Continued contraction of pig production capacity, continued valuation
Investment suggestions: we reiterate that the current pig sector is still in an important layout window period: 1) the continuous de industrialization of production capacity, which has decreased month on month for eight consecutive months since July last year, the decline of production capacity has maintained high intensity, the direction of de industrialization has maintained high stability, and it is expected to accelerate under multiple factors such as supply and demand and cost; 2) The pig price is in the bottom area, and the downward space is very small, which is in an environment extremely conducive to the deregulation of production capacity; 3) The valuation is still at the bottom. In particular, the head enterprises are at the bottom corresponding to the valuation in 2022, which is sufficiently defensive and brings greater flexibility to the upward period of pig price. Therefore, it’s still at a very good configuration timing point, so it’s still at a very good configuration timing point. Continue to recommend pig sectors, continue to recommend pig sectors, focus on Wens Foodstuff Group Co.Ltd(300498) etc.
Poultry: continue to pay attention to the changes of white chicken industry
Investment suggestion: in terms of white chicken, the price of the industrial chain has continued the trend of differentiation recently. It is obvious that the upstream ancestral market has weakened, and the middle and downstream prices, especially the parent generation and commodity generation, have improved significantly, which is completely opposite to the situation in the industry last year. The ancestral farm has returned to loss after 16 months, but the short-term commodity breeding link has rapidly recovered from loss to substantial profit, while the slaughterhouse is at a significant loss. The extremely asymmetric profit may affect the price of wool chicken in the near future. At the same time, the loss of the parent farm for 27 consecutive weeks has come to an abrupt end, and whether the trend of capacity removal can continue is still unknown. At present, we still hold a cautious view on sector opportunities, but for some companies (such as Fujian Sunner Development Co.Ltd(002299) ), they have long-term investment value.
In terms of yellow chicken, from the perspective of recent prices, it shows obvious regional differentiation. The prices in East China have weakened significantly. The recent epidemic situation in Shanghai continues to be severe. At the same time, it spills into the surrounding Jiangsu and Zhejiang regions, which will have a significant impact on the consumption of yellow chicken. The weak short-term demand has led to the widening of the price difference between East and South China. Relatively speaking, Guangdong, as the main sales area, can still maintain stable prices in the current off-season, which also reflects the actual supply and demand pattern of the industry. Generally speaking, the contraction of the yellow chicken industry in the short term has brought about fundamental improvement. In the long term, the industry structure is more concentrated, and the transformation from live to fresh is a long-term trend. We are optimistic about the sector. We recommend Jiangsu Lihua Animal Husbandry Co.Ltd(300761) , Hunan Xiangjia Animal Husbandry Company Limited(002982) .
Animal protection: the sector is at the bottom of the valuation, focusing on the catalysis of non plague vaccine
Investment suggestion: affected by the loss of downstream breeding, the boom of the animal protection industry has declined, and the performance of some enterprises has declined. Affected by this, the overall valuation of the animal protection sector has fallen to a historical low. In the long run, the downstream large-scale process, the change in the demand for reduced and alternative antibodies, and the research and development of multi linked and multivalent new vaccines are expected to continue to promote the expansion of the animal protection industry. The research and development of non classical swine fever vaccine has made steady progress, and many enterprises have made positive progress. They pay attention to the catalytic effect brought by African classical swine fever vaccine. We mainly recommend Tianjin Ringpu Bio-Technology Co.Ltd(300119) , Wuhan Keqian Biology Co.Ltd(688526) , Pulike Biological Engineering Inc(603566) , Tecon Biology Co.Ltd(002100) , China Animal Husbandry Industry Co.Ltd(600195) , etc.
Planting: the number of imported soybeans decreased by 18.2% year-on-year in March
Investment suggestion: the prices of wheat and corn remain high, and the demand for seeds remains high. In the long run, the revision of the seed law is conducive to the improvement of industry concentration and the market share of leading companies.
The commercialization process of medium and long-term genetically modified seeds will continue to be promoted, which will benefit the seed leader. Recommended Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Shandong Denghai Seeds Co.Ltd(002041) , Jiangsu Provincial Agricultural Reclamation And Development Co.Ltd(601952) , Winall Hi-Tech Seed Co.Ltd(300087) .
Feed: the price of fish meal has increased significantly, and the price of feed raw materials remains high. Investment suggestions: it is expected that the overall production and sales of feed will continue to grow in the first half of 2022, especially aquatic feed and ruminant feed. The price rise of feed raw materials such as corn, soybean meal and fish meal has slightly squeezed the gross profit margin of feed processing, but the leading enterprises have a strong ability to transfer costs to downstream breeding plants, and the market share is expected to increase. It is recommended that Guangdong Haid Group Co.Limited(002311) , and pay attention to Hefeng animal husbandry.
Pet: optimistic about the investment main line of domestic pet substitution
Investment suggestion: we believe that China’s pet industry is still in a rapid development, the fundamentals remain unchanged, the negative impact of the epidemic on the industry is coming to an end, and the industry has regained the development trend of rapid growth; With the declining Engel coefficient of pet consumption and the rising trend of pet consumption upgrading, the proportion of consumption in pet diagnosis and treatment, pet supplies, pet nutrition and health care, pet services and other fields is expected to continue to rise in the future. Compared with other market segments, pet food and pet medical have natural advantages. We mainly recommend Yantai China Pet Foods Co.Ltd(002891) and Petpal Pet Nutrition Technology Co.Ltd(300673) , and Tianjin Ringpu Bio-Technology Co.Ltd(300119) , which are related to pet health care and medical treatment.
Industry rating and investment strategy: in terms of livestock breeding, pig breeding enterprises with strong cost control ability and high growth can better resist risks in the downward period. We believe that the next round of poultry boom cycle may precede pigs, while white feather chicken or yellow feather chicken; In terms of seed industry, high grain prices and the promotion of transgenic commercialization will continue to benefit the prosperity of seed industry; In terms of feed, the recovery of pig production capacity will support feed demand; In terms of dynamic insurance, it is in the period of industry reform. With the improvement of industry concentration, the advantages of leading enterprises will be gradually clear; Be optimistic about the consumption and growth attributes of pet track. Give the industry a rating of “recommended”.
Risk tip: the company’s performance is lower than expected, the risk of sharp fluctuations in the market caused by emergencies, the risk of epidemic diseases in the breeding industry, the risk of policy uncertainty, the risk of price fluctuation, the risk of extreme weather, etc.
