I. Market Review
The performance of agricultural index is obviously better than that of big cities, and the increase of fishery and aquaculture is leading. 1. Last week, the Shenwan agricultural index rose 1.56%. Over the same period, the Shanghai Composite Index fell 1.65% and the Shenzhen Component Index fell 3.45%. The performance of the agricultural sector was significantly better than that of the big market. 2. Half of the eight sub sectors rose, of which fishery and aquaculture rose by 4.82% and 3.93%, ranking the top two. 3. The top 10 gainers are concentrated in the fishery and aquaculture sector, and the top 10 losers are concentrated in the seed industry sector. The top three stocks were Fujian Aonong Biological Technology Group Incorporation Limited(603363) , Oriental Ocean and Zhanjiang Guolian Aquatic Products Co.Ltd(300094) .
II. Investment suggestions
It is likely that the pig price will be further adjusted in H1 in 2022. We expect that the capacity deconvolution will speed up at that time, and the pig industry is expected to usher in a new round of cycle reversal in the third quarter. Therefore, we are optimistic about the medium and long-term investment opportunities in the breeding industry and seed industry, and focus on recommending high-quality industry leaders with safe valuation.
1. Seed industry: Recently, favorable policies have been intensively released, focusing on the recommendation of high-quality seed industry leaders. The seed industry has recently ushered in the intensive release of a series of favorable policies. Following the arrival of the new seed law and the Central Document No. 1, the industry policy of promoting the commercialization of genetically modified staple foods will soon come down soon. According to the calculation of relevant policies, we expect that genetically modified corn and soybean seed products may be mass produced and listed in 2023. Accordingly, the seed industry will enter a new period of rapid growth at that time. Head enterprises have first mover advantages in transgenic technology R & D and product layout, and their market share may be more concentrated to head enterprises in the future. We maintain the positive rating of the seed industry, especially the investment opportunities of the high boom corn seed industry. In terms of individual stocks, focus on Shandong Denghai Seeds Co.Ltd(002041) with excellent variety combination and continuous growth, as well as Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Beijing Dabeinong Technology Group Co.Ltd(002385) with leading advantages in transgenic R & D and variety layout, and pay attention to Winall Hi-Tech Seed Co.Ltd(300087) .
2. Breeding industry chain: 1) pig breeding: adjust pig prices or speed up production capacity, and pay attention to cost leading enterprises with reasonable valuation. After the recent stabilization of pig prices, there was a significant correction. According to statistics, as of the end of last weekend (January 7), the average price of pigs in Jiangxi Province was 15.65 yuan / kg, down 5.6% week on week. On the supply side, judging from the changes in the stock of fertile sows in the early stage, it is expected that the number of prenatal pigs will keep increasing month on month in April 22. On the demand side, the peak period of bacon production ends, the peak season of family and catering consumption will end after the Spring Festival, and the consumption power will weaken. The supply and demand pattern is becoming loose. We expect that it is more likely to continue to adjust the pig price based on the current price after the festival. Official data show that at the end of November, the number of fertile sows in China was 42.96 million, down 1.2% month on month, 4.8% higher than the normal number. According to official data, although the speed of capacity removal in the industry has slowed down due to the rebound of pig prices recently, the trend of capacity removal is still continuing. It is expected that after the double festival, with the readjustment of pig prices, the pace of capacity removal will be accelerated. We believe that with the deepening of the industry's capacity deregulation in the first half of the year, the pig industry is expected to usher in a new round of cycle reversal in the second half of the year. In terms of valuation, at present, the market value of most pig enterprises is the same as the historical average, and the valuation is not expensive. Therefore, we continue to maintain the optimistic rating of the sector. Individual stocks mainly recommend Muyuan Foods Co.Ltd(002714) with leading cost, as well as Wens Foodstuff Group Co.Ltd(300498) and Tecon Biology Co.Ltd(002100) with obvious improvement in production indicators. 2) Dynamic insurance: on the eve of the new cycle, the prosperity of pig vaccine was under short-term pressure, but the static PE was at the bottom of history, the safety margin of valuation was high, and the optimistic rating was maintained. Individual stocks mainly recommend Wuhan Keqian Biology Co.Ltd(688526) with reasonable valuation and significant growth.
III. industry data
Pigs: in the first week, the average ex factory price of pigs in Jiangxi Province was 15.65 yuan / kg, down 0.93 yuan / kg from last week; The average loss of self breeding heads in the main pig producing areas in China was 115.46 yuan. By the end of November 2021, the number of fertile sows in China was 42.96 million, a year-on-year increase of 4.7%;
Broilers: in the first week, the average price of chicken seedlings in Yantai, Shandong Province was 1.2 yuan / feather, down 0.2 yuan / feather from last week; The average price of white feather meat and wool chicken in front of the shed was 3.96 yuan / kg, down 0.01 yuan / kg from last week; In the first week, the single feather loss in broiler breeding was 0.22 yuan; Feed: according to the statistics of Boya Hexun, in the first week, the average price of broiler feed was 3.8 yuan / kg, unchanged on a weekly basis; The price of fattening pig feed was 3.62 yuan / kg, unchanged from last week;
Aquatic products: in the first week, the sea cucumber in Shandong Weihai bulk wholesale market was 200 yuan / kg, unchanged on a weekly basis; The price of scallops was 12 yuan / kg, unchanged on a week-on-week basis; Shrimp price was 360 yuan / kg, unchanged on a week-on-week basis; The price of abalone was 110 yuan / kg, unchanged from last week;
Sugar, cotton, corn, soybean meal, wheat and rice: in the first week, the spot price of Nanning white sugar was 5667 yuan / ton, up 2 yuan / ton from last week; In the first week, the price of 328 grade cotton in China was 22278 yuan / ton, up 255 yuan / ton from last week; The average purchase price of corn in China was 2628 yuan / ton, down 1 yuan / ton from last week; The average spot price of soybean meal in China was 3618 yuan / ton, up 30 yuan / ton from last week; The average spot price of wheat in China was 2847 yuan / ton, down 1 yuan / ton from last week; The average price of Japonica Rice in China was 2720 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 were less than expected
