Recently, according to the data released by the Ministry of agriculture and rural areas, pork prices continue to decline, which is currently at a low level since 2020, and breeding enterprises are generally in a state of loss.
Nevertheless, the research enthusiasm of institutions for pig enterprises is rising. On March 13, in the latest research information disclosed by Wens Foodstuff Group Co.Ltd(300498) , Tangrenshen Group Co.Ltd(002567) and Tangrenshen Group Co.Ltd(002567) , several top flow institutions such as Hillhouse capital, Danshui spring, GF fund and Harvest Fund were listed.
The analysis points out that the central government has recently carried out the collection and storage of two batches of frozen pork, which helps to help pig enterprises clear their production capacity and is good for the pig breeding industry, which is currently at a huge loss Wens Foodstuff Group Co.Ltd(300498) said in the survey that it is optimistic that the pig price may enter the upward channel of the next cycle after the third quarter of 2022.
listed pig enterprises welcome the research hot again
Since the second half of 2020, pork prices have been continuously adjusted, and the whole pig breeding industry has entered a new round of downward channel of pig cycle. At present, pig prices have fallen below the breakeven point, and breeding enterprises are generally in a state of loss.
According to the latest monitoring by the Ministry of agriculture and rural areas, the average price of pigs in China in February was 14.06 yuan per kilogram, which has fallen below the average breeding cost line. A raw pig lost about 150 yuan and fell to 13.21 yuan per kilogram last week. The average price of pork wholesale market last week was 18.42 yuan per kilogram, down 3.3% month on month and 52.2% year-on-year, which has fallen for four consecutive weeks.
At present, due to the superposition of supply increase and seasonal consumption decrease, the price of live pigs continues to decline, and the price is at a low level since 2020.
Pig prices fell, and enterprises in the industry were generally in a state of loss Jiangxi Zhengbang Technology Co.Ltd(002157) expects a loss of 18.2 billion yuan in 2021, and the Wens Foodstuff Group Co.Ltd(300498) performance express shows a loss of 13.337 billion yuan. In addition, New Hope Liuhe Co.Ltd(000876) , Tech-Bank Food Co.Ltd(002124) , Fujian Aonong Biological Technology Group Incorporation Limited(603363) and other expected losses are also more than 1 billion yuan.
It is worth mentioning that the secondary market performance of some pork listed enterprises does not seem to be affected, and the recent growth of Wens Foodstuff Group Co.Ltd(300498) , Tangrenshen Group Co.Ltd(002567) , Shenzhen Kingsino Technology Co.Ltd(002548) , etc. is not small. Up to now, the market value has rebounded from 120 billion yuan.
In this context, the research enthusiasm of the institution for pork listed enterprises has increased significantly recently, with the active participation of public funds and private institutions. Recently, the institution has conducted another research on Wens Foodstuff Group Co.Ltd(300498) , Tangrenshen Group Co.Ltd(002567) , etc. Among them, Wens Foodstuff Group Co.Ltd(300498) 's research activities have attracted the participation of hundreds of institutions.
On March 13, Wens Foodstuff Group Co.Ltd(300498) disclosed the research information of institutions, which showed that 107 institutions surveyed the company on March 11, including the head public offering of GF fund, Harvest Fund and Huaxia Fund, and investment institutions such as Hillhouse capital and freshwater spring also actively participated Tangrenshen Group Co.Ltd(002567) also disclosed the latest research information on March 13. GF and Sealand Securities Co.Ltd(000750) organized a group to conduct research on the company.
According to the statistics of the reporter of the securities times, since March, the frequency of institutional research on pork stocks has increased significantly, including Wens Foodstuff Group Co.Ltd(300498) , Tangrenshen Group Co.Ltd(002567) , Muyuan Foods Co.Ltd(002714) , Shenzhen Kingsino Technology Co.Ltd(002548) and many other pig breeding enterprises, among which Wens Foodstuff Group Co.Ltd(300498) , Tangrenshen Group Co.Ltd(002567) , etc.
feed price rise intensifies losses
From the research information, the organization pays more attention to the problems faced by pig enterprises, such as the rise of feed prices.
Recently, the conflict between Russia and Ukraine brought uncertainty and fluctuation to the supply and price of bulk Shenzhen Agricultural Products Group Co.Ltd(000061) raw materials around the world, which directly caused the sharp rise in the price of some feed raw materials and seriously affected the stability of the global Shenzhen Agricultural Products Group Co.Ltd(000061) supply chain. At the same time, the war has a great impact on the psychological expectations of the global Shenzhen Agricultural Products Group Co.Ltd(000061) traders, indirectly affecting the price of Shenzhen Agricultural Products Group Co.Ltd(000061) .
In this regard, Wens Foodstuff Group Co.Ltd(300498) accepted the investigation of the organization and said that the rise in the price of feed raw materials is a problem that the whole breeding industry needs to face together. Compared with small and medium-sized farmers, large-scale breeding enterprises often have advantages in feed cost control. The company has actively taken measures to effectively control the feed cost by giving full play to the advantages of centralized collection of feed raw materials and feed nutrition formula technology, increasing the use scale of advantageous raw materials. From January to February 2022, the production cost of pig feed increased by about 5% year-on-year.
Yunnan Shennong Agricultural Industry Group Co.Ltd(605296) also disclosed the latest research information on March 14. With regard to the rise in feed prices concerned by the organization, the company said that the rise in raw material prices would have an adverse impact on feed sales, but the gross profit margin of feed sales would remain relatively stable. Because with the rise of the price of raw materials, the terminal products in the feed industry will increase the selling price to ensure their reasonable profits. At present, the main reason for the impact on the feed business is that the pig price is running at a low level. The increase in feed price will directly lead to the increase of pig breeding and marketing cost and increase the breeding loss, resulting in the reduction of feed purchase by farmers, thus affecting the development of feed business.
The losses of pig breeding enterprises have increased, and there are rumors of bankruptcy of large pig enterprises in the market Wens Foodstuff Group Co.Ltd(300498) believes that the probability of bankruptcy of large pig enterprises is small. Normally speaking, the probability of bankruptcy is small as long as the capital leverage is not widely used. At the same time, large pig enterprises have many financing channels and strong pressure resistance. When the enterprise's capital is extremely difficult, it can also increase the capital return by selling piglets, pigs, sows and other assets, reduce the capital expenditure caused by the consumption of feed raw materials, and solve the urgent need. However, this method has a great impact on the speed of enterprise capacity expansion. It takes a long time for sows to recover, which is difficult, and even leads to the shrinkage of market scale.
In addition, the losses of pig enterprises have increased, and whether there are difficulties in enterprise financing is also a topic of concern for institutions Wens Foodstuff Group Co.Ltd(300498) said that from the perspective of the industry, the State supports the development of the pig industry and suggests that banks and other institutions should not withdraw or cut off loans to pig enterprises due to the phased difficulties of the downward pig cycle. From the perspective of individual cases, enterprises with high losses and liabilities have more difficulties in bank financing and higher financing costs.
pig price will stabilize in the third quarter
The reporter of the securities times observed the price trend of pig futures and found that the price of pig futures contract continues to decline recently, but the price of long-term pig futures contract has stabilized and rebounded, and the market has strong expectations for the rebound of pig price in the third quarter.
In the research activities, some listed companies have made predictions on the trend of pig price. Among them, Wens Foodstuff Group Co.Ltd(300498) it is estimated that from the supply side, the deregulation of pig production capacity will continue, and the future market trend mainly depends on the length and depth of deregulation of production capacity.
From the demand side, according to the experience of previous years, the traditional off-season for pork consumption is generally after the Spring Festival. At the same time, the spread of covid-19 pneumonia also inhibited residents' consumption. It is preliminarily estimated that the pig price will remain at a low position in the first half of 2022, and the de industrialization of industrial capacity will accelerate. It is optimistically estimated that after the third quarter of 2022, pig prices may enter the upward channel of the next cycle; It is pessimistic to estimate that 2022 is still at the social average breakeven line, and it may take 2023 to enter the upward channel of the next cycle.
The Pacific Securities Co.Ltd(601099) securities research believes that the central reserve's collection and storage of frozen pork has a limited impact on supply and demand, and the depressed trend of pig price 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 rise in costs is superimposed on the downturn in pig prices, the range of industrial losses is expanded, the enterprise capital chain is further strained, and the driving force for capacity removal is strengthened. It is expected that the capacity removal or acceleration in the next few months, and the pig price is expected to hit the bottom and reverse in the third quarter.
Dongxing Securities Corporation Limited(601198) said that after the Spring Festival, the pig price quickly opened a second round of bottom exploration. At present, the pig price is still hovering at the bottom, and there is a possibility of further downward exploration. In addition, the sharp rise in feed price caused by the current bulk Shenzhen Agricultural Products Group Co.Ltd(000061) overall price increase will lead to the high breeding cost, and the continuous loss will further promote the industry to take the initiative to reduce production capacity. In 2022, Pig prices may start the next rising cycle.
