Breeding sector: 1) pigs: pig breeding has once again entered the loss range, or accelerate the deregulation of industry capacity. Since December 2021, the price of pigs has continued to decline. On January 10, 2022, the price of three yuan pigs abroad fell to 15 yuan / kg, down 6.3% on a weekly basis and 59.24% on a year-on-year basis; By November 2021, the number of fertile sows in China had reached 42.96 million, a month on month decrease of 1.2% and a year-on-year increase of 8.8%. Compared with the normal number of 41 million sows, there is still some room for decline. In the short term, the industry showed a trend of “low peak season”, mainly due to the large amount of pork slaughtering recently and abundant supply, resulting in oversupply. It is expected that the pig price will still decline around the Spring Festival. On January 14, 2022, the profit loss of outsourcing piglet breeding was 38.8 yuan / head, the profit turned from profit to loss, and the profit loss of self breeding and self breeding was 269.8 yuan / head. The range of month on month loss accelerated and has been in the loss range for five consecutive weeks. We believe that the industry’s willingness to make up the column is still low. The pig breeding industry generally holds a pessimistic attitude towards the market in the first half of 2022. The breeding profit is comprehensively lost and the range is deepened, and the capacity is expected to accelerate. It is suggested to pay attention to the opportunity of cycle reversal, layout the targets of high elasticity of capacity and cost, and pay attention to: Wens Foodstuff Group Co.Ltd(300498) , Tecon Biology Co.Ltd(002100) , Fujian Aonong Biological Technology Group Incorporation Limited(603363) , Muyuan Foods Co.Ltd(002714) . 2) Poultry: the capacity removal of yellow feather chicken is basically completed, and the chicken price is expected to reverse in 2022. In terms of yellow feather chicken, the average price of fast big chicken, medium speed chicken, native chicken and black bone chicken was 6.32 yuan / 6.97 yuan / 8.43 yuan / 7.35 yuan / 500g on January 14, 2022, with a change of – 6.4% / – 1.1% / – 1.2% / – 0.3% and a year-on-year change of – 9.8% / + 4.8% / + 2.7% / – 8.5% respectively. Short term prices are still dominated by decline. According to the data of poultry branch of China Animal Husbandry Association, at present, the stock of parents’ generation of yellow feather chicken has basically decreased to the normal level in 2018. In the fourth quarter, retail investors are pessimistic about the industry expectation for the Spring Festival in 2022, and their willingness to invest seedlings is low. The supply may decline rapidly after the Spring Festival. Therefore, there is a strong certainty about the contraction trend of commodity generation supply in 2022, In the medium and long term, under the background of capacity deregulation and supply contraction, the chicken price may reverse, and the industry leaders with high market share and good cost control ability are expected to fully benefit. It is suggested to pay attention to: Jiangsu Lihua Animal Husbandry Co.Ltd(300761) , Wens Foodstuff Group Co.Ltd(300498) , Hunan Xiangjia Animal Husbandry Company Limited(002982) . 3) Beef cattle breeding: in September 2020, the general office of the State Council issued the opinions on promoting the high-quality development of animal husbandry, which put forward the goal of “maintaining the annual self-sufficiency rate of beef and mutton at about 85%. There is a large gap between supply and demand in the industry. Pay attention to the opportunities of large-scale beef cattle breeding. It is suggested to pay attention to: Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) .
Animal protection sector: the policy is clear to promote the market-oriented and standardized development of the industry, and the leader of R & D + production + market advantage will benefit. Under the background of the effective promotion of the policy of “fighting first and then supplementing” and the gradual and complete abolition of the policy of political seedling collection in 2025, veterinary biological products usher in the era of market-oriented development; Since July 2020, there has been a comprehensive “Prohibition of resistance” in feed, a “restriction of resistance” and “reduction of resistance” in aquaculture, and the demand for high-end therapeutic veterinary chemicals has ushered in rapid growth; The code for quality management of veterinary drug production (revised in 2020) was issued on April 21, 2020 and will be implemented from June 1, 2020. By May 31, 2022, the backward industry capacity that has not reached the new target has not been reached or has been eliminated, the industry access threshold has been raised, and the competition pattern is expected to be optimized rapidly. In the medium and long term, industry leaders with the advantages of joint research and development of front-end scientific research institutes + high-quality production capacity + market channels are expected to make full profits. Key recommendations China Animal Husbandry Industry Co.Ltd(600195) : market seedlings and high-end chemical drugs support high performance growth. It is recommended to pay attention to: Jinyu Bio-Technology Co.Ltd(600201) , Hvsen Biotechnology Co.Ltd(300871) , Tianjin Ringpu Bio-Technology Co.Ltd(300119) .
Seed industry sector: the era of transgenic commercialization may accelerate, and pay attention to the long-term layout opportunities of seed industry. The emphasis on food security continued to rise, and the seed industry revitalization action plan was adopted in July 2021; In November 2021, the Ministry of agriculture and rural areas issued the decision of the Ministry of agriculture and rural areas on amending some seed industry regulations (Draft for comments), adding relevant rules on the approval of genetically modified crop varieties; On December 26, China’s rural work conference once again proposed “vigorously promoting seed sources and other key agricultural core technologies”. As an important prerequisite for food security, seed industry security has clear policy direction, the expansion space of transgenic breeding can be expected, and the leader of breeding technology is expected to benefit. It is suggested to pay attention to: Shandong Denghai Seeds Co.Ltd(002041) , Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Winall Hi-Tech Seed Co.Ltd(300087) , Beijing Dabeinong Technology Group Co.Ltd(002385) .
Risk tips: sudden epidemics or natural disasters, repeated covid-19 epidemics, and the implementation progress of industrial policies is less than expected.
