In March, CPI rose year-on-year, while pig prices fell significantly. In March, China's CPI increased by + 1.5% year-on-year, including - 1.5% year-on-year food prices and - 41.4% year-on-year pork in food. The CPI of food items was flat at - 1.2% month on month. During this period, pork prices were in a downward range, affecting CPI pork chain ratio of - 9.3%. In March, China Shenzhen Agricultural Products Group Co.Ltd(000061) imported US $17.421 billion, a year-on-year increase of - 0.97%, exported US $7.625 billion, a year-on-year increase of + 20.36%, and had a trade deficit of US $9.796 billion, a year-on-year increase of - 12.98%.
The pig price may be at the bottom of the circular arc, and the rising speed will affect the capacity removal. At the end of March 22, the number of sows that can be bred was 41.85 million, with a quarter on quarter ratio of - 3.33% and a quarter on quarter ratio of - 3.08%. Compared with the end of 21q2, the removal rate reached 8.3%. From the multiple indicators we tracked, the pig cycle may be in the process of circular bottom trend. The possible double bottom of pig price has appeared on March 25 (the weekly average price is 12.12 yuan / kg). Since then, the pig price has rebounded. Considering the data of depopulation of breeding sows, the overall depopulation probability did not reach the expectation. Therefore, based on the short-term expected changes of the above two core indicators, the trend of pig stocks is differentiated. However, we believe that the long-term logic of the pig cycle remains unchanged, and the profit stage of the pig cycle will eventually come; The logic deduction during the period needs continuous correction after data tracking.
In the face of the current situation of rising pig prices and incomplete elimination of fertile sows, we believe that one situation is that the elimination of fertile sows will continue without a significant increase in pig prices and still below the cost line; The second situation is that the pig price continues to rise sharply beyond the cost line, so the de production capacity may be affected. We need to continuously track, deduce and correct which situation may occur. We believe that in the current arc bottom grinding process, we need to pay more attention to the cash flow status, cost changes and pig slaughter growth of breeding enterprises.
In April, the price of yellow chicken fluctuated downward, and the production capacity needs to be cleared. According to the data of xinmu.com, the average price of Chinese yellow feather chicken in 2022q1 was 7.59 yuan / kg, compared with 7.68 yuan / kg in the same period of 21 years, a year-on-year increase of - 1.17%; The price of 21q4 was + 3.27% (the average price was 7.35 yuan / kg). In April of 22, the price of yellow feather chicken was in a downward process of shock. On April 22, 22, the national average price of yellow chicken was 7.17 yuan / kg, with a month on month ratio of - 6.64% at the end of March. At the level of breeding cost, the prices of raw materials such as corn and soybean meal continued to rise, squeezing the profit space to a certain extent.
Since the beginning of the year, the performance of the sector is stronger than that of Shanghai and Shenzhen 300, and the feed increase is at the forefront. From the beginning of the year to April 22, agriculture - 7.39% and Shanghai and Shenzhen 300-19.1%. Among the sub industries, animal health decreased the most (- 23.24%), followed by forestry and agriculture. The only increase in the sub industry was feed, with a year-on-year increase of + 2.21%.
It is suggested that the pig cycle is still the focus of attention at present. It is suggested to pay attention to a "leading" pig enterprise Muyuan Foods Co.Ltd(002714) , New Hope Liuhe Co.Ltd(000876) , Wens Foodstuff Group Co.Ltd(300498) ; II. "Small and beautiful" pig enterprises Tangrenshen Group Co.Ltd(002567) , Tecon Biology Co.Ltd(002100) . The price of yellow chicken goes up, focusing on the leading Jiangsu Lihua Animal Husbandry Co.Ltd(300761) . The concentration of the feed industry has increased. Leading enterprises have the advantage of supply chain and pay attention to Guangdong Haid Group Co.Limited(002311) .
Risk tips: the risk of pig price falling short of expectations, epidemic risk, raw material price fluctuation risk, etc.
