华泰证券:猪价大幅上涨或因异常天气、二育、压栏共振 布局养殖龙头

Huatai Securities: Pig prices have risen sharply or are leading breeding leaders due to abnormal weather, secondary breeding, and pressure resonance

Zhitong Finance ·  08/09/2023 07:31

The Zhitong Finance App learned that Huatai Securities released a research report stating that pig prices rose sharply last week, which may be due to factors such as abnormal weather, secondary education, and pressure. Pig prices have already entered a volatile stage. Pig breeding companies may break out of a differentiated market, and companies with high growth, excellent cost control, and good debt and cash flow conditions are expected to have allocation opportunities. It is recommended to focus on leading companies with high listing growth and cost advantages.

The main views of Huatai Securities are as follows:

Price and profit:Pig prices rose sharply last week (July 31 to August 4, 2023). According to Yongyi consultation, the average price of pigs last week was 16.48 yuan/kg, compared to 14.68 yuan/kg last week. According to data from Boya Hexun, on August 4, 2023, the profit of pig breeding enterprises on their own breeding was -38 yuan/head, and the profit of the industry's outsourced piglet breeding was -134 yuan/head.

Last week's focus was on the sharp rise in pig prices, which may be due to factors such as abnormal weather, secondary education, and pressure.According to Yongyi Consulting, pig prices rose significantly last week. The bank believes that the main reason is: 1. There were abnormal weather such as typhoons in parts of the country last week, and pig transportation and release were blocked; 2. Farmers reluctantly pressured the sales column to increase their weight; 3. Secondary fattening groups entered the market, reducing the supply of pigs in the short term. The reason for the sudden sharp rise in pig prices is a decrease in supply in the short term, but in the medium to long term, acts such as secondary education actually increase the supply of pigs. On the demand side, current demand is still relatively weak. Therefore, future pig prices still need to be watched.

Short-term pig price outlook:According to statistics from Yongyi Consulting, the current average number of pigs released is around 121 kg/head. Their weight is basically stable month-on-month and is basically the same as the previous year. The daily slaughter volume at the sample slaughterhouse has been weak since the Dragon Boat Festival holiday. Considering weak consumption, the bank believes it may be difficult for pig prices to improve significantly in the short term.

Production capacity side (official data): At the end of the second quarter of '23, 42.96 million sows were able to reproduce, down 0.2% from the previous month and up 0.5% from the previous year. The increase was narrower than the 2.9% increase in the first quarter.According to data from the Bureau of Statistics, the number of breeding sows kept nationwide in June was 42.96 million, and 375.48 million heads were released in the first half of the year, an increase of 2.6% over the previous year.

Production capacity side (not official data from the Ministry of Agriculture): According to Yongyi data, the number of sows that can breed in June was -1.68% month-on-month, and the number of the top 40 breeding companies fell 0.58% month-on-month in June. Group companies and small to medium scale farmers varied greatly in production capacity. Small to medium scale farmers were clearly declining, or due to factors such as tight capital and pessimism about the future market. In June 2023, 147,000 sows were eliminated, an increase of 12% over the previous year. Looking ahead to the future market, the bank believes that farming profits are currently poor, that the industry is not active in supplementing the list, and that a large amount of production capacity has been eliminated, so there is a high possibility that production capacity will continue to decline in the third quarter.

Medium- to long-term pig price outlook:According to data from the Ministry of Agriculture, the production capacity reduction cycle is from June 2021 to April 2022. A total of 8.5% of breeding sows were removed in 11 months, while in the production capacity recovery cycle from May 2022 to December 2022, a total increase of 5.1% of sows were able to reproduce in 8 months. However, according to data from the Ministry of Agriculture, breeding sows from January to June 2023 has been declining for six consecutive months. As the industry continues to reduce production capacity due to cash flow pressure, the bank believes that pig prices and industry profits are expected to reverse in 2024.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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