Breeding sector: 1) live pigs: the deep loss of the industry continues, and three batches of collection and storage are started. It is expected that the capacity removal is expected to accelerate in March, and continue to pay attention to the layout on the left side of the pig cycle. On March 20, 2022, the price of Sanyuan pig abroad was 11.90 yuan / kg, down 3.25% on a weekly basis and 57.35% on a year-on-year basis; By February 2022, China had 42.68 million fertile sows in stock, with a month on month decrease of 0.5%, and the production capacity continued to be reduced. As of April 1, 2022, the profit loss of outsourcing piglet breeding is 292.49 yuan / head, and the loss of self breeding is 531.05 yuan / head. As of April 1, the price of binary sows was 32.65 yuan / kg, which was basically the same month on month, with a year-on-year decrease of 58.43%. As of April 1, the price of piglets in 22 provinces and cities fell to 24.73 yuan / kg, with a week-on-week increase of 1.48% and a year-on-year decrease of 76.33%. Pig price and pig grain ratio remain low, and the third batch of collection and storage has been started. So far, 118000 tons have been collected and stored since the beginning of 2022. It is expected that from April to may 2022, the market will still face the peak brought by the inertia of reproduction, the probability of pig price will decline, and the deep losses of the industry will continue due to the impact of cost fluctuations. At the same time, the prices of binary sows and piglets will run low. It can be seen that the industry’s willingness to make up the market is weak. We believe that the elimination of reproduction capacity is expected to accelerate, continue to be optimistic about the layout opportunities on the left, and consider multiple factors such as the flexibility and certainty of marketing, capital status and the space for full cost reduction, Key recommendations for pig sector: Wens Foodstuff Group Co.Ltd(300498) , attention is recommended: Fujian Aonong Biological Technology Group Incorporation Limited(603363) , Hunan New Wellful Co.Ltd(600975) , Muyuan Foods Co.Ltd(002714) , Tech-Bank Food Co.Ltd(002124) , Leshan Giantstar Farming&Husbandry Corporation Limited(603477) . 2) Poultry: affected by Qingming consumption, epidemic situation and other factors, chicken prices generally rose during the week, and the boom is expected to continue. As of March 24, 2022, the average price of fast big chicken, medium speed chicken, native chicken and black bone chicken was 5.91 yuan / 6.78 yuan / 8.10 yuan / 8.63 yuan / 500g respectively, and the weekly ring ratio changed by – 5.74% / – 1.74% / – 4.59% / – 0.69% respectively, with a year-on-year change of – 13.09% / – 6.35% / – 3.11% / + 10.64% respectively. By 2021q4, the stock of yellow feather chicken’s parents in production has basically decreased to the normal level in 2018. The industry supply is tight, and the prosperity is expected to continue. We are optimistic about the leader of yellow chicken breeding industry with good cost control ability and growth. Key recommendations: Jiangsu Lihua Animal Husbandry Co.Ltd(300761) , suggestions: 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 deadline for the new version of GMP is approaching, and the leader of R & D + production + market advantage will benefit. 1) In the field of veterinary biological products, under the background of the effective promotion of the “fight first and then supplement” policy and the gradual elimination of the policy of political seedling collection in 2025, veterinary biological products will usher in market-oriented development; 2) Veterinary chemical drugs: since July 2020, the feed has been completely “banned”, the demand for therapeutic veterinary chemical drugs has ushered in rapid growth, and the development opportunities of new veterinary drugs are considerable; The new version of GMP standard was released on April 21, 2020 and will be implemented from June 1, 2020. As of May 31, 2022, the new standard has not been reached, the backward industry production capacity has not been eliminated, the industry access threshold has been raised, and the competition pattern is expected to be optimized rapidly. 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 suggested 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 importance of food security continues to increase, and attention is paid to the long-term layout opportunities of seed industry. The issue of Document No. 1 in 2022 and the government work report of the two sessions on March 5 once again emphasize the theme of food security and seed industry revitalization, and seed industry security is the basis of food security. In recent years, the industry has actively guided the continuous introduction of policies to encourage R & D innovation and standardized development of the industry: the action plan for the revitalization of seed industry 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, and the commercialization can be expected; The revision of the seed law was completed in 2021 and officially implemented on March 1, 2022. The threshold of corn and other varieties approval standards was raised, and the trend of industrial intellectual property protection and leading concentration is expected to appear. We are optimistic about the industry leaders with variety advantages and R & D advantages. We suggest to pay attention to: Shandong Denghai Seeds Co.Ltd(002041) , Winall Hi-Tech Seed Co.Ltd(300087) , 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.
