I. core view
Rating and Strategy: the decline of pig price has stopped recently, and the cyclical reversal is imminent, so as to maintain the “optimistic” rating of the breeding industry. The sector will deduce β Market, focusing on the four golden pigs that are obviously underestimated. High grain prices callback, follow-up or high shocks. Under the background of continuous geographical conflicts, the importance of China’s planting industry remains unchanged, maintaining the “optimistic” rating of the industry. Combined with the valuation, the breeding sector is still recommended.
1. Aquaculture industry chain
1) pig industry: maintain the “optimistic” rating, and currently focus on recommending four golden pigs that are obviously underestimated. Last week, the average price of pigs in 22 provinces and cities was 12.23 yuan / kg, up 0.11 yuan per week; Piglets were 24.73 yuan / kg, up 0.36 yuan per week; Binary sows were 32.65 yuan / kg, up 0.03 yuan per week. The average head loss of the self breeding and autotrophic model is estimated to be 531 yuan, 18 yuan less than that of last week. Pig prices have stopped falling and rising recently, and the cyclical inflection point is becoming clearer and clearer. At present, the high food price makes it difficult for the breeding cost to stay high, superimposed with the low pig price, the pig industry is still in the stage of substantial loss, and the capacity removal will continue. Maintain the judgment that the capacity removal of the industry has accelerated in the near future and the cyclical reversal of pig price is imminent. In terms of valuation, the market value of most individual stocks is still below the reasonable value, with a good margin of safety, maintaining the “optimistic” rating of the sector. Four gold pigs that have been significantly underestimated are highly recommended, and four golden pigs that have been significantly underestimated, with the Muyuan Foods Co.Ltd(002714) \ .
2) yellow chicken industry: maintain the “optimistic” rating and recommend Jiangsu Lihua Animal Husbandry Co.Ltd(300761) . In February, the price of Lihua yellow chicken was 14.16 yuan / kg, down 0.3 yuan / kg per month; Wen’s yellow chicken costs 14.63 yuan / kg, up 0.65 yuan per month. Since Q4 in 2021, the price of yellow chicken has always been above the cost line, and this trend is expected to continue into the second half of the year. In the medium and long term, environmental protection constraints and the transformation of live birds to fresh ice will raise the industry threshold, accelerate the withdrawal of small and medium-sized production capacity and optimize the competition pattern. Maintain the “optimistic” rating of the industry, mainly recommend Jiangsu Lihua Animal Husbandry Co.Ltd(300761) , and pay attention to Wens Foodstuff Group Co.Ltd(300498) and Hunan Xiangjia Animal Husbandry Company Limited(002982) .
3) dynamic insurance: give a good rating, with emphasis on Wuhan Keqian Biology Co.Ltd(688526) . On the eve of the reversal of the pig cycle, the vaccine boom was under short-term pressure. In the medium and long term, the improvement of large-scale breeding level, the upgrading of vaccine technology and the listing of new products will drive the expansion of the animal protection market. At the same time, the new GMP certificate certification, feed prohibition and breeding restriction, as well as the improvement of the biological security level of the breeding industry will promote the reform of the animal protection industry and optimize the competition pattern. PE stocks are currently at the bottom of history, with a high margin of safety in valuation, and are given a positive rating. Stocks with reasonable valuation and R & D advantages are recommended Wuhan Keqian Biology Co.Ltd(688526) .
2. Planting industry chain
1) planting: maintain the “optimistic” rating, and highlight Jiangsu Provincial Agricultural Reclamation And Development Co.Ltd(601952) . The development of planting industry is protected by policies, which is of great importance. The recent conflict between Russia and Ukraine has affected the stability of global grain trade. If the conflict cannot be stopped quickly, it will affect the grain production of major producing countries, tighten the relationship between global grain supply and demand in 22 / 23, and increase the driving force for the rise of grain prices in China’s foreign markets. We judge that global food prices will remain high and volatile in 2022, maintain the “optimistic” rating of the industry, and recommend Jiangsu Provincial Agricultural Reclamation And Development Co.Ltd(601952) .
2) seed industry: maintain the “optimistic” rating, focusing on Shandong Denghai Seeds Co.Ltd(002041) and Yuan Longping High-Tech Agriculture Co.Ltd(000998) . The policy supports the technological upgrading of the seed industry, and the commercialization of genetically modified products of staple grain seeds is approaching. The commercialization of genetically modified seeds will take the lead in corn and soybean crops, which will help open the development space of the seed industry market and optimize the competition pattern of the industry. The leading enterprises that have advanced the research and development of genetically modified seeds are expected to occupy the first mover advantage and gain more market share. Maintain the long-term “optimistic” rating of the industry, especially the investment opportunities of corn seed industry. In terms of individual stocks, focus on Shandong Denghai Seeds Co.Ltd(002041) , Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Beijing Dabeinong Technology Group Co.Ltd(002385) .
II. Market Review
The agricultural index rose ahead of the market, mainly driven by the rise of breeding and feed. 1. Last week, the Shenwan agricultural index rose 2.07%. Over the same period, the Shanghai Composite Index rose 2.19% and the Shenzhen Composite Index rose 1.28%. The performance of the agricultural sector was significantly better than that of the big market. 2. As for the secondary sub industry, except for the decline of three sub industries such as animal health care, the other five sub industries all rose, among which aquaculture, feed and planting ranked among the top three; 3. The top 10 gainers are mainly concentrated in the breeding and feed sector, and the top 10 losers are concentrated in the animal health sector. The top three stocks in terms of growth were Zhongnongfa Seed Industry Group Co.Ltd(600313) , Fujian Wanchen Biotechnology Co.Ltd(300972) and Xinjiang Talimu Agriculture Development Co.Ltd(600359) .
III. industry data
Pigs: in the 13th week, the average ex factory price of pigs in 22 provinces and cities across the country was 12.23 yuan / kg, with a weekly increase of 0.11 yuan / kg; The average loss of self breeding heads in the main pig producing areas in China was 531 yuan. By the end of January 2021, the number of fertile sows in China was 42.9 million, a year-on-year decrease of 3.7%;
Broilers: in the 13th week, the average price of chicken seedlings in Yantai, Shandong Province was 1.58 yuan / feather, with a weekly increase of 0.72 yuan / feather; The average price of white feather chicken in front of the shed was 4.25 yuan / kg, with a weekly increase of 0.32 yuan / kg; In the 13th week, the single feather profit of broiler breeding was 1.12 yuan;
Feed: according to the statistics of Boya Hexun, in the 13th week, the average price of broiler feed was 4.02 yuan / kg, unchanged on a weekly basis; The price of fattening pig feed was 3.8 yuan / kg, with a weekly increase of 0.02 yuan / kg;
Aquatic products: in the 13th week, the sea cucumber in Shandong Weihai bulk wholesale market was 180 yuan / kg, with a weekly drop of 20 yuan / kg; The price of scallops was 8 yuan / kg, unchanged on a week-on-week basis; The price of shrimp was 310 yuan / kg, unchanged on a week-on-week basis; The price of abalone is 100 yuan / kg, with a weekly drop of 10 yuan / kg;
Sugar, cotton, corn, soybean meal, wheat and rice: in the 13th week, the spot price of Nanning white sugar was 5795 yuan / ton, with a weekly increase of 19 yuan / ton; The price of 3268 tons of Chinese cotton / week rose by RMB 2288; The average purchase price of corn in China was 2768 yuan / ton, up 12 yuan / ton per week; The average spot price of soybean meal in China was 4741 yuan / ton, down 439 yuan / ton in the week; In the 13th week, the average spot price of Chinese wheat was 3187 yuan / ton, down 25 yuan / ton per week; The average price of Japonica Rice in China was 2758 yuan / ton, unchanged on a weekly basis;
IV. risk warning
The price changes of raw materials such as sudden epidemic diseases, livestock and poultry, aquatic products and corn are less than expected
