Core view:
The average price of pigs in 22 provinces and cities in China on April 8 was 12.43 yuan / kg, up + 1.64% from last week. Since March 25 (12.12 yuan / kg), the pig price has rebounded slightly and rebounded for two consecutive weeks; One of the factors is that there are certain restrictions on logistics, slaughtering and other supply chain links caused by covid-19 epidemic, resulting in a short-term decline at the supply end in some regions. According to the regular price trend in the past 15 years, may August is the month on month upward stage of pig price, which means the arrival of seasonal consumption market. However, considering that the supply side is still significantly surplus in the second quarter, the trend of pig price may still be at the bottom. At the current time point, we still maintain the original view on the inflection point, or it may appear from June to July; With the evolution of the market and the trend of the data, we will continue to revise the deduction conclusion. At the profit level, on April 8, the profits of China’s self breeding and outsourcing piglet breeding were -511.57 yuan / head and -282.58 yuan / head respectively, which continued to maintain a deep loss. We expect that this trend will continue, and the loss will lead to greater consumption of cash flow, which will lead to the reduction of production capacity.
From the tracking indicators, the prices of piglets and binary sows on April 8 were 24.25 yuan / kg and 32.68 yuan / kg, with a month on month ratio of – 1.94% and + 0.08%. The average weight of commercial pigs released this week was 116.55kg, a month on month increase of -0.09%. Combined with the pig price, the four are in the process of shock and downward exploration, which is basically in line with our expectations.
From the perspective of investment, before the second bottom, we all think it is a high-quality layout opportunity. Once again, the layout is now. From the perspective of valuation, the current average market value of individual breeding stocks is at a relatively low level in history (excluding other businesses, the average value of the average market value of listed breeding enterprises is about 25008500 yuan / head), and individual stocks are preferred in terms of overall listing flexibility and financial status. Look at the investment of pig breeding sector with periodic thinking and expectation thinking, release risks, expect to be better, and carry out sector layout in the “most dangerous time” in the general sense.
At the beginning of April, the price of yellow chicken showed a volatile trend, and the price of white feather chicken was relatively stable. According to the data of xinmu.com, the prices of fast big chicken and medium speed chicken were 6.35 yuan / kg and 6.84 yuan / kg on April 8, with a month on month ratio of – 3.2% and – 0.29% over the weekend. Since November 21, the price of yellow feather chicken has fluctuated upward, the monthly average price has fluctuated upward, and the overall price is at a high level. In March, the monthly average price of yellow chicken in China was about 7.43 yuan / kg, down from -0.46 yuan / kg in February. From the perspective of upstream capacity, we maintain the viewpoint of 22h2 inflection point. In terms of white feather chickens, on April 8, the prices of white feather broilers and broiler seedlings in the main production areas were 8.54 yuan / kg and 1.9 yuan / feather respectively, with a month on month ratio of – 0.70% and + 5.56% last week. It is suggested to pay long-term attention to the extension of the industry to the C-end and the development potential of the food end.
The agricultural sector underperformed the CSI 300 index by 3.66 PCT, with agriculture this week at – 4.72%, the Shanghai composite index at – 0.94% and the CSI 300-1.06% over the same period. Among the agricultural sub industries, only the comprehensive agriculture maintained positive growth (+ 1.24%), while the other industries fell to varying degrees. The aquaculture industry and fishery decreased significantly, with – 4.77% and – 5.06% respectively.
It is suggested that the pig cycle is a sector market, and pig stocks have a certain room for rise. As for the selection of individual stocks, first, the “small and beautiful” pig enterprises suggest paying attention to Tangrenshen Group Co.Ltd(002567) , Tecon Biology Co.Ltd(002100) , Fujian Aonong Biological Technology Group Incorporation Limited(603363) , etc; Second, the “leading” pig enterprises suggest paying attention to Muyuan Foods Co.Ltd(002714) , Wens Foodstuff Group Co.Ltd(300498) , New Hope Liuhe Co.Ltd(000876) , etc.
The risk indicates the risk of animal epidemic; The risk of pigs not reaching the expected level.
