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中泰证券:生猪产能实质性加速去化 左侧投资已经启动

Zhongtai Securities: Pig production capacity has substantially accelerated, and investment on the left has already begun

Zhitong Finance ·  11/06/2023 14:37

Judging from the historical review, during the decapitalization stage, the substantial acceleration of the removal of production capacity is a landmark sign that investment on the left has begun. This is also the core contradiction in the current pig sector.

The Zhitong Finance app learned that Zhongtai Securities released a research report saying that since the beginning of 2023, pig prices have continued to fluctuate at a low level, and production capacity has continued to slowly decline during this period. Judging from the historical review, during the decapitalization stage, the substantial acceleration of the removal of production capacity is a landmark sign that investment on the left has begun. This is also the core contradiction in the current pig sector. The bank believes that against the backdrop of poor pig prices during the peak season, low piglet prices, worsening swine diseases, and the continued deterioration of the capital chain of the industrial chain, it is expected that the diversification of energy production will accelerate substantially starting in the fourth quarter, and investment on the left side of the pig sector has already begun.

The focus is on Wen's shares (300498.SZ), and it is recommended to focus on Muyuan shares (002714.SZ), Huatong shares (002840.SZ), Xinwufeng (600975.SH), superstar agriculture and animal husbandry (603477.SH), and Tang Renshen (002567.SZ).

The main views of Zhongtai Securities are as follows:

Performance: In Q3, pig prices rebounded month-on-month, and the net profit of the four lowest-cost pig companies reversed their losses month-on-month.

In the third quarter of '23, 13 listed pig companies listed a total of 34.752 million pigs, an increase of 1.6% over the previous year, an increase of 30.8% over the previous year, and the market share rose to 21.5%. The national average price of pigs in 23Q3 was 16.05 yuan/kg, down 29.4% year on year and up 12.2% month on month. Based on this, the total revenue of the 14 pig companies was 120,958 billion yuan, down 6.2% year on year, up 7.3% month on month. Total net profit from the mother was 1,141 billion yuan, down 107.3% year on year, down 107.3% year on year, a significant reduction in losses from 23Q2 of -7.95 billion yuan. The performance of pig companies in the third quarter of '23 was divided. The four lowest-cost companies, namely Muyuan Co., Ltd., Wenshi Co., Ltd., Superstar Farming and Animal Husbandry, and Shennong Group, all achieved profits, while the remaining 10 companies still lost money.

Production capacity: 23Q3 fixed assets were basically flat month-on-month, and the month-on-month decline in productive biological assets increased.

Fourteen listed pig companies had total fixed assets of 229 billion yuan in the third quarter of '23, a month-on-month increase of only 0.2%. Among them, Xinwufeng and Shennong Group had the highest month-on-month fixed asset growth in 23Q3, with 14.9% and 9.8% respectively. New Hope saw the biggest month-on-month decline, at -2.2%. 22Q3-Q4. As pig prices rose, the total productive biological assets of 14 pig companies continued to grow, but pig prices declined rapidly in December '22 and continued to fluctuate at a low level in '23. During this period, the total productive biological assets of 14 pig companies continued to decline, and the month-on-month decline in 23Q3 increased to 4.0%. Among them, Aonong Biotech, Dongrui shares, and Tianbang Foods had the highest month-on-month decline in productive biological assets, at -26.0%, -15.3%, and -13.6%, respectively. Shennong Group, Huatong shares, and Xinwufeng increased the most month-on-month, at 6.3%, 5.5%, and 4.4%, respectively.

Funding: In '23, debt repayment indicators continued to deteriorate, and the average balance ratio reached an all-time high.

Due to the industry's continuous losses in the first three quarters of 23 years, and the industry is also cautious about pig price expectations in '24, listed pig companies generally actively or passively increased their liabilities. The average balance ratio of the 14 pig companies rose to 63.9% in the third quarter, reaching a record high. Of the 14 listed pig companies in the third quarter of '23, only Muyuan, Wen's, and Tiankang declined month-on-month. The others all increased, and some pig companies' balance ratios have already exceeded 85%. The current ratio and speed ratio of short-term debt repayment indicators declined continuously in Q1-Q3 in '23. As of the end of the third quarter, the average liquidity ratio and fluctuation ratio of the 14 pig companies fell to 0.94 and 0.45, respectively, and the industry's overall short-term solvency was poor.

Risk warning:Risk of inaccurate pig price prediction; risk of swine disease; risk of large fluctuations in raw material prices; risk of third party data being distorted; there is a risk that public information used in research reports may lag behind or be updated in a timely manner.

The translation is provided by third-party software.


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