I. core view
Rating and Strategy: at present, we believe that the financial pressure of the industry is huge and difficult to alleviate in the short term, so the logic of capacity removal is solid, and the new cycle in the future is highly expected. We maintain the "optimistic" rating and focus on recommending the four golden pigs that are obviously underestimated. The correction of high grain prices has a high probability of continuing to fluctuate at a high level under the background of low inventory and high demand. The continuous international geographical conflicts and the rising status of China's planting industry are conducive to raising the valuation and maintaining the "optimistic" rating of the industry.
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 12.43 yuan / kg, up 0.2 yuan per week; Piglets were 24.25 yuan / kg, down 0.48 yuan per week; Binary sows were 32.68 yuan / kg, up 0.03 yuan per week. The average head loss of the self breeding and autotrophic model is estimated to be 511 yuan, 20 yuan less than that of last week. The industry's losses narrowed slightly, mainly due to the stop of falling pig prices and the correction of high grain prices. At present, at the bottom of this round of pig cycle, the loss range and duration of pig industry are higher than any previous round of cycle. We believe that the financial pressure faced by the industry is huge and difficult to alleviate in the short term, so the logic of capacity removal is firm, and the new cycle in the future is highly worth looking forward to. Maintain the judgment on the recent acceleration of capacity removal and the bottom reversal of pig price in the third quarter. In terms of valuation, the market value of most individual stocks is below a reasonable level, and the investment has 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 March, the price of Lihua yellow chicken was 12.81 yuan / kg, down 1.35 yuan / kg per month; Wen's yellow chicken costs 13.44 yuan / kg, down 1.19 yuan / kg per month. At the end of February, the number of in production / reserve stocks of parental breeding chickens in China was 40.47 million / 266711 million, a year-on-year decrease of 3.59% / 5.19%, all lower than the average level in recent three years. Since Q4 of the 21st year, the chicken price has always been operating above the cost line. The recent slight correction is mainly affected by the off-season demand from March to April. It is expected to enter the middle and later stage of Q2, and the chicken price will rise after the off-season. 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) . Under the background of continuous international geopolitical conflicts, the status of China's planting industry has risen, and its future development may be further protected by policies. The recent correction of high grain prices outside China, but the fundamentals of low inventory and high demand are still conducive to the operation of high grain prices. 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 commercialization of genetically modified products of staple grain seeds is accelerated. The commercialization of genetically modified seeds of corn and soybean 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 gain more market share by virtue of their first mover advantage. 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 performance lags behind the market, which is mainly affected by the correction of breeding sector. 1. Last week, the Shenwan agricultural index fell 4.72%. Over the same period, the Shanghai Composite Index fell by 0.94%, the Shenzhen composite index fell by 2.19%, and the performance of the agricultural sector lagged behind the market; 2. Specific to the secondary sub industries, all 8 were callback, of which forestry, comprehensive agriculture, animal health care and planting industry had a small callback range, and aquaculture had a large adjustment range; 3. The top 10 gainers are mainly concentrated in the planting sector, and the top 10 losers are concentrated in the breeding sector. The top three stocks in terms of growth were Shenzhen Cereals Holdings Co.Ltd(000019) , Ningxia Xiaoming Agriculture & Animal Husbandry Co.Ltd(300967) and Shandong Minhe Animal Husbandry Co.Ltd(002234) .
III. industry data
Pigs: in the 14th week, the average ex factory price of pigs in 22 provinces and cities across the country was 12.43 yuan / kg, with a weekly increase of 0.2 yuan / kg; The average loss of self breeding heads in the main pig producing areas in China was 511 yuan, a decrease of 20 yuan compared with last week. By the end of February 2022, the number of fertile sows in China was 42.68 million, a month on month decrease of 0.5%; Broiler: in the 14th week, the average price of chicken seedlings in Yantai, Shandong Province was 1.9 yuan / feather, with a weekly increase of 0.32 yuan / feather; The average price of white feather chicken in front of the shed was 4.27 yuan / kg, with a weekly increase of 0.02 yuan / kg; In the 14th week, the single feather profit of broiler breeding was 1.29 yuan;
Feed: according to the statistics of Boya Hexun, in the 14th week, the average price of broiler feed was 4.02 yuan / kg, unchanged on a weekly basis; The price of fattening pig feed was 3.82 yuan / kg, with a weekly increase of 0.02 yuan / kg; Aquatic products: in the 14th week, the sea cucumber in Shandong Weihai bulk wholesale market was 180 yuan / kg, unchanged on a weekly basis; The price of scallop is 10 yuan / kg, with a weekly increase of 2 yuan / kg; The price of shrimp was 310 yuan / kg, unchanged on a week-on-week basis; The price of abalone was 100 yuan / kg, unchanged on a week-on-week basis;
Sugar, cotton, corn, soybean meal, wheat and rice: in the 14th week, the spot price of Nanning white sugar was 5846 yuan / ton, with a weekly increase of 51 yuan / ton; The price of 328 grade cotton in China was 22803 yuan / ton, with a weekly drop of 65 yuan / ton; The average purchase price of corn in China was 2771 yuan / ton, up 3 yuan / ton per week; The average spot price of soybean meal in China was 4481 yuan / ton, with a weekly drop of 260 yuan / ton; In the 14th week, the average spot price of Chinese wheat was 3084 yuan / ton, down 103 yuan / ton; 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
