Summary:
Event: according to the financial channel of China Central Television, the monitoring data of the Ministry of agriculture and rural areas showed that the national pig stock fell by 0.2% year-on-year in April 2022, the first year-on-year decline since June 2020. The number of fertile sows in China decreased by 0.2% month on month, and decreased for 10 consecutive months.
Comments:
Investment suggestion: continue to recommend the aquaculture sector β opportunity. The recommended standard is the following of the following: ‘ Hongda Xingye Co.Ltd(002002) 714 , Tangrenshen Group Co.Ltd(002567) etc.
The downward trend of production capacity has continued for 10 months, and the pig stock has decreased for the first time in this cycle. From the middle of April 2022, the pig price has increased significantly, but it is still lower than the cash cost of the industry.
According to the monitoring of Yongyi consulting, the average breeding cost of the industry in April was 16 yuan / kg, and the cost of large-scale farms was higher, so the cash flow loss of the industry continued. From the perspective of the first decline in pig stock, the reduction of fertile sows in the upstream has been transmitted to the supply side, and the year-on-year and month on month decrease in pig stock is expected to drive the overall price upward.
At present, the inflection point of pig price has appeared, and the subsequent production capacity will enter the sawtooth de industrialization stage. We believe that the two conditions required for the inflection point of pig price have been met: 1) central uplift; 2) High point:
We believe that the market may overestimate overcapacity and underestimate the de urbanization that has occurred. At the same time, considering the subsequent recovery of demand and cost increase, this cycle will still be the highest cycle of pig price except the last one in history. The subsequent production capacity will still enter the zigzag de industrialization. It can be seen that the objective price data shows that the industry is hesitant rather than uniformly optimistic, and the proportion of inefficient breeding subjects is significantly higher than that in the previous cycle, and the pressure of passive clearing still exists.
Risk tips: policy risk, breeding disease risk, natural disaster risk, raw material price fluctuation risk, etc.
