Core view
Pig prices were flat this week, but industry losses remained high. According to Boya Hexun, the national pig market price this week was 12.40 yuan / kg, unchanged from last week. Since April, the pig price has increased slightly, but due to the high price of raw materials, the degree of loss in the industry is still relatively severe. This week, the total cost of self breeding head of the industry reached 1949 yuan / head, an increase of 0.3% over last week, so that the average loss of head reached 531.7 yuan / head, and the loss range expanded by 20.1 yuan / head. Since March, the average loss of self breeding head has been above 500 yuan / head for six consecutive weeks, and the loss range of the industry is relatively serious.
The price of piglets rebounded and the price of sows was flat. According to Boya Hexun, the price of 15kg piglets this week is 415.5 yuan / head, up 4.2% from last week. The price of piglets has warmed up to a certain extent with the price of pigs; On Tuesday, the price of sows was 32.7 yuan / kg, unchanged from last week. The price of sows operated smoothly, and there was no obvious column filling trend in the industry. The weight performance of the industry was stable. We estimated that the national average post-mortem weight last week was 87.57 kg, a decrease of 0.1% on a weekly basis.
The short-term price fluctuation does not change the trend of capacity removal. Although the prices of short-term pigs and piglets have warmed up to a certain extent, due to the rise in feed prices in this downward cycle, the impact of breeding costs on profitability and profit expectations can not be ignored. The current price fluctuation is far less than that of raw materials, which has limited confidence in the industry. From July 21 to February 22, the cumulative capacity of the industry has decreased by a total of 8.6% month on month. In the state of high loss, the losses of existing farmers are accumulating, the industrial de capacity will change from quantitative to qualitative, and the trend of industrial reversal is irreversible.
Investment proposal and investment object
Capacity removal and pig price reversal are important allocation nodes. Historically, in each round of pig cycle, SW pig breeding has started to rise since before the reversal of pig price. The rise of stock price reflects the expectation of production capacity deregulation formed by industry losses. Therefore, in the current state of sustained high losses in the industry, we still suggest paying attention to the allocation opportunities of pig breeding sector.
Risk tips
Shenzhen Agricultural Products Group Co.Ltd(000061) price fluctuation risk, epidemic risk, policy risk, industry competition and product risk
