Core view
After new year's day, the peak season of pig prices is not prosperous, accelerating the decline. The average price of pigs in 22 provinces and cities this week was 14.48 yuan / kg, a year-on-year decrease of 60.5% and a decrease of 7.5% compared with last week. The peak consumption season before the festival did not drive the recovery of pig prices. The continuous decline of pig prices expanded the breeding loss again. The average loss of self bred healthy pigs this week was 269.75 yuan, an increase of 154.29 yuan compared with last week; The profit to loss of purchased piglets was 38.76 yuan / head, and the profit was 103.06 yuan / head last week.
The decline of pig price stimulates the deregulation of production capacity, and the reversal of pig cycle is gradually approaching. The stock of fertile sows is an important pre indicator to judge the supply and price of pigs in the next 10 months. From the empirical law, farmers usually determine the elimination and replacement of fertile sows according to the current pig price. In this cycle, fertile sows began to be depopulated in July 2021, and the month on month decline expanded from 0.5% in July to 2.5% in October. The corresponding pig price fell from 16 yuan / kg in July to 12.8 yuan / kg in October. With the rebound of pig price to 17.2 yuan / kg in November, the month on month decline narrowed to 1.2%. At present, the cumulative month on month decline of fertile sows has reached 6.9%. From the trend of pig prices in December and January, fertile sows are expected to maintain the month on month decline. The reduction of supply and price reversal in the future are high probability events.
Investment proposal and investment object
Capacity removal and pig price reversal are important configuration nodes. Historically, in each round of pig cycle, the stock price has started to rise since before the reversal of pig price. Corresponding to the above logic, the rise of stock price reflects the expectation of capacity deregulation formed by the decline of pig price. Therefore, under the background of the continuous decline of pig prices, we believe that the configuration of pig breeding sector is the most deterministic. It is recommended to pay attention to Muyuan Foods Co.Ltd(002714) with leading cost advantage; Business improvement, marketing volume and cost recovery Wens Foodstuff Group Co.Ltd(300498) ; The Fujian Aonong Biological Technology Group Incorporation Limited(603363) with higher growth rate of slaughter volume; Production capacity and sufficient funds New Hope Liuhe Co.Ltd(000876) .
Risk tips
Shenzhen Agricultural Products Group Co.Ltd(000061) price fluctuation risk, epidemic risk, policy risk, industry competition and product risk
