Investment logic: 1) the trend of the animal protection sector usually lags behind the breeding for about 6 months, and is currently in the prime time of the left layout; 2) The breeding cost center has moved down and the profitability has been restored. At present, the pig price is about 14.5 yuan / kg, and the breeding is still in general loss. In the future, the pig price is expected to pick up and the demand for animal protection products will increase; 3) With the smooth implementation of the new version of GMP, the industrial production capacity may be reduced by about 30%, and the concentration will be further improved.
The market of animal protection sector lags behind that of aquaculture for about 6 months. At present, it is on the left and has a high safety margin. It is recommended to layout. According to the analysis of the stock price trend of the historical capital market, the pig breeding sector broke through the platform period around July 2014, and the breeding stocks increased by up to 360% (compared with the beginning of 2014). The animal protection sector showed an upward trend around February 2015; The same situation was also reflected in the 2018 cycle. From December 2018 to April 19, the rising trend of pig breeding related targets was the same, and the animal insurance related targets began to appear in June 19 β。 At present, the pig cycle is still in the de capacity stage. The previous two situations have reference value. From Q4 in 2021, the breeding sector has an upward trend. At present, it is the golden time to layout the animal protection sector in advance.
The profitability of pig breeding enterprises has been gradually restored, the expectation of pig value has warmed up, and the demand for animal protection products has increased. Under the influence of environmental policies and non plague, the concentration of pig breeding has kept rising under the influence of environmental protection policies and non plague, and the concentration of pig breeding has been rising under the influence of environmental protection policies and non plague. Ten listed pig breeding companies ( Hongda Xingye Co.Ltd(002002) 714 \ \, Fujian Aonong Biological Technology Group Incorporation Limited(603363) , Shenzhen Kingsino Technology Co.Ltd(002548) ) a total of 94.28 million were sold in 2021, accounting for about 14% of the 670 million sold in China. Large scale farms are more standardized and pay attention to epidemic prevention, The demand for animal health products increases accordingly. From the analysis of the current time point, we believe that the factors affecting the performance of the animal protection industry have been transformed into the restoration of profitability in the short term due to the impact of African swine fever. With the adjustment of the structure of fertile sows, the proportion of high-quality varieties has increased, the healthy litter rate of pigs has increased, the cost of piglets has been effectively controlled, the complete cost center of the industry has moved down and gradually returned to the level before the non plague. In the third quarter of 21, the industry was in a deep loss state, although it is still in the bottom consolidation stage, However, the value of pigs will increase in the future, and the demand for animal protection products will increase. From the historical cycle analysis, the trend of the animal protection industry may lag behind the breeding enterprises for about half a year. At present, it is on the left. It is suggested to lay out.
The concentration of veterinary medicine industry may be further improved, with rich product matrix and obvious competitive advantage. On June 1, 2020, the new version of GMP was officially implemented, which clearly stipulates that veterinary drug enterprises need to pass the new version of GMP certification before June 1, 2022, so as to improve the entry threshold of veterinary drug industry and eliminate backward production capacity. In order to control risks, enhance traceability at the breeding end or reduce suppliers of animal protection products, so as to further force the improvement of industry concentration. On the other hand, the work of "anti drug prohibition" is progressing steadily. Referring to the experience of EU anti drug prohibition, after the consumption of growth promoting antibiotics is reduced, the demand for therapeutic antibiotics will nearly double, the market may usher in increment, and the growth in the field of chemical drugs will be further enhanced. The development of non plague vaccine continues. If it can be successfully introduced to the market, it will bring increment. The science and technology development center of the Ministry of agriculture and rural areas publicized the research and development related projects of African classical swine fever vaccine as the key special project of the key research and development plan "research and development and application of key technologies for comprehensive prevention and control of animal epidemics". At present, the research and development related to subunit vaccine has a high degree of attention. With the variation of classical swine fever virus, its toxicity gradually weakens and its infectivity increases. The inactivated subunit vaccine is weaker, and the vaccine is less effective, but more safe, Therefore, the promotion possibility is greater. If it is successfully marketized in the future, the attention and growth of the industry will be further improved.
Focus on individual stocks: Based on the above investment logic, the dynamic insurance sector is stronger than the market as a whole, and the dynamic insurance enterprises with high-quality products and rich matrix have competitive advantages. It is recommended that China Animal Husbandry Industry Co.Ltd(600195) ( China Animal Husbandry Industry Co.Ltd(600195) ) is expected to achieve a profit of 730 million yuan in 22 years, give 27 times PE and target market value of 19.7 billion; .
Risk tip: the downstream aquaculture has a sudden epidemic disease, the R & D progress is less than expected, and the product sales are less than expected.
