Recently, due to geopolitical tension, A-Shares are also in the stage of shock and bottom grinding. The agricultural sector once rose against the market and became the focus of market attention. The performance of planting industry, pig breeding and forestry is strong. However, there have been significant adjustments in the near future.
Is there an opportunity for the large agricultural sector? What areas are worth layout in the future? How should the fund participate? The reporter of China fund daily interviewed eight investment researchers:
Fuguo fund agricultural ETF fund manager Zhang Shengxian,
harvest agricultural industry stock fund manager Wu Yue,
Boshi quality life mixed fund manager Yao Shuang,
Cheng Zhou, manager of Cathay Pacific agricultural fund,
Qianhai open source fund manager Liu Hong,
Nord fund manager Xie Yi,
YONGYING fund strategy analyst Dai Qing,
Hui'an fund agricultural industry researcher Ren Wangyu,
These people believe that the new upward cycle of the agricultural sector is gradually beginning in the doubts of the market. At the same time, the current valuation is at a historical low, and they are more optimistic about the seed industry and breeding sector. Investors need to be carefully screened to participate through the fund. It is best to pay attention to the risk of large fluctuations in the agricultural sector through the fixed investment layout.
multiple factors triggered the recent adjustment of biochemical sector
China Fund News: the agricultural sector, which has been performing well, has made a significant adjustment in the past two days. What do you think is the reason
Zhang Shengxian: recently, affected by factors such as the decline of economic growth expectation caused by the spread of the epidemic, the continuous warming of the expectation of interest rate increase by the Federal Reserve and the depreciation of the RMB, the market risk appetite fell rapidly, and the sectors with strong early performance fell significantly. Since mid March, the agricultural sector has rebounded significantly, with higher excess returns than most sectors in the market. With the phased increase of market risk, some funds have taken profits, resulting in a significant adjustment in the sector.
Wu Yue: this year may be very different from previous years. Since the beginning of the year, it can be seen that basically 90% of the tracks, including those of military industry, new energy and semiconductor core, have seen a very obvious decline, which deduces the state of a little bear market.
There are probably several factors in this regard. First, China's macro economy has entered a new round of downward cycle since the second half of last year, and the first half of this year is a state of great macro pressure; Second, this round of epidemic has caused the proliferation of global liquidity and the supply of many resource goods has not been released, superimposing the rise of global inflation caused by the war between Russia and Ukraine; Third, this year may be a year with great external uncertainty. It may not be a very good year for the whole A-share or Hong Kong stock assets.
However, at present, the market is only released at a certain time point after the accumulation of multi-dimensional event factors. This is a centralized decline caused by pulse events, not a trend decline. It does not mean the end of the slow bull in the past three to five years in China. In the medium and long term, the upward trend of the whole equity assets and the whole capital market will continue.
Dai Qing: some time ago, agriculture has two segments with good performance, namely planting and pig breeding, which have been significantly adjusted in the near future.
In terms of planting sector, since February 2022, the conflict between Russia and Ukraine has led to a further rise in global food prices. The covid-19 epidemic in Northeast China has had a certain impact on spring farming, making the thematic opportunities of planting sector concerned by investors. With the conflict between Russia and Ukraine gradually entering the easing period, and the epidemic situation in Northeast China is slowing down, spring farming is basically safe under the attention of the government and the guarantee of agricultural materials, the rising momentum of grain prices is slowing down, and the planting sector has been adjusted.
In terms of the breeding sector, the main logic is that after the continuous deregulation of production capacity, the pig cycle may reverse this year. As the deregulation of production capacity requires the pig price to continue at a low level, and there has been an abnormal slight rise in pig price recently, the market is worried that the deregulation of production capacity may slow down, or the reversal of pig cycle may be delayed. At the same time, pig breeding companies have accumulated a large increase in the early stage, and the emotional level is relatively fragile, so the market is more sensitive to negative emotions.
Yao Shuang: agricultural sector has achieved significant excess returns since this year, which has been adjusted continuously in the past two days. This is related to the overall weakness of the market and some funds choose to cash in profits; In addition, some small and medium-sized agricultural concept stocks that lack long-term fundamental support pulled up rapidly in the early stage and began a sharp correction in the past two days, which also affected the sentiment of the sector.
Cheng Zhou: on the one hand, affected by the overall sentiment of the market, under the background of pressure on economic growth expectations, the market is worried about the pressure of potential capital outflow, and the overall downturn of the market affects the adjustment of the sector. On the other hand, due to the short-term rise of pig prices, the industry is worried about the pace of capacity deregulation and has made a correction.
Xie Yi: we think there may be many reasons. The first is the industry's own cycle and rhythm. For the pig raising sector with large weight in the agriculture, forestry, animal husbandry and fishery sector, the cycle is still in the downward stage. With the disclosure of the annual report and the first quarterly report, a considerable number of enterprises are still in the situation of downward profits or even losses. In the early stage, the market can expect that the bottom of the pig cycle around the spring festival may still be too optimistic, so there are some adjustments. Secondly, due to the continuous situation in Russia and Ukraine, international food prices may fluctuate continuously. Ukraine itself is a large agricultural exporter, and a considerable proportion of the feed upstream of the breeding industry comes from Ukraine. The fluctuation of feed price will also lead to the fluctuation of breeding profit. Superimposed on the stock level, agriculture belongs to a highly cyclical industry, which will fluctuate greatly under the fluctuation of the market.
Liu Hong: agriculture sector performed well overall this year, with huge excess returns. The essential reason is that there have been great changes in the fundamentals of the industry, the production capacity of pig breeding industry has been significantly reduced, and the probability of pig prices entering the upward trend is high. There has been a significant adjustment in the past two days. The reason for the adjustment belongs to the problem of transaction structure. It is greatly affected by the market, and the companies that increased too much in the early stage have decreased greatly, Companies with smaller gains have smaller declines, but the fundamentals have not changed.
Ren Wangyu: recently, the price of live pigs has risen rapidly, and the market began to worry about the slowdown of industrial production capacity, resulting in the prolongation of the bottom grinding time of the pig cycle, which is the main reason for the short-term adjustment of the breeding sector. The fundamentals and valuation of the animal protection and other sectors are highly related to the breeding sector, and there are also major adjustments; Secondly, in this year's stock capital market, some funds of the sector that has accumulated absolute income have cashed in the income, which also led to the adjustment of the sector.
agricultural sector upward cycle or curtain up
China Fund News reporter: at present, under the background of continuous international geopolitical conflicts and rising inflation, how do you view the investment value of the large agricultural sector, and how much is the long-term, medium-term and short-term investment value
Zhang Shengxian: in the short term, under the geopolitical conflict, Ukraine and Russia, as major exporters of Shenzhen Agricultural Products Group Co.Ltd(000061) and chemical fertilizer, the export and sowing of relevant crops have been affected. At the same time, countries with high dependence on grain import have accelerated grain hoarding, resulting in high grain prices.
In addition, the drought in South America and other places has intensified this year, which has also affected the world food supply. Due to rising inflation expectations and rising costs, farmers may be reluctant to sell in the future, and supply will be further tight. From the perspective of the whole year, world food prices are expected to continue to rise.
Part of China's grain depends on imports, and the rise in world grain prices will be transmitted to China. In addition, China's pig stock is high and the demand is strong. China's grain prices will also remain high, driving the high boom of the planting industry chain, and the relevant targets are expected to benefit.
In the medium term, under the general tone of ensuring food security, the commercialization of genetically modified seeds has begun. It is expected that the genetically modified policy will continue to be liberalized in the next year, and genetically modified related companies may usher in layout opportunities.
In the long run, China is a large country with a large population and agriculture, but the agricultural industry is large but not strong. Some grain categories are excessively dependent on imports, and there is a large growth space for seed industry related R & D. At present, ensuring food security has become a national strategy, and the realization of food security is not achieved overnight, but a relatively long-term process. Relevant support policies will continue to be promoted, and the agricultural sector is worthy of long-term layout.
Wu Yue: the new upward cycle of the agricultural sector is gradually beginning amid the doubts of the market.
From the perspective of the seed industry sector, the revision of the seed law was passed at the end of 2021. The revision of the seed law has expanded the protection scope and protection links of new plant variety rights, established a substantive derivative variety system, strengthened the punishment for infringement, and is conducive to strengthening the intellectual property protection of China's seed industry and further optimizing the competitive order of industry development.
However, the greater opportunity is still the commercialization and liberalization of GM. 2022 will be the turning point year for GM from policy hype to medium and long-term growth, including variety approval, seed production, sales, performance cashing, etc.
From the perspective of the breeding industry, in the first half of the year, the price of pigs will probably decline, and the production capacity will be reduced again. The pig cycle will only be late but will not disappear. Therefore, we are optimistic about the allocation opportunities of the pig breeding sector in 2022.
Overall, the agricultural sector is measured according to the historical profit center. At present, the valuation is at a historical low. This year, the seed industry and breeding sector are important years from the expected to the real inflection point. At present, the proportion of institutional allocation is still low, and there are still expected to be excess returns in the future. Whether from the medium-term or two or three-year perspective, it has reached a period worthy of attention and even began to increase the layout of the golden window.
We are still full of confidence in the long-term investment in agriculture. After the Russian Ukrainian war, the world has been unable to return to the past, international geopolitical tension may become the norm, trust between countries will be reduced, energy self-sufficiency and food security will become more important, and the price center of bulk commodities will be higher than ever before. High oil prices have led to the use of some grain for alternative energy. As important grain producing and exporting countries in the world, Ukraine and Russia's grain production or trade, including the export of chemical fertilizer, have been greatly affected by the war. The demand for food and geopolitical conflicts have also increased the demand for food stocks in various countries. It is estimated that food prices will remain high for a considerable period of time in the future, even if some small countries have food crises. This will also push Shenzhen Agricultural Products Group Co.Ltd(000061) into the stage of inflation as a whole.
The people regard food as their priority and food as their foundation. For China, the key is to stabilize and increase grain production, which should not be taken lightly at any time. Against the background of rising global grain prices and declining grain stocks, China's fundamental way to solve the problem is to ensure farmers' grain planting income and promote scientific and technological progress in the seed industry. Therefore, for the direction of biological breeding and transgenic technology, China's leading leading enterprises will usher in a breakthrough development opportunity and rapid development period in the future, which is one of our promising directions.
Cheng Zhou: in the long run, as a rigid demand industry related to the national economy and the people's livelihood, the market share of China's agricultural market is not high, and comprehensive leading enterprises will appear in the future, which is worthy of attention for a long time.
In the medium term, looking forward to the second quarter, the timely convening of the central financial stability Commission has injected confidence into the market subjects. The "policy bottom" and "market bottom" concerned by the market may have appeared in resonance and synchronization, but it may be difficult for the market to reverse the "V" shape. It is expected that the A-share market is still in a state of consolidation and momentum in the first half of the second quarter. We need to pay more attention to the overweight and effect of China's steady growth policy, the real easing of the situation in Russia and Ukraine, and the gradual recovery of market sentiment and capital inflow, so that the market can start a round of rising market. Based on our judgment that the global Shenzhen Agricultural Products Group Co.Ltd(000061) price is in the rising cycle, the agricultural sector is of investment value, and we are relatively optimistic about the investment opportunities in the production of agricultural materials in the middle and lower reaches and Shenzhen Agricultural Products Group Co.Ltd(000061) processing industry.
Xie Yi: we believe that the large agricultural sector may not have high growth in the long run, or its periodicity is beyond its growth. Therefore, investment opportunities are mostly short-term rather than long-term. Or it is a stock level, not an industry level. In the short and medium term, the current geopolitical conflict is one of the important reasons for the increased volatility of the agricultural sector, and inflation is the result of rising food prices. Therefore, the core is to see when the geographical conflict can end, and then the price of sector commodities will tend to normalize again. Of course, this will take some time, but in the long run, the process of normalization is inevitable.
Liu Hong: in the long run, the agricultural industry is valued by the state and belongs to the basic people's livelihood industry. It is the content mentioned in previous No. 1 documents. Superimposed on the relatively backward level of China's agricultural production and low concentration, there is still much room for development in the future. In the medium term, the cycle reversal of livestock and poultry breeding industry has strong certainty, and the opportunity is worthy of attention. In the short term, the overall sector is greatly affected by the market sentiment, and there is some uncertainty.
Ren Wangyu: against the background of global inflation, food security has risen to a new level. The large agricultural sector mainly focuses on more technological innovation in the medium and long term to support the opportunities for industrial transformation and upgrading. For example, the introduction of genetically modified seeds and new animal vaccines is expected to accelerate the technological progress of corresponding sectors and create incremental value for the industrial chain. In the short term, the production capacity of pig breeding may still be in the de industrialization stage, and the logic of relevant sections of the breeding chain has not been falsified yet. Therefore, it may still have high allocation value in the short and medium term.
Dai Qing: in the long run, agriculture, as the primary industry, has a broad potential market space. At the same time, agricultural modernization is a relatively determined direction, and there is room for improvement in all links of the agricultural industrial chain. On the one hand, agricultural modernization will improve the overall competitiveness of the agricultural industrial chain and conform to the macro policy of food security. Among them, high-quality companies also have more growth opportunities.
In the medium term, the aquaculture industry shows the trend of large-scale and intensive management. There are a large number of retail investors in China's aquaculture industry, and the market share of listed aquaculture companies is still low. It is a clear opportunity for breeding listed companies to improve their share through efficiency and cost advantages. In the planting industry chain, it is relatively optimistic about the seed production industry. On the one hand, under the background that all industries in China pay more attention to scientific and technological investment, the scientific and technological attributes of the seed production industry are also expected to be enhanced. On the other hand, as the "chip" of the planting industry chain, the seed production industry has high strategic importance, and the upgrading of the seed production industry is also one of the leading directions of the current agricultural policy.
In the short term, pay more attention to the impact of geographical events and the performance of this round of pig cycle. The geopolitical events in Russia and Ukraine raised the expectation of rising global grain prices. As a terminal sales item of the planting industry chain, Shenzhen Agricultural Products Group Co.Ltd(000061) as a result, the price rise will improve the overall operating performance of the planting industry chain. As for breeding stocks, although the share price has accumulated a certain increase, it is still in a relatively early position at the cycle level due to the current low pig price, poor profitability and tight corporate cash flow. After the cycle reversal, the earnings and performance of breeding stocks are expected to improve, and the market sentiment may improve.
optimistic about the opportunity brought by the reversal of pig price
China Fund News reporter: there have been some signs of recovery in the pig market recently. How will the new round of "pig cycle" be interpreted? What do you think of the investment opportunities in aquaculture
Zhang Shengxian: the recent recovery of the pig market is mainly due to the severe situation of the recent epidemic. Under the condition of road control, the transportation of pigs is difficult and the supply is forced to decrease. At the same time, the rise of transportation costs is also partly passed on to the downstream. In addition, as the pig grain ratio continues to be in the warning range of excessive decline, the recent increase in collection and storage has partially boosted the market.
From the interpretation of the new round of "pig cycle", the number of fertile sows has turned negative month on month since July 2021. At present, it has been continuously reduced for 9 months, and the number of fertile sows has been reduced by 3.79 million, with a cumulative decrease of 8.30%. Affected by the rising food prices and feed costs, the losses of breeding enterprises were further widened in March, and the number of fertile sows decreased by 1.44 percentage points month on month compared with February. Subsequently, with the continuous high food prices, the production capacity of fertile sows is expected to continue to be reduced.
According to historical experience, the number of fertile sows determines the slaughter volume of pigs after 10-11 months. According to the change of the number of fertile sows in this round, it is expected that the slaughter volume of pigs will fall significantly in the third and fourth quarters, and the price will usher in an inflection point. From the current time node, the average market value of some high-quality pig breeding stocks is still at a historically low level, which is still a good configuration window.
Wu Yue: considering that agriculture is an offensive direction and benefits from inflation, especially from the so-called reversal of pig prices and the reversal of global Shenzhen Agricultural Products Group Co.Ltd(000061) and behind the agricultural cycle is breeding and planting. We are very clear and sure about the reversal opportunity of pig breeding this year. This comes from a very typical cycle framework, And the current higher feed costs and breeding costs may accelerate China's production capacity clearing and accelerate the reversal of the pig cycle.
Therefore, we judge that from the second half of today, the overall pig price will have an upward inflection point, and there is no doubt that breeding stocks will be a very huge cyclical investment opportunity throughout the whole year and even the first half of next year.
Yao Shuang: in addition, after a deep correction over the past year, pig prices have also shown signs of bottoming out and rebounding recently. Does the new pig cycle start? To judge the pig cycle, the core still needs to return to the basic supply and demand analysis.
According to the statistics of the Ministry of agriculture, the production capacity data of pigs corresponding to the stock of fertile sows has decreased for nine consecutive months. It can be said that the pig cycle has a great probability and will enter a new cycle of recovery after hitting the bottom in the second half of the year.
However, after experiencing African swine fever, China's pig industry also has some new features in its production capacity, pattern and breeding mode. This round of rising cycle may be different from the previous rounds of V-shaped reversal, which will show new features such as longer cycle and repeated shocks in the middle. Specific analysis needs to be made according to the subsequent de production rhythm. As the agricultural core industry with an output value of trillion, pig breeding has emerged a number of head enterprises with complete system, advanced technology and superior model in recent years. Its long-term competitive advantage and the profit elasticity brought by the upward pig cycle bring good investment opportunities.
Cheng Zhou: there is a possibility that the pig price will bottom out in the middle of 2022, especially the time point of seasonal demand recovery in September. At present, some pig related stocks have risen in advance, but there should be room for pig prices. We need to find a better point to intervene, and the trend should go up.
It is difficult for the pig price to return to the high price when it was affected by African swine fever, but because the relevant listed companies have financing resources, the listing volume will be higher than that two years ago, so the stock has space, but it needs to find a suitable time point to intervene.
Xie Yi: we think the pig industry is particularly cyclical, especially as the listed companies of various breeding categories competed to expand production in the previous cycle, resulting in intensified competition, which may prolong the downward cycle of this round and increase the losses of relevant enterprises.
We see that some leading enterprises not only have a decline in profits, but also have made large losses. In terms of time, it is expected that in the second half of the year, the industry may gradually enter the bottom, the production capacity will be gradually cleared, and the pork price may stabilize. The next cycle may start until the end of the year or 2023.
Liu Hong: recently, the national pig price has jumped significantly. In addition to some special factors, the peak of industrial capacity supply can be basically determined. However, due to the large short-term supply, it is expected that the pig price will still grind to the bottom, resulting in the continuous clearing of capacity. It is expected that the pig price will rise significantly in the second half of the year, and the sector is still very worthy of investment at this stage.
Ren Wangyu: the factors affecting the excessive rise of pig prices in the short term are relatively diverse. At present, it can not be confirmed that it is the actual change of supply and demand pattern. Among them, for example, the higher prices of slaughterhouses, the increased marginal supply and hoarding of epidemic materials, and the pressure of farms are all good for the short-term prices. However, the supply of commercial pigs in the industry is still relatively abundant, and the short-term rise of pig prices is difficult to continue.
From the perspective of cycle deduction, September and October last year were two months when the number of sows that can be bred in the industry declined significantly. Corresponding to July and August this year, the number of commercial pigs will be significantly reduced, which will also be good for pig prices. At the same time, considering the arrival of the peak consumption season in September, the marginal improvement of pig prices in the third quarter is a high probability event, and the possibility of turning upward in the industry in the third quarter cannot be ruled out.
Dai Qing: from the investment framework of pig breeding stocks, it can be basically divided into three stages:
Before the reversal of pig prices, corporate profits were depressed, cash flow was tight, and capital expenditure was relatively limited. However, during this period, the production capacity of the industry began to show signs of clearing, and the expectation of pig price reversal in the future was gradually strengthened. The core catalyst at this stage is the production capacity. The downward production capacity will strengthen the expectation of reversal and promote the rise of stock price. At the same time, because the market has differences on the reversal time, and the consideration provided by this difference is undervalued. At present, we are at this stage.
After the reversal of pig prices, corporate profits improved and production capacity began to be gradually repaired. At the same time, the pig price starts to reverse from a lower position, and it is difficult for investors to form a consistent expectation of the pig price in the short term. In this case, the pig price will take over the production capacity and become the core catalyst in the second stage. The market performance is that the pig price rises and the share price rises. From the perspective of historical cycle, the increase in the second stage is considerable, which is an important range for investment in pig breeding stocks. In this stage, the valuation will gradually return to the central level and migrate to the high point.
After the pig price peaked and fell, although the corporate profits were released significantly, the upward drive at the cycle level was significantly weakened, and the investment will pay more attention to whether the enterprise itself has the ability to cross the cycle. Enterprises with lower cost and higher growth rate will have better performance. In this stage, the focus of investment has changed from the reversal of investment cycle to the growth of investment enterprises, but the certainty is also relatively lower than the previous two stages.
optimistic about seed industry and breeding
China Fund News reporter: in the field of large agriculture, which segments or sectors do you prefer? Can you tell me why
Zhang Shengxian: in the field of large agriculture, we are more optimistic about the seed industry in the planting industry chain.
First, the general rise of grain prices has promoted the high prosperity of the planting industry chain. In the past two years, China's pig production capacity has recovered rapidly, the pig stock has reached a high level, and the demand for feed is large, driving the rise of grain prices. The recent geopolitical conflict has further increased food prices, driving the high prosperity of the planting industry chain, increasing farmers' enthusiasm for growing grain, and the prosperity of the seed industry is expected to continue to rise.
Second, in terms of policy, in recent years, food security has been placed at the height of national strategy, which has been mentioned in many important macro policies. With the gradual introduction and improvement of the policies related to the seed industry, the intellectual property protection of the seed industry is also increasing, which is conducive to stimulate the R & D enthusiasm of enterprises. Since 2021, genetically modified related policies have been issued continuously, the commercialization of genetically modified has begun, and the seed industry is expected to usher in capacity expansion.
Wu Yue: in terms of specific segments, my own stage division, the first main line throughout the year is agriculture, the market throughout the year in agriculture is pig breeding, and agricultural reproduction is a very clear main line.
Second, in addition to agriculture, the biggest must choose comes from popular products. We are optimistic about dairy products, meat products, leisure snacks and so on, including some condiment companies. However, we may not be particularly optimistic about the whole condiment industry. The reason is that the overall leader and absolute leader of the condiment industry are now overvalued. For condiment companies with more positions in the past two years, the short-term opportunities may not be particularly large because of the problem of governance structure, but there may be some second-line and third-line condiment companies with small and medium market value, which may be more worthy of your attention.
Ren Wangyu: pig breeding sector: mainly optimistic about the deregulation of industry capacity and the continuous improvement of market share of leading enterprises;
Animal vaccine sector: traditional animal vaccines are undergoing an upgrading period to multi linked and multi valent vaccines and genetic engineering vaccines. The R & D capacity of the industry has been greatly improved, and the market share of high-quality animal protection leaders is expected to be further improved;
Shenzhen Agricultural Products Group Co.Ltd(000061) sector: in the context of rising global food prices, Shenzhen Agricultural Products Group Co.Ltd(000061) sector has strong performance support. Secondly, genetically modified seeds are the biggest focus of the industry, which will also bring earth shaking changes to the planting sector, and the competitiveness of the leading seed industry is expected to be greatly improved.
Yao Shuang: in addition to biological breeding and pig breeding, there are also enterprises with individual technologies and systems far ahead of competitors in feed, animal protection and other fields, but they may be more reflected in individual stock opportunities.
Cheng Zhou: based on the judgment that the global Shenzhen Agricultural Products Group Co.Ltd(000061) price is in the rising cycle, we are relatively optimistic about the investment opportunities in the production of agricultural materials in the middle and lower reaches and Shenzhen Agricultural Products Group Co.Ltd(000061) processing industry.
The price of grain stocks and the price of pigs are the two core factors. Grain prices are bound to rise. In addition to the supply contraction caused by the conflict between Russia and Ukraine, China's flood disaster was also very serious last year, so China's grain output is also declining. The rise in grain prices is certain. We are optimistic about relevant agricultural materials, including chemical fertilizers and pesticides. Although the pig price is difficult to really bottom up because the stock volume is at the historical average level, and some stocks have a rush to rise in advance, it can also be expected to rebound because they have fallen for nearly a year and a half.
Xie Yi: we don't think it is very easy to grasp the industry with strong periodicity. Taking pig breeding as an example, it may make two years of money and lose two years of money. In this case, we need to grasp the rise and fall rhythm of the industry very well in order to have investment income. This is still very difficult for most investors.
We suggest to look for sub industries with relatively small fluctuations in the upstream and downstream of this sector, such as animal protection, feed, etc. Their profits are relatively related to the stock of breeding, not the sales volume of that year. Although the stock also fluctuates, it is much smaller than the profit fluctuation of breeding itself, so it is relatively less difficult to grasp such an opportunity. However, at present, such opportunities are also decreasing, because some upstream and downstream enterprises also began to participate in breeding during the last round of expansion, so the current profits also show higher volatility than before.
Liu Hong: more optimistic about the livestock and poultry breeding industry chain, the market space is trillion, and the space is large enough. In addition to the traditional periodicity, the industry leading enterprises have a long-term basis for increasing the market share and can produce large market value enterprises.
Dai Qing: can be considered from two aspects, "bigger and stronger" and "update earlier".
From the perspective of "bigger and stronger", agriculture itself is a relatively large market. With the advancement of modernization, there are opportunities to breed a number of companies with large market value and strong barriers. For example, the pig breeding industry mentioned above, although there are already companies with a market value of 100 billion yuan, considering the market scale of trillion yuan in the industry and the current relatively decentralized competition pattern, there are still great development opportunities in the future. Large scale enterprises rely on their own efficiency advantages and scale effect in production, and the driving force of share growth in the future is strong enough.
From the perspective of "updating earlier", we will pay attention to the pet and seed production industry. The pet industry is a relatively new track. The underlying logic lies in the upgrading of consumption, the rise of domestic products and the integration of all links of the industrial chain. China's current pet market is about 200 billion yuan, about 30% of that of the United States. With the continuous maturity of the industry, it is foreseeable that the market scale of China's pet industry will become larger, and the companies among them will have medium and long-term investment opportunities. Seed production industry is a relatively traditional track, but it is of high importance. With the implementation of macro policies such as food security and scientific and technological innovation, the industry has opportunities for improvement in all aspects. At the same time, with the iteration and promotion of biological breeding technology, it will give the industry a stronger scientific and technological attribute. The opportunity of long-term industrial reform is worth looking forward to.
it is advisable to use theme funds to lay out in the form of fixed investment
China Fund News reporter: how do you think investors should be screened if they participate in the investment opportunities of large agriculture through funds? What are the risks
Zhang Shengxian: agriculture sector includes breeding industry chain and planting industry chain. To invest in agriculture related funds, you need to know whether the index tracked by it fully covers the relevant industry chain.
As the pig breeding sector is still in the process of clearing production capacity, there are certain game factors, so it is best to make a bargain hunting layout or invest through fixed investment in the investment process.
Wu Yue: in agricultural investment, we have repeatedly stressed that agricultural assets are different from brand consumer assets. They are characterized by high volatility, high elasticity, cycle driven and weak long-term stability. Therefore, these funds are suitable for professional investors with high risk appetite and medium and short-term withdrawal ability.
In the screening of individual stocks, more optimistic about the long-term, sustained and stable compound returns brought by excellent track, excellent company and excellent business model. Especially covid-19, it is more important to select good companies in these tracks. They will provide some certainty in uncertainty. In each round of industry adjustment, the competitiveness and strength of high-quality enterprises are gradually climbing and improving. We are more willing to select excellent companies from excellent tracks and invest from the perspective of accompanying their growth.
Yao Shuang: for the majority of individual investors, if they want to participate in the investment opportunities of large-scale agriculture, it is recommended to select the active agricultural fund managed by relatively senior fund managers with long performance history, and it is suggested to adopt the method of long-term fixed investment to stabilize the short-term fluctuation of net value and share the medium and long-term benefits brought by industrial upgrading and Shenzhen Agricultural Products Group Co.Ltd(000061) inflation.
Xie Yi: agricultural industry actually has relatively limited targets to choose from. Compared with consumption, manufacturing and other industries, it belongs to a small industry and fluctuates greatly. Therefore, if you want to choose agricultural theme funds, it is important to grasp the time point. Investors may need to pay more attention to industry data and track the changes of industry dynamics. At the same time, they may also need to adjust their positions flexibly and dynamically to deal with the evolution of the cycle, which may obtain benefits. But on the whole, there are still some difficulties.
Liu Hong: at present, there are not many agricultural funds in the market. You can refer to the historical performance of the net value of the fund and the past experience of the fund manager for comprehensive screening. In terms of risk, the overall fluctuation of the sector at this stage is large, and investors are recommended to intervene on bargain hunting.
Dai Qing: agriculture itself is an industry with both short-term logic and long-term logic. I think investment can take into account both aspects. This year is a good window for investing in large agricultural funds. With the help of the reversal expectation of the pig cycle, agricultural stocks are expected to improve in prosperity. In the long run, we can participate in the reform of China's agricultural industry through the fund, and we can look forward to the opportunity of improving quality and efficiency in the medium and long term.
As for how to choose funds for the agriculture, forestry, animal husbandry and fishery industry, I think we should choose varieties that pay attention to the breeding industry chain and planting industry chain on the premise that they are suitable for their own risk tolerance. Because agricultural stocks have certain cyclical characteristics and volatility in stock price performance, they will be more suitable for investors with relatively high risk-taking ability.
Ren Wangyu: large agricultural sector is subject to large cyclical fluctuations, so we need to focus on the fund's position sector. If there are many positions in aquaculture stocks, we need to balance the impact of the cycle, and reduce the position at the high point of the cycle; If the Shenzhen Agricultural Products Group Co.Ltd(000061) sector holds a lot of positions, it can make medium and long-term investment. With the introduction of genetically modified, the logic of Shenzhen Agricultural Products Group Co.Ltd(000061) sector is expected to continue to strengthen. The risk point of the industry mainly lies in the periodic fluctuation and the large interaction between sectors.
