Financial Services Association, April 11 (Reporter Zhang Chenjing) After a long and coldest pig cycle, the pig market dawned in March. Recently, in the March sales data disclosed by listed pig companies, the number of domestic pigs released has rebounded, and the average sales price has picked up accordingly. Leading pig companies' Q1 losses may narrow month-on-month. A CIFA reporter learned from an industry interview that the loose pig supply situation began to improve in March, and pig prices are expected to rise moderately in the second quarter.

Pig companies' sales volume and price rose sharply in March

After experiencing a long period of downturn, the pig market showed the characteristics of not being weak in the off-season. The sales volume and price of pig companies listed in March generally rose sharply from month to month. Currently, with the exception of the month-on-month decline in sales volume of Zhenghong Technology (000702.SZ) in March, sales of all other pig companies increased month-on-month in March. Among them, second-tier and new pig companies saw significant increases in sales due to the release of production capacity. Keming Foods (002661.SZ) more than doubled month-on-month, while Tiankang Biotech (002100.SZ), Jin Xinnong (002548.SZ), and Dabeinong (002385.SZ) increased by more than 50% month-on-month.

Among the leading pig companies, Muyuan Co., Ltd. (002714.SZ), Wen's Co., Ltd. (300498.SZ), and New Hope (000876.SZ) listed 5.471 million heads, 2.655 million heads, and 1,525,500 heads respectively in March. Among them, Wen's shares and New Hope's sales volume increased 36.34% and 16.56% month-on-month in March.

It is worth mentioning that judging from the sales structure, some listed pig companies saw a sharp increase in piglet sales in March. Muyuan Co., Ltd. sold 475,000 piglets in March alone. Monthly sales accounted for 79.6% of total piglet sales in the first quarter. Companies affiliated with Wen's Co., Ltd., which have always rarely exported pig seedlings, have also begun selling piglets to the outside world.

The root cause of the increase in piglet sales by listed pig companies is “profitability”. Currently, the average profit from piglet sales exceeds 200 yuan, which is higher than the average profit of fattening pigs. Selling piglets can quickly obtain cash and reduce the risk of listing. A relevant person from Muyuan Co., Ltd. once told the Financial Federation reporter that after the Spring Festival, there was a certain increase in the price and demand for piglets in the market.

Zhu Zengyong, a researcher at the Beijing Institute of Animal Husbandry and Veterinary Medicine of the Chinese Academy of Agricultural Sciences, told the Financial Federation reporter that in fact, there was a similar rise in piglets during the same period last year. The key driving factor is that people have good expectations for pig prices in the second half of the year. In particular, pig prices have shown a volatile upward trend in the last three weeks, which has led to a further rise in piglet prices. Second, production capacity for breeding sows was reduced last year, and the previous situation with a relative excess of piglets was alleviated.

Although optimistic about pig prices in the second half of the year, the industry is still cautious in filling up the column in this round. Farmers told the Financial Federation reporter that currently the retail cost is around 7 yuan to 7.5 yuan/kg, and pig prices have risen, but the empty rate is still quite high in some regions of the north. The impact of the epidemic last year led to a decrease in piglets, and at the same time, retail funds are tight due to long-term losses.

Q1 pig companies' losses narrow and Q2 pig prices may rise moderately

Since the beginning of March, pig farming has changed from profit to loss. According to Zhuochuang data, as of April 9, the country's profit was 113.53 yuan for a self-raised pig and 422.1 yuan for fattening a piglet.

Judging from the unit sales price of listed pig companies, the average sales price picked up month-on-month in March, but it did not completely return above the comprehensive cost line of listed pig companies. Listed pig companies may still be at a slight loss in March. According to financial news agency reporters, Muyuan Co., Ltd. and Wen's shares may have lost 2.3 billion yuan and 1.1 billion yuan respectively in the first quarter, which is narrower than the loss in the fourth quarter of last year.

In the secondary market, capital has already begun to rush. Pork concept stocks experienced a wave of rebound in the past month. Among them, Shennong Group (605296.SH) and Huatong Shares (002840.SZ) ranked among the top in terms of gains, and pig futures also reached new highs during this period.

According to industry analysis, the recovery in pig prices in March was mainly dominated by the supply side. Zhu Zengyong further stated that the previous loose pig supply situation began to improve in March, and pig prices are expected to fluctuate and rise moderately in the second quarter.

Frontline analysts told the Financial Federation reporter that most of them are now bullish on the late-stage pig market. Currently, some people have begun to prepare goods before May 1st, but the overall ability of terminals to accept high prices is still quite poor. It is very good that pig prices can reach 9-10 yuan/kg in the second half of this year.