Breeding sector: 1) live pigs: pig prices stopped falling and rebounded within the week, production capacity continued to be reduced, self breeding was in the loss range, and attention was paid to the layout opportunities on the left. On December 24, 2021, the average prices of pigs and pork in 22 provinces and cities were 16.30 yuan / kg and 25.18 yuan / kg respectively. This week, the prices stopped falling and rebounded, with a weekly increase of 1.9% and 0.6% respectively; By November 2021, the number of fertile sows in China was 42.96 million, down 1.2% month on month. The production capacity continued to be reduced. Compared with the normal holding of 41 million, there was still some room for decline. There was abundant short-term pork supply, and it was expected that the price would not show a significant upward trend. On December 31, 2021, the profits of purchased piglets and self bred piglets were 167.80 yuan / head and – 39.77 yuan / head respectively, with a month on month change of + 36.8%, – 8.2%, a year-on-year decrease of – 75.31% and – 101.8%. Self bred piglets were in a state of loss for three consecutive weeks. On December 31, the average price of piglets in 22 provinces and cities was 28.74 yuan / kg, with a week on week change of – 0.8%. The price of piglets fell for four consecutive weeks. We believe that the willingness of piglets in the industry to make up the column is still low, Farmers may continue to be pessimistic about the market in the first half of next year. On the other hand, self breeding and autotrophy will enter the loss range again. In the medium term, the reduction of production capacity may be expected to accelerate. It is suggested to pay attention to the opportunities on the left side of cycle reversal. It is suggested to pay attention to: Wens Foodstuff Group Co.Ltd(300498) , Tecon Biology Co.Ltd(002100) , Fujian Aonong Biological Technology Group Incorporation Limited(603363) , Muyuan Foods Co.Ltd(002714) . 2) Poultry: the capacity removal of yellow feather chicken is basically completed, and the chicken price is expected to reverse. In terms of yellow feather chicken, the average prices of fast chicken, medium speed chicken, native chicken and black bone chicken were 6.77 yuan / 500g, 7.29 yuan / 500g, 8.43 yuan / 500g and 7.29 yuan / 500g respectively on December 31, 2021. The weekly ring ratio changed by – 2.6%, + 1.4%, – 3.3% and + 3.0% respectively. Among them, the price of medium speed chicken fluctuated and stabilized, and the short-term prices of fast chicken and native chicken were still dominated by decline. According to the data of poultry branch of China Animal Husbandry Association, at present, the stock of parents’ generation of yellow feather chicken has basically decreased to the normal level in 2018. In the fourth quarter, retail investors are pessimistic about the industry expectation for the Spring Festival in 2022, and their willingness to invest seedlings is low. The supply may decline rapidly after the Spring Festival. Therefore, there is a strong certainty about the contraction trend of commodity generation supply in 2022, We believe that in the short term, due to seasonal factors such as the consumption off-season in the fourth quarter, the chicken price is in a depressed state. In the medium and long term, the chicken price may reverse under the background of capacity deregulation and supply contraction. It is suggested to pay attention to: Jiangsu Lihua Animal Husbandry Co.Ltd(300761) , Wens Foodstuff Group Co.Ltd(300498) , Hunan Xiangjia Animal Husbandry Company Limited(002982) . 3) Beef cattle breeding: in September 2020, the general office of the State Council issued the opinions on promoting the high-quality development of animal husbandry, which put forward the goal of “maintaining the annual self-sufficiency rate of beef and mutton at about 85%. There is a large gap between supply and demand in the industry. Pay attention to the opportunities of large-scale beef cattle breeding. It is suggested to pay attention to: Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) .
Animal protection sector: the policy is clear to promote the market-oriented and standardized development of the industry, and the leader of R & D + production + market advantage will benefit. Under the background of the effective promotion of the policy of “fighting first and then supplementing” and the gradual and complete abolition of the policy of political seedling collection in 2025, veterinary biological products usher in the era of market-oriented development; Since July 2020, there has been a comprehensive “Prohibition of resistance” in feed, a “restriction of resistance” and “reduction of resistance” in aquaculture, and the demand for high-end therapeutic veterinary chemicals has ushered in rapid growth; The new GMP standard will be implemented in June 2022, the industry access threshold will be raised, the backward production capacity will be cleared away, and the competition pattern is expected to be quickly optimized. In the medium and long term, industry leaders with the advantages of joint research and development of front-end scientific research institutes + high-quality production capacity + market channels are expected to make full profits. Key recommendations China Animal Husbandry Industry Co.Ltd(600195) : market seedlings and high-end chemical drugs support high performance growth. It is recommended to pay attention to: Jinyu Bio-Technology Co.Ltd(600201) , Hvsen Biotechnology Co.Ltd(300871) , Tianjin Ringpu Bio-Technology Co.Ltd(300119) .
Seed industry sector: the era of transgenic commercialization may accelerate, and pay attention to the long-term layout opportunities of seed industry. The emphasis on food security continued to rise, and the seed industry revitalization action plan was adopted in July 2021; In November 2021, the Ministry of agriculture and rural areas issued the decision of the Ministry of agriculture and rural areas on amending some seed industry regulations (Draft for comments), adding relevant rules on the approval of genetically modified crop varieties; On December 26, China’s rural work conference once again proposed “vigorously promoting seed sources and other key agricultural core technologies”. As an important prerequisite for food security, seed industry security has clear industrial policy direction, the expansion space of transgenic breeding can be expected, and the leader of breeding technology is expected to benefit. It is suggested to pay attention to: Winall Hi-Tech Seed Co.Ltd(300087) , Shandong Denghai Seeds Co.Ltd(002041) , Beijing Dabeinong Technology Group Co.Ltd(002385) , Yuan Longping High-Tech Agriculture Co.Ltd(000998) .
Risk tips: sudden epidemics or natural disasters, repeated covid-19 epidemics, and the implementation progress of industrial policies is less than expected.
