I. core view
Rating and Strategy: Recently, the price of white chicken products continues to rise, and all links of the industrial chain turn losses into profits. It is strongly recommended to pay attention to the configuration opportunities at the bottom of the broiler sector. The pig industry has suffered losses for three consecutive quarters, and the logic of capacity deregulation is firm. There is a high probability that the pig price will turn upward in Q2 / 3. It maintains the “optimistic” rating and firmly recommends the underestimated four golden pigs. High grain prices outside China are conducive to the rise of the profit center of the planting industry and maintain the “optimistic” rating of the industry.
1. Aquaculture industry chain
1) white chicken industry: maintain optimistic rating, and focus on prebiotics and Minhe. Last week, the average price of chicken seedlings in the main production area was 3.38 yuan / feather, up 1.06 yuan per week; The average price of wool chicken was 4.62 yuan / kg, up 0.15 yuan a week. The price of chicken products is above the cost line, and there is still upward momentum in the short term. In terms of production capacity, at the end of March, the inventory of parents’ generation in production decreased by 4.7% and 11.7%, lower than the annual average of 8.8%. The decrease in the stock of parents’ generation in production will lag two months, which is reflected in the release of hairy chickens. It is expected that the supply of broilers will remain tight in May, providing a short-term driving force for price rise. In addition, the recent outbreak of highly pathogenic avian influenza in European and American countries or the suppression of ancestral introduction in China has increased the expectation of supply side contraction and price rise in the medium term of the market. The valuation of relevant stocks is at the bottom of history. It is strongly recommended to pay attention to the bottom allocation opportunities of the broiler sector. Individual stocks focus on Shandong Minhe Animal Husbandry Co.Ltd(002234) , Shandong Yisheng Livestock & Poultry Breeding Co.Ltd(002458) and Fujian Sunner Development Co.Ltd(002299) .
2) pig industry: maintain the “optimistic” rating, and currently focus on recommending four significantly underestimated golden pigs. Last week, the average price of live pigs in Jiangxi Province was 14.58 yuan / kg, up 1.71 yuan a week; Binary sows were 33.04 yuan / kg, up 0.35 yuan per week. The average head loss of the self breeding and autotrophic model is estimated to be 376 yuan, 155 yuan less than that of last week. Pig prices are currently at the bottom of the cycle and there is limited room for decline in the future. At the bottom of this cycle, the range and duration of industry losses exceeded those in the past, maintaining the judgment that Q2 of capacity removal accelerated and Q3 of pig price hit the bottom and reversed. After the stock price correction, the market value of most individual stocks is below a reasonable level, and the investment has a good margin of safety, maintaining the “optimistic” rating of the sector. Firmly recommend four gold pigs that are significantly underestimated, and firmly recommend the four golden pigs that have been strongly underestimated, and firmly recommend the four golden pigs that have been strongly underestimated, such as the Muyuan Foods Co.Ltd(002714) .
2) yellow chicken industry: maintain the “optimistic” rating, with Jiangsu Lihua Animal Husbandry Co.Ltd(300761) . In March, the price of Lihua yellow chicken was 12.81 yuan / kg, down 1.35 yuan / kg per month; Wen’s yellow chicken costs 13.44 yuan / kg, down 1.19 yuan / kg per month. At the end of March, the production and stock of parent breeders in China decreased by 0.8% and 4.7% respectively, 1.1% lower than the annual average level. Since the peak season, the cost of chicken has been mainly affected by the correction of the recent peak season or the heavy season, such as the arrival of the Dragon Boat Festival. In the medium and long term, environmental protection constraints and the transformation of live birds to fresh ice will raise the industry threshold, promote the withdrawal of small and medium-sized production capacity and optimize the competition pattern. Maintain the “optimistic” rating of the industry, mainly recommend Jiangsu Lihua Animal Husbandry Co.Ltd(300761) , and pay attention to Wens Foodstuff Group Co.Ltd(300498) and Hunan Xiangjia Animal Husbandry Company Limited(002982) .
3) dynamic insurance: give a positive rating, with emphasis on Wuhan Keqian Biology Co.Ltd(688526) . On the eve of the reversal of the pig cycle, the vaccine boom was under short-term pressure. In the medium and long term, the improvement of large-scale breeding level, the upgrading of vaccine technology and the listing of new products will drive the expansion of the animal protection market. At the same time, the new GMP certificate certification, feed prohibition and breeding restriction, as well as the improvement of the biological security level of the breeding industry will promote the reform of the animal protection industry and optimize the competition pattern. PE stocks are currently at the bottom of history, with a high margin of investment safety, and are given a good rating. Stocks with reasonable valuation and R & D advantages are recommended Wuhan Keqian Biology Co.Ltd(688526) .
2. Planting industry chain
1) planting: maintain the “optimistic” rating, and highlight Jiangsu Provincial Agricultural Reclamation And Development Co.Ltd(601952) . International geopolitical conflicts affect global food security, and China’s planting industry is of great importance. China’s foreign grain prices have been adjusted at a high level recently and are expected to remain high during the year. Maintain the “optimistic” rating of the industry and recommend Jiangsu Provincial Agricultural Reclamation And Development Co.Ltd(601952) .
2) seed industry: maintain the “optimistic” rating, focusing on Shandong Denghai Seeds Co.Ltd(002041) and Yuan Longping High-Tech Agriculture Co.Ltd(000998) . The commercialization of genetically modified products of staple grain seeds is the general trend. Once officially launched, it will open the space of seed industry and optimize the competition pattern. The leading enterprises that have advanced the research and development of genetically modified seeds are expected to gain more market share by virtue of their first mover advantage. Maintain the long-term “optimistic” rating of the industry, focusing on the investment opportunities of corn seed industry. In terms of individual stocks, focus on Shandong Denghai Seeds Co.Ltd(002041) , Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Beijing Dabeinong Technology Group Co.Ltd(002385) .
II. Market Review
The agricultural index fell, and the decline was significantly narrower than that of the big market. 1. Last week, the Shenwan agricultural index fell 2.85%. Over the same period, the Shanghai Composite Index fell 3.87%, the Shenzhen composite index fell 5.12%, and the decline of the agricultural sector was significantly narrower than that of the big market. 2. All the eight secondary sub industries fell, with a smaller decline in aquaculture and feed; 3. The top 10 gainers are mainly concentrated in the broiler sector, and the top 10 losers are concentrated in the pig breeding sector. The top three stocks that rose were Joyvio Food Co.Ltd(300268) , Shandong Xiantan Co.Ltd(002746) and Hefei Fengle Seed Co.Ltd(000713) .
III. industry data
Pigs: in the 16th week, the average ex factory price of pigs in Jiangxi Province was 14.58 yuan / kg, up 1.71 yuan / kg from last week; The average loss of self breeding heads in the main pig producing areas in China was 376 yuan, 155 yuan less than that of last week. By the end of March 2022, the number of fertile sows in China was 41.85 million, with a monthly decrease of 0.98%; Broiler: in the 16th week, the average price of chicken seedlings in Yantai, Shandong Province was 3.38 yuan / feather, with a weekly increase of 1.06 yuan; The average price of white feather chicken in front of the shed was 4.62 yuan / kg, up 0.15 yuan per week; In the 16th week, the single feather profit of broiler breeding was 2.95 yuan, 0.64 yuan more than that of the previous week;
Feed: in the 16th week, the average price of broiler feed was 3.98 yuan / kg, unchanged on a weekly basis; The price of fattening pig feed was 3.82 yuan / kg, unchanged on a weekly basis;
Aquatic products: in the 16th week, the price of sea cucumber / scallop / prawn / Abalone in Shandong Weihai wholesale market was 180 / 10 / 310 / 100 yuan / kg, unchanged on a weekly basis;
Grain and others: in the 16th week, Nanning white sugar spot was 5896 yuan / ton, down 6 yuan per week; China 328 grade cotton 22581 yuan / ton, down 92 yuan per week; China’s corn purchase was 2767 yuan / ton, up 4 yuan per week; Chinese soybean meal spot 4524 yuan / ton, down 33 yuan a week; In the 16th week, China’s wheat spot was 3305 yuan / ton, up 165 yuan per week; The average price of Japonica Rice in China was 2758 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 are less than expected
