Core view
[market performance] last week, the CSI 300 index closed at 417457 points, up or down – 2.14% in one week and – 15.50% year to date; The Shanghai Composite Index closed at 321224, up or down – 1.19% in one week and – 11.75% year to date. Among the 31 primary industries in Shenwan, the top three rose last week were coal (5.84%), agriculture, forestry, animal husbandry and fishery (3.93%) and real estate (3.84%); The top three declines were computers (- 4.10%), power equipment (- 4.05%) and building materials (- 3.72%). Among them, the agriculture, forestry, animal husbandry and fishery sector rose or fell by + 3.93% last week, ranking second. Since the beginning of the year, the agriculture, forestry, animal husbandry and fishery sector has increased or decreased by – 2.78%, ranking fifth.
[key information]
[Ministry of agriculture and rural areas: the Ministry of Finance defines the key work and package support policies for grain production in 2022] recently, the Ministry of agriculture and rural areas and the Ministry of finance have defined the key work and package support policies for grain production in 2022, requiring all localities to go all out to ensure a bumper harvest of summer grain and wheat, expand the planting of soybean oil by every means, keep a close eye on stabilizing the price and supply of agricultural materials, do a good job in agricultural disaster prevention, mitigation and relief, and stabilize the basic situation of agriculture, To provide strong support for the steady and healthy development of economy and society. (source: Ministry of agriculture and rural areas)
[Key announcement]
[ Hefei Fengle Seed Co.Ltd(000713) ] annual performance express in 2021: the operating revenue was about 2.617 billion yuan, an increase of 6.54% year-on-year; The net profit attributable to the shareholders of the listed company was about 183 million yuan, a year-on-year increase of 263.05%; The basic earnings per share was 0.298 yuan, a year-on-year increase of 159.36%. From January to June 2021, Hefei Fengle Seed Co.Ltd(000713) the operating revenue is composed of 79.03% of agricultural chemicals, 11.8% of spices and 9.17% of seeds.
[opinion]
Pig breeding: the price of pigs rebounded slightly, and the situation of long-term supply and demand tightening remains unchanged. According to the data of zhuyitong, on March 25, the price of pigs was 12.38 yuan / kg, up 4.47% on a weekly basis, mainly due to the slow pace of farmers in some provinces and the strict control of covid-19 epidemic in these areas, which made it difficult for pigs to be sold. The government’s purchase and storage action is expected to underpin pig prices and stabilize market sentiment. However, the fundamentals of pig supply and demand have not changed. The downward space of pig price is limited, but the upward momentum is limited. We expect that the pig price will still be in the bottom shock stage in the short term, and the pig price may rebound in the second half of the year.
Seed industry: supportive policies have been issued frequently, and the seed industry has maintained a high boom. Recently, favorable policies have been launched frequently, which will promote the downstream demand and maintain the high prosperity of the seed industry. In terms of the market, the geographical conflict superimposes the epidemic situation, inflation and other factors, and the grain price may continue to remain high. Although the transmission of international grain prices to China’s grain prices is limited, China’s grain prices will still maintain an upward trend. Under high grain prices, farmers’ enthusiasm for growing grain will be greatly improved. Under the strong policy support and good market environment, the seed industry has great allocation opportunities.
Investment advice
Pig breeding: at present, the downstream consumer demand of the pig market is weak, the conflict between Russia and Ukraine increases the breeding cost, the pig price is in a state of shock, 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, stable operation and excellent disease prevention and control.
Seed industry: affected by the conflict between Russia and Ukraine, the Shenzhen Agricultural Products Group Co.Ltd(000061) supply is tight, and the leading seed industry is expected to increase its market share with policy support. 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.
