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国金证券:生猪养殖板块股价已处底部区间 存较好投资机会

Guojin Securities: The stock price of the pig breeding sector is already in the bottom range, and there are good investment opportunities

Zhitong Finance ·  11/06/2023 15:22

The target proposal is based on multiple dimensions of selection, such as the cost level of the enterprise, the elasticity of listing volume growth, degree of implementation of listing volume, and valuation situation.

The Zhitong Finance app learned that Guojin Securities released a research report saying that currently the stock price in the pig breeding sector is already in the bottom range, and there are good investment opportunities, so it is recommended to actively lay out. Targets are selected from multiple dimensions, such as the elasticity of the company's listing volume growth, degree of execution of listing volume, valuation situation, and cost level. The valuation of the pig breeding sector is in the bottom range after the pullback. Companies with sufficient capital and better costs still maintain good growth and are expected to achieve cycle and growth resonance in the future. The pig breeding sector has good investment opportunities during the period of loss of production capacity, so it is recommended to focus on it.

Key recommendations:Superstar Agriculture and Animal Husbandry (603477.SH), Xinwufeng (600975.SH), Huatong Co., Ltd. (002840.SZ), Wenshi Co., Ltd. (300498.SZ), Muyuan Co., Ltd. (002714.SZ), etc.

Guojin Securities's views are as follows:

The performance of the aquaculture sector continues to be under pressure, and the prosperity of the planting industry has maintained.In 2023, the Q1-Q3 agriculture, forestry, fishery and animal husbandry sector achieved operating income of 947.2 billion yuan, an increase of 7.69% over the previous year. The sector's revenue side grew steadily; it achieved net profit of 8.952 billion yuan, a decrease of 334.13% over the previous year. The revenue of the Q3 agriculture, forestry, fishery and animal husbandry sector in 2023 was 35.8 billion yuan, up 4.18% year on year and 14.17% month on month; net profit was 2,675 billion yuan, down 84.22% year on year and 136.73% month on month. Fluctuations in revenue and profit were mainly affected by fluctuations in product prices in the livestock and poultry farming sector. Although pig prices improved in the third quarter in the short term, the overall price was still below the industry's average breeding cost line. The industry's continued losses reduced pig breeding production capacity for 9 consecutive months, and a new upward cycle can be expected. White feather chicken is affected by the introduction side, and it is expected that there will be a supply gap in the second half of the year. According to expectations, the chicken seedling side will show better profits; however, domestic production substitution and feather swapping in the first half of the year made the transmission of the production capacity gap slow down, and it is expected that the price of white feather chicken terminal products will improve by the end of the year. The supply side of yellow feather chicken is already at a low level. As consumption recovers and inventory is depleted, industry profits are expected to recover in the second half of the year. Food prices are still high. Demand for corn seeds is expected to remain strong, and the continued implementation of genetically-modified policies may expand the seed industry in China. Leading enterprises in the seed industry are expected to develop rapidly under the melody of food security and independent control of seed sources.

Pig breeding: In 2022, the pig breeding industry achieved profit throughout the year, but the cost variance caused the profit and loss of enterprises to vary. The cash flow of high-cost players continued to deteriorate, and there was great pressure on operations.Pig prices have continued to be sluggish since 2023, and the listed pig breeding business was in a state of loss in the first three quarters. Losses in the industry and disruptions caused the loss of production capacity for nine consecutive months. Most breeding groups have shown a loss trend in the past two years. Although pig prices have risen in the short term, breeding companies have still been in a state of loss since this year, and the trend of reducing production capacity in the industry is expected to continue. The bank believes that in the context of declining consumption at the end of last year and an increase in the average production efficiency of the industry, pork supply in 2023 may exceed 2022, and the overall average price performance in 2023 may be lower than in 2022. Capacity removal is likely to become the main theme of the pig breeding industry this year. Currently, the stock price of the pig breeding sector is in the bottom range. There are good investment opportunities, so an active layout is recommended. Targets are selected from multiple dimensions, such as the elasticity of the company's listing volume growth, degree of execution of listing volume, valuation situation, and cost level. The valuation of the pig breeding sector is in the bottom range after the pullback. Enterprises with sufficient capital and better costs still maintain good growth and are expected to achieve cycle and growth resonance in the future. The pig breeding sector has good investment opportunities during the period of loss of production capacity, so it is recommended to focus on it. The target proposal is to select from multiple dimensions, such as the cost level of the enterprise, the elasticity of listing volume growth, degree of execution of listing volume, and valuation situation. Key recommendations: Superstar Agriculture and Animal Husbandry, Xinwufeng, Huatong, Wenshi, Muyuan, etc.

Poultry farming: As a result of overseas avian influenza, the introduction of white-feathered ancestral chickens in China began to shrink in May 2022. The bank believes that the production capacity gap caused by poor introduction will gradually spread downstream, and the sector's prosperity is expected to continue to improve at the end of 2023.Yellow feathered chicken is currently at the lowest level since 2018. The decline in yellow chicken prices a year later caused the industry to remove production capacity again. Yellow chicken breeding enterprises suffered serious losses in the first half of the year. Although the price of yellow chicken has improved recently, the industry's production capacity is still in a downward channel. The bank believes that the price of yellow chicken is expected to remain relatively profitable during the peak season. Looking ahead to next year, the continuous reduction in the industry's production capacity may make the price of yellow chicken more profitable.

Seed sector: Food security is the foundation for the country's steady economic and social development, and has always been a top priority in building a strong agricultural country. As an important medium for grain production, revitalizing the seed industry is an important way for our country to achieve food security.On October 17, 2023, the Ministry of Agriculture and Rural Affairs issued the “Notice on the Preliminary Examination of Varieties Approved at the Fourth Approval Meeting of the 5th National Crop Variety Evaluation Committee”. A total of 37 genetically modified corn varieties and 14 genetically modified soybean varieties passed the preliminary review. The preliminary approval of genetically modified varieties has been officially announced, representing a new opportunity for the development of China's seed industry. As China increases the intellectual property protection of the seed industry and the commercialization of genetically modified crops, the competitive pattern of the seed industry is expected to improve, industry concentration can be expected to increase, and leading seed companies with core breeding advantages are expected to develop rapidly. The bank recommends focusing on leading seed companies with first-mover advantages and core breeding advantages.

Risk warning:Production capacity has fallen short of expectations; the promotion process of genetically modified corn has been delayed; animal diseases have broken out; and prices of agricultural products have fluctuated.

The translation is provided by third-party software.


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