Core view
[market performance] last week, the CSI 300 index closed at 426590 points, up or down – 0.94% in one week and – 13.65% year to date; The Shanghai Composite Index closed at 325107, up or down – 1.77% in one week and – 10.68% year to date. Among the 31 primary industries in Shenwan, the top three rose last week were power equipment (- 0.15%), national defense and military industry (- 1.62%) and electronics (- 1.33%); The top three declines were architectural decoration (- 1.27%), building materials (- 0.16%) and media (- 0.64%). The agriculture, forestry, animal husbandry and fishery sector rose or fell – 2.12% last week, ranking 16th. Since the beginning of the year, the agriculture, forestry, animal husbandry and fishery sector has increased or decreased by – 6.46%, ranking seventh.
[key information]
[Taiwan Affairs Office of the State Council: the first anniversary of the promulgation and implementation of the “22 measures for agriculture and forestry” achieved various results] the first anniversary of the promulgation and implementation of the “22 measures for agriculture and forestry” achieved various results. This year’s No. 1 central document has made arrangements for comprehensively promoting the key work of rural revitalization, and clearly put forward the requirements of accelerating the development of facility agriculture, promoting the integration and development of the 123 industries in rural areas and strengthening the construction of talents in rural areas, which has pointed out the direction for the work of “three rural issues” this year. (source: Ministry of agriculture and rural areas)
[Key announcement]
[ Muyuan Foods Co.Ltd(002714) ] announcement on granting restricted shares to incentive objects: the company held the 7th Meeting of the 4th board of directors on March 14, 2022, deliberated and adopted the proposal on granting restricted shares to incentive objects. The board of directors considered that the grant conditions had been met and agreed to determine March 14, 2022 as the grant date to grant 59685191 restricted shares to 5577 incentive objects who met the grant conditions, The grant price is 30.52 yuan / share.
[opinion]
Pig breeding: the range of breeding losses is expanded, and the de industrialization of production capacity is expected to accelerate. According to the data of zhuyitong, on March 18, the price of live pigs was 11.98 yuan / kg, down 1.40% on a weekly basis. The sales volume of 10 listed pig enterprises in February decreased by 30.90% on a month on month basis, and the sales revenue of live pigs decreased by 18.48% on a month on month basis, mainly due to the weak terminal demand caused by the off-season of consumption after the festival and covid-19 epidemic. Subject to the dual pressure of low pig prices and rising costs, the loss range of pig enterprises is more serious, the capital chain of enterprises is further strained, and the driving force of capacity decentralization is strengthened. It is expected that there may be an accelerating trend in the next few months.
Seed industry: the policy continues to be strengthened, and the leading seed enterprises are expected to continuously improve their market share. The 2022 government work report proposed to accelerate the revitalization of the seed industry and strengthen the research, popularization and application of agricultural science and technology. At present, international breeding has entered the “4.0 era” of “conventional breeding + biotechnology + informatization”. China as a whole is still in the “follow-up” stage, and a new generation of independent and controllable gene editing tools need to be developed. We believe that enterprises with core biological breeding technology are expected to take advantage of the policy to continuously improve their market share. We suggest paying attention to the leading seed industry with obvious advantages in the field of transgenic.
Investment advice
Pig breeding: the pig price continues to decline, the downstream consumer demand is weak, the superposition of Russia Ukraine conflict increases the breeding cost, and the clearing of production capacity may show an accelerated trend. It is suggested to pay attention to breeding enterprises with significant cost control advantages and stable operation.
Seed industry: enterprises with variety advantages and core biological breeding technology are expected to take advantage of the policy to continuously improve the market share. It is suggested to pay attention to the leading enterprises with strong R & D strength and obvious advantages in the seed industry.
Risk tips
Macroeconomic fluctuations; Non plague situation; Food safety issues; Pig prices recovered less than expected.
