The Zhitong Finance app learned that China Galaxy Securities released a research report saying that the overall valuation of the agricultural sector is in a historically low range. Individual stocks suggest focusing on Muyuan shares (002714.SZ), Wenshi shares (300498.SZ), etc. in pig breeding; prebiotic shares (002458.SZ), Minhe shares (002234.SZ), etc. in white feather chicken farming; Lihua shares (300761.SZ) in yellow feather chicken breeding; leading genetically modified enterprises in the breeding industry Longping Hi-Tech (000998.SZ), Denghai Seed Industry (002041.SZ), etc.; feedstock business (002041.SZ), etc.; 002311.SZ); Pre-scientific biology in the animal insurance business ( 688526.SH), China Animal Husbandry Co., Ltd. (600195.SH), etc.; China Pet Co., Ltd. in the pet sector (002891.SZ), Obey Pet (301498.SZ), etc.

The views of China Galaxy Securities are as follows:

The performance of the agricultural sector this week was stronger than Shanghai and Shenzhen 300:12.11-12.15, the agriculture, forestry, animal husbandry and fishery index fell 1.21%, ranking 23rd among the SW level industries; during the same period, Shanghai and Shenzhen 300 fell 1.70%. Among the various sub-industries, animal health (+1.40%) and farming (-0.12%) performed at the top, while feed (-3.11%) and fishery (-2.63%) performed poorly. In terms of individual stocks, Qiule Seed Industry, Langyuan Shares, and Runnong's water saving registered the highest gains.

Pig breeding: On December 15, the PB of the pig breeding sector was 3.20 times, -0.93% over the previous week, in a historically low range. According to Boya Hexun, on December 15, the price of pigs was 14.72 yuan/kg, +8.57% over the week; the price of 15 kg piglets was 22.91 yuan/kg, +4.95% from week to week. According to Yongyi Consulting, the weekly weight of commercial pigs was 122.96 kg, +0.22% over week. On December 15, the profit from breeding self-raised pigs was 274.5 yuan/head, and the weekly loss decreased by 2.17 yuan/head from month to week. At this point, piglet prices have stabilized after falling sharply, but sales have not recovered significantly; driven by winter pickling & holiday consumption, etc., the increase in pig prices this week is relatively obvious. We believe that price increases during this period are normal (prices are very flexible in the same period in previous years), but compared to this year, it is relatively plain. At the same time, pay attention to the spread of the swine disease epidemic after cooling, and observe the pace at which production capacity is being reduced. Considering that industry valuations are at historically low levels, we recommend selecting pig companies with leading cost advantages, continuous improvement in management capabilities, secure capital chains, continued growth, and appropriate valuations. We recommend focusing on Muyuan Shares, Wen's Shares, Tiankang Biotech, etc.

Broiler breeding: On December 15, the PB of the broiler farming sector was 2.06 times, -2.83% over the previous week, in a historically low range. White feather chicken: According to Boya Hexun, on December 15, the average price of raised chicken was 3.66 yuan/kg, +0.97% from week to week; average price of chicken seedlings was 1.87 yuan/feather, -1.06% from week to week; white feather chicken breeding profit - 2.9 yuan/feather, weekly loss decreased by 0.31 yuan/feather; slaughter capacity utilization rate was 68%, week over week - 2pct. According to data from the Association, on December 3, 21.3 million sets were stored on the birth parent surrogate, -1.17% compared to the week; the sales volume of parent surrogate chicken seedlings was 1,475,000 sets, up 8.70% from week to week. According to the transmission of the farming chain, we believe that the subsequent parent inventory may be an inflection point, and we recommend focusing on Yibeng Co., Ltd., Minhe Co., Ltd. Yellow feather chicken: According to New Animal Husbandry Network, on December 6, the national average price of yellow feather chicken was 7.08 yuan/kg, -0.04% from week to week. Various factors, such as the low level of production capacity, may drive the price of yellow chicken up. The cost advantages of leading companies are compounded by price improvements, and profit elasticity is advantageous. It is recommended that Lihua shares be actively paid attention to Lihua shares.

Feed: According to Huiyi.com, on December 15, the spot price of corn was 2,623 yuan/ton, -0.52%; the weekly price of wheat was 2,974 yuan/ton, +0.22%; the spot price of soybean meal was 4,010 yuan/ton, -0.04% weekly. According to Boya Hexun, the spot price of fishmeal on December 15 was 13,360 yuan/ton, -6.11% compared to the previous week. In terms of individual stocks, considering industrial chain management capabilities, R&D capabilities, etc., it is recommended to focus on Haida Group.

Investment advice

The overall valuation of the agricultural sector is in a historically low range. Individual stocks suggest focusing on Muyuan shares, Wenshi shares, Tiankang Biotech, etc. in pig farming; prebiotic shares, Minhe shares, etc. in white feather chicken breeding; Lihua shares in yellow feather chicken breeding; leading genetically modified enterprises in the breeding industry, Longping Hi-Tech, Denghai Seed Industry, etc.; Haida Group in the feed business; Keqian Biology, Zhongzhu shares, Placo, etc. in the pet sector; China shares, Pet, Petty shares in the pet sector.

Risk warning

Risk of livestock and poultry prices falling short of expectations, risk of epidemics, risk of fluctuations in raw material prices, etc.