group Co.Ltd(000061) prices to continue to rise, driving up the demand of the seed industry and accelerating the process of destocking. It is expected that the prosperity of the seed industry will be further boosted. We believe that the rise in bulk Shenzhen Agricultural Products Group Co.Ltd(000061) prices is expected to drive the continued prosperity of the seed industry, and the seed industry with core variety advantages is expected to continuously improve its market share. We suggest paying attention to the leading seed industry with obvious variety advantages.
Investment advice
Pig breeding: pig prices continue to fluctuate at the bottom, adding to the conflict between Russia and Ukraine, increasing breeding costs, the deregulation of production capacity is expected to accelerate, and the inflection point of the cycle is expected to accelerate. It is suggested to pay attention to breeding enterprises with significant cost control advantages and stable operation.
Seed industry: enterprises with core biological breeding technology are expected to take advantage of the policy to continuously improve their market share. It is suggested to pay attention to the leading seed industry with obvious advantages in the field of transgenic.
Risk tips
Macroeconomic fluctuations; Non plague situation; Extreme weather effects, etc.
