Wholesale pork prices fell month on month! Individual stocks fell sharply, and the capital started to ship

 Wholesale pork prices fell month on month! Individual stocks fell sharply, and the capital started to ship

According to the monitoring of the national agricultural products wholesale market price information system of the Ministry of agriculture and rural areas, from November 8 to November 14, the wholesale price of pork was 49.84 yuan / kg, down 4.4% month on month. In addition, the wholesale prices of beef and mutton were 69.69 yuan / kg and 67.92 yuan / kg respectively, with a slight decrease of 0.1% and 0.4% on a month on month basis; the wholesale prices of eggs were 11.51 yuan / kg, with a decrease of 5% on a month basis.

Affected by the news, todays pork concept stocks fell sharply, and the concept index fell by more than 3% in volume at one time, trading volume in the morning was close to yesterdays full day trading volume. Recently, the pork concept leader with 5 consecutive trading limits (yesterdays trading limit was not closed) fell by more than 9% today. In September and October, the Zhenjing shares, which had 10 trading limits, fell for a time, while Lihua shares, Tiankang biology, LUONIUSHAN, etc. fell the most.

Multiple measures to stabilize the price of pigs

Chinas pork consumption accounts for about half of the worlds total. With the tight supply of pork, on the one hand, China has issued policy support to increase pig breeding.

Recently, the Symposium of experts and entrepreneurs on economic situation chaired by Premier Li Keqiang mentioned the pork issue again. At the symposium, the person in charge of Wynns food, a large breeding company, also made a statement. At this time node, pig farmers are invited to participate in the forum with profound intention.

Today, the website of the national development and Reform Commission announced that in order to analyze the production and marketing price situation of the pig market in depth and do a better job of ensuring supply and price stability in the later stage of the pig market, the price department of the national development and Reform Commission sent a research team to Wangcang County, Sichuan Province, and Pengshui Miao and Tujia Autonomous County, Chongqing city to carry out special research, and listened to the opinions of all parties through field research and holding a symposium See and suggestions.

With the gradual implementation of many policies, the pig breeding environment has undergone positive changes. Yesterday, Liu Aihua, spokesman of the National Bureau of statistics, said at the press conference of the State Councils new office that governments at all levels had recently taken various measures to increase the supply of pork, launched the mechanism of linkage between social assistance and security standards and price rise in a timely manner, and increased living subsidies for people in need. With the implementation of relevant policies and measures, pig production capacity will gradually recover and pork prices will gradually stabilize.

The monitoring of the Ministry of agriculture and rural areas shows that at present, the decline range of pig stocks in China has been significantly narrowed, and that of sows that can be bred has risen from the previous decline. In August, the decline rate of breeding sows was 9.1%, in September, it was 2.8%, and in October, it was 0.6%. According to this trend, the production capacity of pigs before the end of the year is expected to reach a bottom recovery, the market supply will gradually increase, and it is expected to basically return to normal level next year.

On the other hand, China is actively expanding pork imports to make up for the lack of domestic supply. China imported nearly 162000 tons of pork in September, up 71.6% year-on-year, with an amount of more than 2.5 billion yuan, more than 2.5 times that of the same period last year, according to the General Administration of customs. In the first three quarters, China imported about 1.326 million tons of pork, a year-on-year increase of 43.6%, with an amount of more than 18.3 billion yuan, a year-on-year increase of 74.6%.

In 2018, there are 21 countries with pork export qualification to China, including Germany, Brazil, the United States, Denmark, etc. This year, Chinas pork importing countries have increased Kazakhstan in Central Asia and Argentina in South America.

According to the information of the General Administration of customs, nine new Italian pork enterprises have exported frozen pork products that meet Chinas requirements from August 20, 2019 and later to China. A Lithuanian meat processing enterprise meets Chinas import standards and has recently been officially listed as one of the foreign enterprises authorized to export frozen beef to China.

Listed companies actively expand pig breeding

Relevant listed companies also actively respond to the call of the government to expand production scale and increase market supply.

On November 14, comdale (000048) announced that it had signed the investment framework agreement for the 600000 pigs industrial chain project launched annually by comdale and Meizhou Municipal Bureau of agriculture and rural areas of Guangdong Province, with a total investment amount of about 1.5 billion yuan.

On November 11, aonong Biology (603363), which started with feed business, also announced that it planned to invest 37.2 million yuan to establish Jian Aoyuan breeding Co., Ltd. as the lessee of the new pig farm under the lease intent agreement, to carry out pig breeding, sales and other businesses. Since the end of October, the company has announced that it will invest 80 million yuan to establish Binzhou aonong Modern Agricultural Development Co., Ltd., and increase 52 million yuan to Jiande Xinxin pig breeding Co., Ltd.

As early as June this year, tianbang (002124) announced that it planned to cooperate with Zhejiang agricultural development group to build an industrial base of 5 million pigs in five years. In August this year, muyuan Co., Ltd. (002714) announced that it plans to invest 120 million yuan to set up subsidiaries in six famous breeding counties, each with a registered capital of 20 million yuan, which are used in animal husbandry, sales and other businesses. In the same month, Tang Renshen (002567) also announced that it planned to invest 300 million yuan to set up a pig green breeding project in Lufeng County, which will produce 150000 pigs annually after the production. The company has set up pig breeding projects with several counties this year, with a cumulative capacity of 1 million.

Beishang capital shipping pork stock

In a number of measures taken at the same time, the momentum of the sharp rise in pork prices has finally been curbed, and the market smell sensitive funds began to loose their holdings of pork concept stocks.

In the first three quarters, the companys revenue was 48.308 billion yuan, a year-on-year increase of 18.29%; its net profit was 6.085 billion yuan, a year-on-year increase of 109.84%, of which the net profit in the third quarter was 4.702 billion yuan, a year-on-year increase of 137.17%. But this is such a good performance. This week, Beishang capital sold more than 1 million shares of Wynns shares in a small way, with the shares withdrawn to 160 million shares from the historical peak of 161 million shares. By the end of this afternoon, Wynns shares had closed at 2.92%, which was the sixth days closing line of Wynns shares.

Not all pig breeding enterprises benefit from the rise of pork price. When the price of pork is soaring, xinwufeng lost 41.74 million yuan in the first three quarters instead of making money. Since the end of last year to the beginning of the year, xinwufeng has increased more than five times. With the overvalued share price, the loss in the third quarter report and the trend of peaking pork price, Beishang capital has recently reduced its holdings of xinwufeng from nearly empty positions, from more than 9 million shares to a minimum of less than 620000 shares. As of todays midday close, xinwufeng fell 4.07%, which is the sixth consecutive trading day of xinwufengs decline, from the highest point of 16.5 yuan to todays midday close of 8.01 yuan, with its share price cut by more than half.

Recently, pork concept stocks such as Tiankang biology, Longda meat, tianbang stock and muyuan stock have been greatly reduced by Beijing capital.

Institutional view

Ping An Securities said that the current rise in pork prices far exceeds the fundamentals of pork, and with pork prices reaching a high of 50 yuan per kilogram in the near future, the impact of prices on demand is further revealed. It is believed that pork prices will continue to rise in the future, but there is limited space.

Guokai securities expects that pork prices will remain high in the first half of 2020, with a high probability of CPI breaking 4 and 5 in the short term in 2019. Although the main contribution of boosting CPI at present comes from pork, we need to be alert to the spread and strengthening of inflation expectations. In the short term, monetary policy may be relaxed but there is limited space.

Huatai Securities expects that from November 2019 to January 2020, the high price of pig is expected to exceed 50 yuan / kg, and it is estimated that pork will increase CPI by 4.51%. Due to the sharp decline in production capacity, the CPI pressure caused by pork will last until June next year. The high price of pigs, combined with annual consumption, and other meat protein prices driven by pork will shape the year-end price hike and put pressure on CPI. At the present time, it is suggested to fully grasp the main line of the price increase; the pig and chicken breeding industry is expected to fully release profits.

According to new era securities, the rise of pork price has led to the rise of other food and catering prices, which will increase the cost of living of residents. Historically, this situation is often accompanied by monetary policy tightening, but this cycle is not the same. The growth rate of CPI and core CPI is extremely divided, which shows that demand is still weak, which means that the price rise is mainly caused by supply factors, even if the policy is tightened It cant change the fact that there will be a shortage of pork in the future. In view of the rising price of pork, the main way to deal with it is to increase the supply. However, as food still accounts for a large proportion of residents consumption, monetary policy will be more neutral if price increases remain high for a long time.