I. Market Review
Agricultural Index callback, breeding and planting adjustment range is small. 1. Last week, the Shenwan agricultural index fell 3.19%. Over the same period, the Shanghai Composite Index rose 0.03%, the Shenzhen Component Index fell 0.85%, and the performance of the agricultural sector lagged behind the market. 2. Specific to the eight secondary sub sectors, only feed rose, while others fell. The decline in breeding and planting in the falling sub sectors was small. 3. The top 10 gainers are concentrated in the feed sector, and the top 10 losers are concentrated in the fishery sector. The top three stocks were Fujian Aonong Biological Technology Group Incorporation Limited(603363) , Angel Yeast Co.Ltd(600298) and Cnfc Overseas Fisheries Co.Ltd(000798) .
II. Investment suggestions
At present, it is in the intensive release period of performance forecast, and many listed companies in the aquaculture sector have issued announcements of significant performance pre reduction or pre loss. We believe that the performance changes of breeding listed companies basically meet the expectations, and the current investment focus should also focus on the judgment of the speed of capacity removal and the reversal time point of the new cycle. We expect that the pig price may fall deeply in the first half of 22 years, which will drive the speed-up of industrial production capacity. Therefore, the probability of pig cycle reversal in the third quarter is high, so we continue to be optimistic about investment opportunities in the breeding industry. At the current time, we focus on recommending high-quality leaders in the industry with safe valuation.
1. Breeding industry chain: 1) pig breeding: most companies' performance changes in 2021 meet expectations, continue to be optimistic about the pig breeding sector, and pay attention to the cost leading enterprises with safe operation and reasonable valuation. Recently, a number of listed aquaculture companies issued performance forecasts for 2021, Jiangsu Lihua Animal Husbandry Co.Ltd(300761) is expected to lose 350-400 million yuan and make a profit of 254 million yuan last year; Wens Foodstuff Group Co.Ltd(300498) the estimated loss is 13-13.8 billion yuan, a year-on-year decrease of 275.06% - 285.84%; Muyuan Foods Co.Ltd(002714) the expected profit is 6.5-8 billion yuan, a year-on-year decrease of 70.86% - 76.32%. We believe that the performance changes of breeding listed companies are basically in line with expectations, and the current investment focus should focus on the judgment of the speed of capacity removal and the reversal time point of the new cycle. After new year's day, pig prices continued to fall and are expected to fall further after the Spring Festival. At the end of December, there were 43.29 million fertile sows in China, an increase of 0.76% month on month, 5.58% higher than the normal population. According to official data, the deregulation of industrial capacity is suspended. We believe that with the continuous adjustment of pig prices after the double festival, the pace of capacity removal in the industry will restart and accelerate, so we maintain the judgment of the reversal of the new cycle in the second half of the year. At present, the market value of most pig enterprises is lower than the historical average, and the valuation is not expensive. They continue to give optimistic ratings to the sector. In terms of individual stocks, focus on Muyuan Foods Co.Ltd(002714) with leading cost and 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 pressure in the short term, but the static PE was at the bottom of history, the safety margin of valuation was high, and the optimistic rating was maintained. The key recommendation of individual stocks is Wuhan Keqian Biology Co.Ltd(688526) with reasonable valuation and significant growth.
2. Seed industry: layout the future industrial upgrading, continue to be optimistic about the seed industry, and focus on recommending high-quality seed industry leaders. Since the second half of 2021, transgenic policies have been intensively introduced in the seed industry. With the formal implementation of the policy, genetically modified corn and soybean seeds are expected to be produced and listed rapidly, driving the seed industry into a new period of rapid growth. Transgenic technology has raised the entry threshold, and it is expected that the competition pattern of the industry will also be optimized for a long time. The leading enterprises have the first mover advantage in the research and development of transgenic technology 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 of performance, 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. Pay attention to Winall Hi-Tech Seed Co.Ltd(300087)
III. industry data
Pigs: in the third week, the average ex factory price of pigs in 22 provinces and cities was 14.36 yuan / kg, down 0.12 yuan / kg from last week; The average loss of self breeding heads in the main pig producing areas in China was 300.36 yuan. By the end of December 2021, the number of fertile sows in China was 43.29 million, an increase of 4% year-on-year;
Broilers: in the third week, the average price of chicken seedlings in Yantai, Shandong Province was 1.22 yuan / feather, up 0.02 yuan / feather from last week; The average price of white feather chicken in front of the shed was 3.99 yuan / kg, up 0.01 yuan / kg from last week; In the third week, the single feather profit of broiler breeding was 0.2 yuan;
Feed: according to the statistics of Boya Hexun, in the third week, the average price of broiler feed was 3.82 yuan / kg, unchanged on a week-on-week basis; The price of fattening pig feed was 3.63 yuan / kg, up 0.01 yuan / kg from last week;
Aquatic products: in the third 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; The price of shrimp 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 third week, the spot price of Nanning white sugar was 5710 yuan / ton, up 48 yuan / ton from last week; In the third week, the price of 328 grade cotton in China was 22583 yuan / ton, up 143 yuan / ton from last week; The average purchase price of corn in China was 2622 yuan / ton, up 9 yuan / ton from last week; The average spot price of soybean meal in China was 3665 yuan / ton, down 5 yuan / ton from last week; The average spot price of wheat in China was 2877 yuan / ton, up 5 yuan / ton from last week; The average price of Japonica Rice in China was 2740 yuan / ton, up 4 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 are less than expected
