However, this kind of market boom period is changing, and the high profit of pig breeding may be difficult to continue. In fact, the pig price market has entered a downward cycle this year. In the second half of the year or even next year, the profitability of pig breeding enterprises will go down without any other supply side risks, the industry insiders said in an interview with the economic observer. Make up the price with quantity, seize the market share, and become the chips of pig raising enterprises.
Pig price bid farewell to boom stage, and is the buyers agency not in time to intervene at this time? In the second half of the pig enterprise battle, can we still compose the story on the tuyere this year?
According to the official website of China Securities Index company, the stock of listed companies involved in animal feed, animal medicine and animal husbandry is selected from A-share of Shanghai and Shenzhen Stock Exchange as sample stock to reflect the overall performance of the stock of listed companies related to animal husbandry. The top ten heavyweights include Haida group (002311), muyuan (002714), new hope (000876), Wenshi (300498) and other leading listed companies in the aquaculture industry.
The profit-seeking nature of capital makes the buyers organization aim at the pig industry, but the establishment of animal husbandry fund is the first time. Guotai fund became the first person to eat crabs.
We dont like to go too crowded, and we want to stick to our unique attributes and genes and do what we believe is valuable. Liang Xing, quantitative investment director of Cathay Pacific Fund, once said this in an interview with the media, which seems to show the consideration behind the declaration of this fund. A little special and a new way are the impression of many people in the industry on the ETF product line of Cathay Pacific Fund. However, the investment value shown by the pig industry last year has undoubtedly inspired the enthusiasm of the buyer organization.
Why did Guotai fund declare Guotai animal husbandry fund at this time? In the view of Liu Min, an analyst at Debang securities, this is also related to the current hot consumer demand. Because of the outbreak, the economic outlook is uncertain, he said. Relatively speaking, the certainty of the required consumption is higher, and it can be configured at ease. Whats more, unlike the past few pig cycles, buyers dont have to worry about a rapid decline in performance at the end of the cycle. Liu Min believes that the boom time of the pig cycle is expected to last more than one year.
Zhuo Chuang monitoring data shows that in the first half of 2019, the average profit of self bred and self raised pigs was 93.72 yuan / head, and in the second half of 2019, it began to rise from the middle of July, and the highest point rose to 3155.93 yuan / head. In the first half of 2020, the average is 2317.11 yuan / head.
It is worth noting that, according to Zhuo Chuang information monitoring, since June, domestic pig prices have been rising slowly. As of June 16, the average price of foreign three yuan was 33.78 yuan / kg, up 7.28 yuan / kg or 27.47% from the lowest point on May 15.
In Li Jings view, at present, pig prices are only in a short and small period of fluctuating rise in the declining cycle. In fact, the price of pig has been in a big decline cycle after, but it also follows a quarter cycle of that year. It belongs to the second quarter of the quarter, when the market of commodity pig is low and the capacity has not reached the stage of effective release.
Make up the price by quantity
In the first half of the year, according to the pig sales situation and the annual sales plan of each listed company, the second half of the year will usher in the stage of concentrated and large-scale production. In the downward cycle of pig price, it will become a bargaining chip for each company to seize the market share by making up price with quantity.
From the perspective of marketing plan, the sales target given in the 2019 annual report of muyuan Co., Ltd. in 2020, the company plans to market 17.5 million to 20 million pigs. According to the statement of guaranteed positive growth in 2020 of Wynn, and based on the forecast of 18.52 million listed companies at the end of 2019, the total number of Listed Companies in 2020 will be kept at 20 million. The total sales volume of the two companies in the first five months of this year is 5.258 million and 4.0174 million respectively. According to this calculation, the second half of this year is bound to be large.
According to Li Jing, it is very difficult for pig prices to reach last years high this year, and for pig profits to reach last years level. In this case, if the pig enterprises want to make profits as a whole, they can only increase their market share by a large amount. But she said, there is no guarantee that the profit in the later period can be positive, because the pig market as a whole this year belongs to the high-cost supplement column, and it may be low price in the later period.
Guotai animal husbandry fund may catch up with the second half of the pig industry cycle. Liu Min is relatively optimistic. Now its in the process of pig price depression. If there is no new accident, the pork highlight market will not appear in this cycle. However, due to the impact of the new crown epidemic, the duration of this round of pig cycle has been lengthened. This downhill process will be longer than the previous cycle and is expected to last until next year. He said that according to the current capacity recovery situation, the pork supply will usher in a turning point in September. The premise of price compensation by quantity is that the capacity recovery speed of small and medium-sized retail investors (small farms) is slower than that of leading enterprises, and then the price slope is lower than the capacity slope. As a matter of fact, the capacity recovery of the head listed companies is indeed faster than the overall recovery of the industry, so there will still be a large amount of pay as you go dividend. Source: Yang Qian, editor in charge of Economic Observer_ NF4425
He said that according to the current capacity recovery situation, the pork supply will usher in a turning point in September. The premise of price compensation by quantity is that the capacity recovery speed of small and medium-sized retail investors (small farms) is slower than that of leading enterprises, and then the price slope is lower than the capacity slope. As a matter of fact, the capacity recovery of the head listed companies is indeed faster than the overall recovery of the industry, so there will still be a large amount of pay as you go dividend.