Breeding sector: 1) pigs: the loss of self breeding and self breeding continues to deepen. Many companies have released the data of 12 menstrual periods, and the scale of the industry has been further improved. Since December 2021, the price of live pigs has continued to decline. On January 6, 2022, the average price of pork in 36 cities across the country was 16.87 yuan /, down 0.8% on a weekly basis and 42.76% on a year-on-year basis,; As of November 2021, the number of fertile sows in China was 42.96 million, down 1.2% month on month. Compared with the normal number of 41 million, there is still some room for decline. It is expected that the production capacity will continue to be de transformed in December. There will be abundant pork supply in the short term, and the pig price is expected to continue to decline. On December 7, 2022, the profit of purchased piglets was 103.06 yuan / head, with a decrease of 38.6% on a weekly basis, and the profit of self breeding was -155.46 yuan / head. The range of loss on a monthly basis expanded, the profit level of purchased piglets tended downward, and the self breeding was in a state of loss for four consecutive weeks. We believe that the industry’s willingness to make up the column is still low. Consumption before the Spring Festival in 2022 does not form a support for pig prices. The downward pressure on pig prices in the off-season after the Spring Festival in 2022 may intensify. Farmers continue to be pessimistic about the market in the first half of 2022. Self breeding has suffered continuous losses and the range has increased, and the deregulation of production capacity may be expected to accelerate. It is suggested to pay attention to the opportunity of cycle reversal, For targets with high flexibility in capacity and cost, it is recommended to pay attention to: Wens Foodstuff Group Co.Ltd(300498) , Tecon Biology Co.Ltd(002100) , Fujian Aonong Biological Technology Group Incorporation Limited(603363) , Muyuan Foods Co.Ltd(002714) . In addition, several companies in the industry released the data of menstrual camp in December. Wen’s + muyuan sold about 53.47 million pigs in the whole year, and the industry concentration may continue to improve in the whole year. 2) Poultry: the capacity removal of yellow feather chicken has been basically completed, and the chicken price is expected to reverse. Lihua and Wen’s broilers will reach a new high in 2021. In terms of yellow feather chicken, the average price of fast big chicken, medium speed chicken, native chicken and black bone chicken was 6.85 yuan / 6.99 yuan / 8.59 yuan / 7.33 yuan / 500g respectively on January 4, 2022, and the weekly ring ratio changed by – 0.6%, – 5.8%, + 1.3% and – 0.1% respectively. The year-on-year changes were – 2.3% / + 0.1% / + 1.8% / – 2.4%, and the short-term price is still dominated by decline. According to the data of poultry branch of China Animal Husbandry Association, at present, the stock of parents\’ generation of yellow feather chicken has basically decreased to the normal level in 2018. In the fourth quarter, retail investors are pessimistic about the industry expectation for the Spring Festival in 2022, and their willingness to invest seedlings is low. The supply may decline rapidly after the Spring Festival. Therefore, there is strong certainty about the contraction trend of commodity generation supply in 2022. In the medium and long term, the chicken price may reverse under the background of capacity deregulation and supply contraction, Industry leaders with high market share and good cost control ability are expected to benefit fully. It is suggested to pay attention to: Jiangsu Lihua Animal Husbandry Co.Ltd(300761) , 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 policy is clear to promote the market-oriented and standardized development of the industry, and the leader of R & D + production + market advantage will benefit. Under the background of the effective promotion of the policy of “fighting first and then supplementing” and the gradual and complete abolition of the policy of political seedling collection in 2025, veterinary biological products usher in the era of market-oriented development; Since July 2020, there has been a comprehensive “Prohibition of resistance” in feed, a “restriction of resistance” and “reduction of resistance” in aquaculture, and the demand for high-end therapeutic veterinary chemicals has ushered in rapid growth; The new GMP standard will be implemented in June 2022, the industry access threshold will be raised, the backward production capacity will be cleared away, and the competition pattern is expected to be quickly optimized. 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 recommended 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 era of transgenic commercialization may accelerate, and pay attention to the long-term layout opportunities of seed industry. The emphasis on food security continued to rise, and the seed industry revitalization action plan 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; On December 26, China’s rural work conference once again proposed “vigorously promoting seed sources and other key agricultural core technologies”. As an important prerequisite for food security, seed industry security has clear industrial policy direction, the expansion space of transgenic breeding can be expected, and the leader of breeding technology is expected to benefit. It is suggested to pay attention to: Winall Hi-Tech Seed Co.Ltd(300087) , Shandong Denghai Seeds Co.Ltd(002041) , 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.
