If the price of meat is rising, which listed company will benefit the most?

category:Finance
 If the price of meat is rising, which listed company will benefit the most?


Industry researchers have expressed similar views:

According to Chen Qi of China-Thailand Securities, there is no doubt that the pig price will remain high in the fourth quarter of 2019 and 2020 in terms of the current capacity degrading rate.

Tianfeng securities Wu Li believes that the high price of pigs is expected to last until 2021. In the future, the national pig price is expected to continue to exceed expectations. In 2020, the average price of pig slaughtered will exceed 25 yuan / kg, and the average profit of the pig is expected to reach or even exceed 1000-1500 yuan.

Wanlian Securities Chen Wen: There is no effective way to fill the gap in the short term. It is expected to rise to the second half of next year. Next year will be the year in which pig production and price will rise simultaneously, and pig farming enterprises will make the biggest profits.

...

How does the rise in pork prices affect listed companies?

If the rising pork price is a clear card, which listed company will benefit the most?

We have compiled the data of A-share listed companies which have published the August 2019 sales bulletin, and we may find some clues.

From the August sales briefing released by listed companies, we can see that while pork prices are rising, some companies still record growth in pig sales.

Ruxin hopes to sell 3543,000 live pigs in August, up 78% year-on-year and 13% annually. In August, there were also increases in Jinxin and Aoyong biology compared with the same period in the same period of last year and in the same period in the same period in the same period.

Nevertheless, there are companies that have seen their pig sales decline year-on-year and year-on-year, while sales are also declining.

For example, in August, the sales of Wens shares of large pig farmers were 1.1373 million, down 42.68% and 34.35% year-on-year, while the sales revenue fell 14.62% and 13.11% year-on-year, respectively.

As for the rise in meat prices, the listed companies obviously expected that many companies adjusted the pace of sales and launched the big pig plan to postpone the sale of live pigs or increase the intensity of pig keeping.

For example, Wens stock said in a briefing that in August 2019, the sales of meat and pig products decreased, compared with that of the same period last year. There were two reasons for it: to choose the best sow as a provenance for the purpose of ensuring the late production plan; to increase the supply of pigs, the company adopted the strategy of raising pigs, raised the single head weight and adjusted the commercial meat. Pig sales rhythm.

In a briefing, Da Bei Nong also had a similar statement: because of the pig price up, the company delayed the slaughter, and some of the finishing pigs were postponed to the market in September. The company adjusted the mating plan and increased the proportion of sows remaining.

From the above statements, it is not difficult to see that some listed companies, out of the expectation of future meat price rise, have the intention of keeping green hills, not afraid of no firewood.

Chen Qi and others of China-Thailand Securities believe that the expansion speed and epidemic prevention and control level of head enterprises are obviously better than the industry average, and companies with proper epidemic prevention and control can obtain excess profits by excess number of listed companies. At the present stage, the key to investment is to find the target of restoring capacity and increasing market share in the future. Short-term listing volume is only a disturbing factor, not the key to investment. According to estimates, it is expected that the performance of Wens, Muyuans and Zhengbangs three enterprises will reach 400/234/92 billion yuan in 2020, and there is still room for doubling the current valuation level. Short-term monthly market volume is an important factor to disturb market sentiment. The most pessimistic time in the market is a good opportunity for investment. It is suggested that positive attention be paid.

Tianfeng Securities Agriculture, Forestry, Animal Husbandry and Fishery Team believes that in the next 2-3 years, the profitability cycle of the pig sector superimposed on the top listed companies, is a wave-length period of rising volume and profit. At present, the pig-raising sector still has strong allocation value, focusing on recommending Zhengbang Science and Technology, Tianbang Stock, Tang Renshen, Zhongliang Meat and Food, Wens Stock, Muyuan Stock, New Hope, Wanzhou International and so on.

Xingye securities, agriculture, forestry, animal husbandry and fishery team believes that pig production capacity has not yet stabilized, and pork prices will continue to be high in the second half to next year.

CITIC Securities Agriculture, Forestry, Animal Husbandry and Fishery Team gave the following investment proposals: Wens shares, Muyuan shares, Zhengbang Science and Technology (Pig Faucet: Pig Production Capacity Recovery, Cost Control Effective); Shengnong Development, Probiotic Shares, Hefeng Animal Husbandry, etc. (Continuous high prosperity of the industry); Zhongmu shares, Biological Shares, Placo, etc. (non-governmental) Plague vaccine boost, left time point; Haida Group, etc. (core competitiveness of aquatic feed).

However, judging from the share price, most of the pig raising listed companies have already had a large increase, which has already reflected the expected rise in pig prices to a certain extent. There may still be great uncertainties in the subsequent rise in stock prices of related companies.

According to the market data, the Wind pig industry index (Note: the index mainly includes pig breeding, pig breeding, pig slaughtering and pork sales, pig feed and other companies stock targets) increased by 79.20% during the year, and the index is now double the last years low.

Can policy power brake pork prices?

In support of the construction of large-scale pig farms, the General Office of the State Development and Reform Commission and the General Office of the Ministry of Agriculture and Rural Affairs recently jointly issued a circular on the investment arrangement within the central budget for stabilizing pig production. For the newly-built and expanded pig farms, large-scale pig farms (households) and pig farms in prohibited areas by the end of 2020, the circular was issued. In principle, the proportion of central subsidy should not exceed 30% of the total investment of the project, with a minimum of not less than 500,000 yuan and a maximum of not more than 5 million yuan.

The Ministry of Transport has recently issued a circular to resume the implementation of the green passage policy for the transportation of fresh agricultural products on vehicles legally transporting piglets and chilled pork from September 1, 2019. Meanwhile, during the period from September 1, 2019 to June 30, 2020, vehicle tolls will be exempted for vehicles legally transporting breeding pigs and frozen pork.

However, according to the research view of Deutsche Bond Securities, short-term capacity cannot be increased with the introduction of intensive policies.

The agency pointed out that pig prices remained rising last week, reaching 27.3 yuan/kg nationwide. In the past two weeks, the pig policy has been introduced intensively. The more important policies at the national level include abolishing the over-zoned prohibited breeding areas, abolishing land approval (which still needs environmental assessment), abolishing the restriction of 15 mu of farming land, restoring the green passage for piglets and cold meat, and increasing the insurance coverage for live pigs (sows to 1500 yuan, fattening pigs). Increase to 800 yuan and improve the way of funding for killing subsidy.

Debang Securities pointed out that during the Blue Ear Disease epidemic in 2007, after the government introduced policies such as pig insurance, loan discount and improved breed subsidy, the production capacity recovered rapidly, and in 2008, the market volume increased year-on-year. Debang Securities believed that the recovery rate of production capacity would be significantly slower than in 2007. First, the reduction of pigs is about twice that of 2007, and the population recovery is slower. Second, it is very difficult for retail households to re-breed, and epidemic prevention is more difficult. Third, the restriction of transfer slows down the speed of putting into operation of new factories. In addition, the main form of price limit is to subsidize terminal low-price sales, which has limited impact on the selling price of live pigs. The pig market is a fully competitive market. Debon Securities believes that the probability of direct price restriction of live pigs by the state is small. The research view of Soochow Securities believes that policy regulation will affect market supply or slow down the pressure of pig prices in the short run, but the gap between supply and demand will widen under the arrival of the peak season of consumption, and it is still difficult to change the rising trend of pork prices. Source: Liable Editor of Securities Times: Liu Song_NBJ9949

Debang Securities pointed out that during the Blue Ear Disease epidemic in 2007, after the government introduced policies such as pig insurance, loan discount and improved breed subsidy, the production capacity recovered rapidly, and in 2008, the market volume increased year-on-year. Debang Securities believed that the recovery rate of production capacity would be significantly slower than in 2007. First, the reduction of pigs is about twice that of 2007, and the population recovery is slower. Second, it is very difficult for retail households to re-breed, and epidemic prevention is more difficult. Third, the restriction of transfer slows down the speed of putting into operation of new factories. In addition, the main form of price limit is to subsidize terminal low-price sales, which has limited impact on the selling price of live pigs. The pig market is a fully competitive market. Debon Securities believes that the probability of direct price restriction of live pigs by the state is small.

The research view of Soochow Securities believes that policy regulation will affect market supply or slow down the pressure of pig prices in the short run, but the gap between supply and demand will widen under the arrival of the peak season of consumption, and it is still difficult to change the rising trend of pork prices.