Under the background that the expectation of pig cycle reversal continues to strengthen, Henan Shuanghui Investment & Development Co.Ltd(000895) (000895) has accelerated the process of locking purchase and sales cooperation at the beginning of 2022. After "hand in hand" Muyuan Foods Co.Ltd(002714) (002714), we reached strategic cooperation with Jiangxi Zhengbang Technology Co.Ltd(002157) (002157).
Muyuan then joined hands with Zhengbang
On January 14 Henan Shuanghui Investment & Development Co.Ltd(000895) announced that the company and Jiangxi Zhengbang Technology Co.Ltd(002157) signed the Shuanghui Zhengbang strategic cooperation framework agreement on January 14, 2022. Based on the principle of complementary advantages and mutual benefit, the two sides give full play to their industrial advantages, adhere to the concept of healthy, safe and green industrial development, rely on the purchase and sale of live pigs, improve the industrial chain, enhance the value chain and open up the supply chain, Further promote the complementary industrial advantages and high-quality development of both sides, so as to provide strong support for the food industry.
that night, Zhengbang also disclosed the above cooperation contents in the same period.
The two sides agreed that in terms of point-to-point direct supply of pigs, Shuanghui will open up a green channel and give priority to the acquisition of Zhengbang direct supply of pigs 24 hours a day. The two sides agreed on the supply, price and transportation mode to realize point-to-point direct supply. Zhengbang shall set the breeding farm matching Shuanghui slaughter as the base, give priority to the supply of Shuanghui, and ensure the quality and quality of the supplied pigs. The weight of pigs is 80-140kg / head, so as to ensure that the quality and safety of pigs meet the requirements of national and industrial standards and Shuanghui procurement standards.
In terms of establishing a supply chain cooperation mechanism, the two sides will give full play to the advantages of Shuanghui pig slaughtering and Zhengbang pig breeding, improve their brand value and market share, and jointly build a first-class industrial chain cooperation model at home and abroad.
In terms of deepening bilateral cooperation, the two sides strengthened cooperation in pig purchase and sales, and strengthened capacity matching and connection. when the pig price is low, Shuanghui can appropriately increase the pig procurement of Zhengbang on the basis of adhering to the market orientation, and is entitled to enjoy all relevant preferential policies for pig sales of Zhengbang. when the market price rises, Zhengbang can moderately increase the supply of pigs to Shuanghui on the basis of market orientation. According to the needs of Shuanghui, Zhengbang provides Shuanghui with relevant information in the process of pig breeding; According to the needs of Zhengbang, Shuanghui timely reported the relevant settlement data of pigs delivered by Zhengbang after slaughter.
The agreement stipulates that the first cooperation period is three years, and the validity period is from January 1, 2022 to December 31, 2024. One month before the expiration of the agreement, both parties shall negotiate the renewal.
This is the second pig breeding industry enterprise announced by Henan Shuanghui Investment & Development Co.Ltd(000895) since 2022.
On January 4, Henan Shuanghui Investment & Development Co.Ltd(000895) announced the signing of Shuanghui muyuan strategic cooperation framework agreement with Muyuan Foods Co.Ltd(002714) . The content of the agreement is similar to this Zhengbang cooperation agreement, and also involves provisions such as "strengthening cooperation in pig purchase and sales" and "realizing point-to-point direct supply".
Lock the purchase and sales cooperation before the pig price goes up
as the largest pig slaughtering and processing enterprise in China and Henan Shuanghui Investment & Development Co.Ltd(000895) as the downstream of the industrial chain, there is undoubtedly a large demand for raw material procurement. In order to extend the industrial chain and resist periodic fluctuations, the company has developed feed industry and breeding industry upstream and packaging industry, commerce and foreign trade downstream with slaughtering and meat processing industry as the core in recent years. However, the current Henan Shuanghui Investment & Development Co.Ltd(000895) own pig breeding capacity is far from meeting the needs of the company.
According to the announcement, prior to the signing of the framework agreement, Jiangxi Zhengbang Technology Co.Ltd(002157) and Henan Shuanghui Investment & Development Co.Ltd(000895) had no direct pig purchase and sales business in the past three years. From January to September in 2019, 2020 and 2021, Muyuan Foods Co.Ltd(002714) directly sold pigs to Henan Shuanghui Investment & Development Co.Ltd(000895) amounted to 21 million yuan, 380 million yuan and 290 million yuan respectively, accounting for 0.11%, 0.69% and 0.54% of the company's total pig sales in the current year / period.
For the upstream and downstream of the industrial chain, strengthening point-to-point direct cooperation can reduce intermediate links and reduce the costs of all parties. When the current pig cycle fluctuates at a low level, Henan Shuanghui Investment & Development Co.Ltd(000895) holds hands with the upstream and also locks in the optimization of supply quality and cost when pig prices are high in the future.
in 2021, the production capacity of pigs will be fully restored, and the decline of pig prices will exceed expectations. The rapid decline of meat prices has promoted the recovery of residents' pork consumption. However, the covid-19 epidemic and flood disasters affect the macro economy. Coupled with the adjustment of diet structure and population structure, the growth of pork consumption is lower than expected, and the main tone of oversupply is basically implemented throughout the year.
After the price recovery in the fourth quarter of 2021, China's pig breeding industry entered a loss again before the Spring Festival, and the market showed a pattern of low peak season. In 2022, the slaughter price of pigs has dropped from 16.45 yuan / kg on January 1 to 14.4 yuan / kg on January 14, a decrease of 15%.
According to the analysis of sozhu.com, the pig price has continued to decline recently, and the average selling price in some regions has fallen below 7 yuan / kg again, which also means that the previous small profit has stopped abruptly, and the pig market has entered a state of loss again. Perhaps people are more pessimistic about the market after the Spring Festival. Farmers and large-scale farms have been on the high side since December 2021, resulting in an excessive supply of pigs in the market, but the actual consumption is extremely limited. The superposition of the recent covid-19 epidemic pressure has affected the relevant terminal catering consumption, so the pig market price is still dominated by weak shocks.
However, Zhuo Chuang believes that 2022 is the key inflection point of the new round of pig cycle, and the trend direction of loose supply and tight supply is relatively clear. Recently, a number of institutions have also released research reports that with the continuous de capacity of the pig breeding industry, the inflection point of the pig cycle is gradually approaching.
Guolian Securities Co.Ltd(601456) according to the latest research report, in the short term, it is expected that the pig production capacity will be accelerated in 2022, and the pig price can be reversed. June 2021 is the high point of breeding sows. According to the estimation of breeding cycle, theoretically, April May 2022 is the lowest point of pig price. Therefore, it is expected that without the interference of animal epidemic, the pig price will still be in the downward channel in the first half of 2022, and the inflection point of pig price is expected to appear from the second quarter to the third quarter of 2022. The rebound range of pig price still needs to be observed after the Spring Festival.
According to the research report, the price inflection point of this round of pig cycle is expected to be from April to June 2022. Under the background of low pig prices in the first quarter, the de capacity of pigs is expected to accelerate. Market expectations for the reversal of the pig cycle strengthened, catalyzing the recent plate performance.
