77 companies in SW agriculture, forestry, animal husbandry and fishery industry have released performance forecasts. A total of 33 enterprises are expected to achieve positive year-on-year growth in net profit attributable to their parent companies, accounting for 44.16%. Among them, the upper limit of year-on-year growth of 10 enterprises is more than 100%, and the upper limit of year-on-year growth of 9 enterprises is between 50% – 100%.
Performance outlook of 2021 annual report: the performance of breeding sector is under pressure, and the cycle of seed industry resonates with growth. We make forward-looking predictions on the performance of key companies: 1) for the live pig sector, it is expected that the overall performance of the sector will be under pressure due to the significant year-on-year decline in pig prices in 2021. Among them, Muyuan Foods Co.Ltd(002714) 2021 is expected to achieve a net profit of 6.5 billion ~ 8 billion yuan, a year-on-year decrease of 70.86% ~ 76.32%. It is a rare profitable pig enterprise with prominent growth characteristics. 2) In the feed sector, the revenue of Guangdong Haid Group Co.Limited(002311) 2021 was + 43.79% to 86.740 billion yuan year-on-year, and the net profit attributable to the mother was – 36.54% to 1.600 billion yuan year-on-year. Its pig business suffered a large loss, but the feed business still grew strongly. We believe that the fluctuation of pig cycle will not affect the core of Haida growth stocks and continue to be optimistic about the evolution of entropy reduction Guangdong Haid Group Co.Limited(002311) . 3) As for the poultry sector, due to the rise of feed costs and the downturn of poultry prices, the overall performance of the sector is poor in 2021. It is expected that the performance of Fujian Sunner Development Co.Ltd(002299) and Hunan Xiangjia Animal Husbandry Company Limited(002982) with a high proportion of food business is better than that of their peers. 4) In the dynamic insurance sector, the downturn of pig price in 2021 restrained the demand for dynamic insurance, and the overall performance growth of the sector is expected to slow down. However, Wuhan Keqian Biology Co.Ltd(688526) still relies on the advantages of platform R & D to expand multiple channels and achieve high profit growth. 5) The planting chain benefits from the reversal of corn inventory cycle, and 2021 is expected to be the profit inflection point of high-quality enterprises in the planting chain.
Investment suggestion: the breeding sector continues to pick up, and the seed industry policy is advancing steadily. 1) Pig: we believe that 2022 is the best stage to lay out the pig sector in advance, and the pig cycle will probably reverse in 2023. It is expected that in 2022q2, with the decline of pig price and the rise of feed cost, the cash loss of farmers will be accelerated, and the stock of fertile sows may continue to be removed, which is expected to further catalyze the sector. At the same time, meat products benefit from the decline in pig prices, and the profit is expected to be further improved in 2022. Recommendations: Zhejiang Huatong Meat Products Co.Ltd(002840) , Fujian Aonong Biological Technology Group Incorporation Limited(603363) , Leshan Giantstar Farming&Husbandry Corporation Limited(603477) , Tecon Biology Co.Ltd(002100) , Dongrui Food Group Co.Ltd(001201) , COFCO Jiakang, Muyuan Foods Co.Ltd(002714) , Wens Foodstuff Group Co.Ltd(300498) , etc; Attention: Henan Shuanghui Investment & Development Co.Ltd(000895) , Longda food, etc. 2) Yellow feather chicken: it is expected that the profit of yellow chicken breeding will improve in 2022. It is recommended that high-quality breeding targets: Jiangsu Lihua Animal Husbandry Co.Ltd(300761) , Hunan Xiangjia Animal Husbandry Company Limited(002982) , Wens Foodstuff Group Co.Ltd(300498) . 3) White feather chicken: the whole industrial chain is sinking towards food deep processing. It is suggested to pay attention to the bottom: Springsnow Food Group Co.Ltd(605567) , Fujian Sunner Development Co.Ltd(002299) , Shandong Yisheng Livestock & Poultry Breeding Co.Ltd(002458) , Shandong Xiantan Co.Ltd(002746) . 4) Animal protection: the value of sector allocation is weaker than that of aquaculture. It is recommended to pay attention to Wuhan Keqian Biology Co.Ltd(688526) , China Animal Husbandry Industry Co.Ltd(600195) , Pulike Biological Engineering Inc(603566) . 5) Seed industry: pay attention to the rise of global grain prices caused by the conflict between Russia and Ukraine and the excessive development of global currencies. In 2022, the fundamentals of wheat and corn in China are strongly supported. The rise of grain prices is conducive to the improvement of planting area and planting capital investment, and the head high-quality seed enterprises or both demand and profit. In addition, the implementation of GM is expected to accelerate. It is expected that the implementation of GM will reshape the pattern of seed industry, and the seed industry will usher in the resonance between cycle and growth. Recommendations: Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Beijing Dabeinong Technology Group Co.Ltd(002385) , Shandong Denghai Seeds Co.Ltd(002041) .
Risk tips: risks caused by bad weather; Potential risks caused by uncontrollable animal outbreaks.
