Breeding sector: 1) live pigs: Wen’s and muyuan released performance forecast, or promoted the acceleration of capacity removal in the industry. 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; As of December 2021, the number of fertile sows in China was 43.29 million, with a month on month increase of 0.8% and a year-on-year increase of 4.0%. Compared with the normal number of 41 million, there is still some room for decline. On January 21, 2022, the profit loss of outsourcing piglet breeding was 33.2 yuan / head, which narrowed slightly month on month, while the profit of self breeding was – 300.4 yuan / head, which accelerated the expansion of month on month. We believe that the industry’s intention to make up the column is low under the background of increasing losses. The pig breeding industry is generally pessimistic about the market in the first half of 2022, and the deregulation of production capacity is expected to continue to accelerate. It is suggested to pay attention to the opportunity of cycle reversal. This week, Wen’s and muyuan successively released performance forecasts. Superimposed on the data published in 2021, it can be seen that muyuan’s cost advantage has been fully reflected. Considering multiple factors such as the scale and certainty of slaughter and the elastic space for cost reduction, it is suggested to pay attention to the pig sector: 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: Lihua released a performance forecast that chicken prices are 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 6.43 yuan / 6.51 yuan / 8.52 yuan / 7.39 yuan / 500g on January 21, 2022, with a change of 1.7% / – 6.6% / 1.1% / 0.5% and a year-on-year change of – 9.9% / + 0.5% / + 3.3% / – 11.8% respectively. The national average short-term price is still dominated by decline. According to the data of the poultry branch of China Animal Husbandry Association, the stock of yellow feather chicken parents has basically decreased to the normal level in 2018. The supply contraction trend has strongly supported the chicken price. It is expected that the peak consumption seasons such as 2022q2 and May Day holidays will come or support the reversal of the national chicken price. Lihua released a performance forecast within the week. Benefiting from the increase in the price of Q4 yellow chicken in Jiangsu, the company achieved a positive profit of 200 ~ 250 million yuan in fy2021q4 single quarter. In the yellow chicken reversal market, we are optimistic about the industry leaders with good cost control ability and growth. We suggest paying 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) .
Dynamic insurance 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 “fight first and then supplement” 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 “ban on resistance” in feed, and “limit resistance” and “reduce resistance” in breeding. 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 suggested 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 genetically modified 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 action plan for the revitalization of seed industry 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 industrial policy direction, the expansion space of transgenic breeding can be expected, and the leader of breeding technology advantage 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.
