Currently, the costs of participants in the pig breeding industry are clearly divided. The financial pressure and operational difficulty of the pig breeding industry may increase, and the pace of voluntary production removal will accelerate in the future, and the cycle is gradually becoming clear.
The Zhitong Finance App learned that Guosheng Securities released a research report saying that the continued weakening of production capacity is increasing supply pressure in the first half of this year, and the Spring Festival is often a low season for pork consumption, and pig price performance may be unspeakably optimistic. At the same time, the current cost differentiation of industry participants is obvious, the financial pressure and operational difficulty of the pig breeding industry are increasing, and the cycle is gradually becoming clear. It is recommended to pay attention to allocation opportunities in the pig breeding sector, and focus on Makiyuan Shares (002714.SZ) and Wen's Shares (3008.49SZ), Superstar Agriculture and Animal Husbandry (603477.SH) , Huatong Co., Ltd. (002840.SZ), Tang Renshen (002567.SZ), Jingji Zhinong (000048.SZ), New Hope (000876.SZ), etc.
Guosheng Securities's views are as follows:
The number of releases increased sequentially in December 2023.
The December 2023 sales reports of 18 listed pig breeding companies have been disclosed. The total sales volume in December 2023 was 158.68 million heads, up 21.8% year on year, up 21.8% year on year, up 15.04% month on month; cumulative sales volume from January to December 2023 reached 153.180 million heads, up 17.0% year on year; Huatong Co., Ltd. and Tang Renshen had high cumulative year-on-year growth rates, reaching 91.1% and 72.0% respectively.
Pig prices fell month-on-month in December 2023, and the average weight of white-striped pork in the industry dropped slightly month-on-month after slaughter.
In December 2023, we estimated that the weight of commercial pigs sold by Makihara Co., Ltd. and Wen's Co., Ltd. was 116.54 and 113.35 kg, respectively, -3.9% and -6.2% month-on-month; in December 2023, the average weight of white striped pork in 16 provinces and cities after slaughter was 91.1 kg, a slight decrease of 0.01% compared with November. In terms of price, the vast majority of companies' commercial pigs are in the 13 to 14 yuan/kg range. The highest price is 16.18 yuan/kg for Dongrui Co., Ltd., and the lowest price is*ST Zhengbang 12.69 yuan/kg. The price situation in the industry is basically consistent with the performance of listed companies. In December, the average price of pigs nationwide was 14.33 yuan/kg, down 2.2% from the previous month.
There was a rebound in pig prices before the holiday season, and inventory and consumption are still being suppressed.
According to Boya Hexun, the average price of pigs nationwide was 14.24 yuan/kg on January 22, 2024, up 4.7% from last week. In terms of profit, according to Boya Hexun, in the 3rd week of January 2024, the average profit of self-raised head reached -274.7 yuan/head, an increase of 68.3 yuan/head compared to the previous month; the average profit of purchased piglets was 204.8 yuan/head, an increase of 35.1 yuan/head compared to the previous month. Since January, pig prices have shown a trend of falling first and then rising. The lowest price once fell below the 13.5 yuan/kg line. After the sharp drop, the market was clearly bullish. On the one hand, there was a shortage of big pigs in the early market, and there was a shortage of large pigs in some provinces, as shown by the recent widening of the standard fertilizer price spread. According to Steel Union data, the price difference of standard fertilizer was -0.3 yuan/kg on January 17, 2024, an increase of 0.15 yuan/kg over the negative value last week; on the other hand, while the price of pigs fell in the early stages, feed prices also declined due to falling prices in the raw materials market, which led to an increase in enthusiasm to enter the market. However, considering school vacations before the Spring Festival and the return of overseas workers to their hometowns one after another, the margin of consumption of group meals decreased; at the same time, in order to avoid low prices after the holiday season, the pace of supply before the Spring Festival was still mainly about cash out, compounded by higher frozen product inventory levels. It is expected that pig prices will still operate weakly around the Spring Festival.
The number of breeding sows continued to decline in December 2023.
In December 2023, Association, Yongyi, Zhuochuang, and Steel Union all declined month-on-month. The amplitudes were -2.1%, -0.8%, -1.9%, and -2.1%, respectively. Apart from the narrowing of 0.7 pct, the decline in energy growth of the rest of the samples increased month-on-month. The impact of swine disease was mitigated in December, and the continued decline in energy growth was reflected in an increase in active elimination by farmers in the context of low prices. Judging from current pig price performance and future supply expectations, it is expected that weak pig prices may continue for a long time, capacity removal is expected to continue, and there is a possibility that the decline will expand further.
Risk warning: pig price fluctuation risk, epidemic risk, consumer demand risk, etc.