I. Market Review
The agricultural index outperformed the big market, and the fishery recorded a positive increase. 1. Last week, the Shenwan agricultural index fell 0.86%. Over the same period, the Shanghai Composite Index fell 1.62%, the Shenzhen Component Index fell 1.34%, and the performance of the agricultural sector was better than that of the big market. 2. Specifically, for the eight secondary sub sectors, only fishery rose, while others fell. The Shenzhen Agricultural Products Group Co.Ltd(000061) processing and aquaculture industry in the falling sub sectors fell slightly. 3. The top 10 gainers are concentrated in the fishery sector, and the top 10 losers are concentrated in the planting sector. The top three stocks were Zhanjiang Guolian Aquatic Products Co.Ltd(300094) , Fortune Ng Fung Food (Hebei) Co.Ltd(600965) and Joyvio Food Co.Ltd(300268) .
II. Investment suggestions
With the deep decline in pig prices, we expect the production capacity of the pig industry to be reduced or accelerated in the first half of the year, and a new round of cycle reversal may be ushered in in the third quarter. We are optimistic about medium and long-term investment opportunities in aquaculture and seed industry, and focus on recommending high-quality industry leaders with safe valuation.
1. Seed industry: layout the future industrial upgrading, continue to be optimistic about the seed industry, and focus on recommending high-quality seed industry leaders. The seed industry policy has been intensively introduced recently. It is expected that with the implementation of favorable policies, genetically modified corn and soybean seeds may be trial produced and listed in 2022 and mass produced and listed in 2023. The transformation of transgenic seed penetration from 0 to 1 is expected to drive the seed industry into a new period of rapid growth, and the industry competition pattern is expected to be significantly optimized. Leading enterprises have first mover advantages in transgenic technology R & D and product layout, and are expected to gain more market share in the future. We maintain the positive rating of the seed industry, especially the investment opportunities of the high boom corn seed industry. In terms of individual stocks, focus on Shandong Denghai Seeds Co.Ltd(002041) with excellent variety combination and continuous growth, as well as Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Beijing Dabeinong Technology Group Co.Ltd(002385) with leading advantages in transgenic R & D and variety layout, and pay attention to Winall Hi-Tech Seed Co.Ltd(300087) .
2. Breeding industry chain: 1) pig breeding: in the first half of the year, the production capacity was reduced or accelerated, and it was a cost leading enterprise with safe operation and reasonable valuation. The recent decline of pig prices has accelerated, and the industry has entered the stage of comprehensive loss again. According to statistics, as of the end of last weekend (January 14), the average price of pigs in 22 provinces and cities in China was 14.48 yuan / kg, down 7.48% week on week; In the self breeding mode, the pig lost 269.75 yuan, 154 yuan more than last week; The outsourcing mode changed from profit to loss. The pig lost 38.76 yuan and made a profit of 103.06 yuan last week. On the supply side, judging from the changes in the stock of fertile sows in the early stage, it is expected that the number of prenatal pigs will keep increasing month on month in April 22. On the demand side, the peak of bacon production and the end of the Spring Festival stock period weakened the driving force of consumption growth. Under the change of supply and demand, the market pattern tends to loosen, and we expect the pig price will continue to adjust after the festival. Official data show that at the end of November, the number of fertile sows in China was 42.96 million, down 1.2% month on month, 4.8% higher than the normal number. According to official data, although the speed of capacity removal in the industry has slowed down due to the rebound of pig prices recently, the trend of capacity removal is still continuing. We firmly believe that after the double festival, with the continuous adjustment of pig prices, the pace of capacity removal in the industry will accelerate, and the new cycle may reverse or come in the second half of the year. In terms of valuation, at present, the market value of most pig enterprises is lower than or equal to the historical average, and the valuation is not expensive. Therefore, we continue to maintain the optimistic rating of the sector. Individual stocks mainly recommend Muyuan Foods Co.Ltd(002714) with leading cost, as well as Wens Foodstuff Group Co.Ltd(300498) and Tecon Biology Co.Ltd(002100) with obvious improvement in production indicators. 2) Dynamic insurance: on the eve of the new cycle, the prosperity of pig vaccine was under short-term pressure, but the static PE was at the bottom of history, the safety margin of valuation was high, and the optimistic rating was maintained. Individual stocks mainly recommend Wuhan Keqian Biology Co.Ltd(688526) with reasonable valuation and significant growth.
III. industry data
Pigs: in the second week, the average ex factory price of pigs in 22 provinces and cities was 14.48 yuan / kg, down 1.17 yuan / kg from last week; The average loss of self breeding heads in the main pig producing areas in China was 269.75 yuan. By the end of November 2021, the number of fertile sows in China was 42.96 million, a year-on-year increase of 4.7%;
Broiler: in the second week, the average price of chicken seedlings in Yantai, Shandong Province was 1.2 yuan / feather, unchanged on a weekly basis; The average price of white feather chicken in front of the shed was 3.98 yuan / kg, up 0.02 yuan / kg from last week; In the second week, the single feather loss in broiler breeding was 0.54 yuan;
Feed: according to the statistics of Boya Hexun, in the second week, the average price of broiler feed was 3.82 yuan / kg, up 0.02 yuan / kg from last week; The price of fattening pig feed was 3.62 yuan / kg, unchanged on a weekly basis;
Aquatic products: in the second week, the sea cucumber in Shandong Weihai bulk wholesale market was 200 yuan / kg, unchanged on a week-on-week basis; The price of scallops was 12 yuan / kg, unchanged on a week-on-week basis; Shrimp price was 360 yuan / kg, unchanged on a week-on-week basis; The price of abalone was 110 yuan / kg, unchanged from last week;
Sugar, cotton, corn, soybean meal, wheat and rice: in the second week, the spot price of Nanning white sugar was 5662 yuan / ton, down 5 yuan / ton from last week; In the second week, the price of 328 grade cotton in China was 22440 yuan / ton, up 122 yuan / ton from last week; The average purchase price of corn in China was 2622 yuan / ton, down 6 yuan / ton from last week; The average spot price of soybean meal in China was 3669 yuan / ton, up 51 yuan / ton from last week; The average spot price of wheat in China was 2872 yuan / ton, up 25 yuan / ton from last week; The average price of Japonica Rice in China was 2736 yuan / ton, up 16 yuan / ton from last week;
IV. risk warning
The price changes of raw materials such as sudden epidemic diseases, livestock and poultry, aquatic products and corn were less than expected
