Pig ETF comes, but its not in time?

category:Finance
 Pig ETF comes, but its not in time?


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.

The national development and Reform Commissions press conference in June also pointed out that up to now, the price of pork in 36 large and medium-sized cities, supermarkets and markets has declined by more than 20% compared with the peak in mid February. Under the situation that the number of sows that can be bred, the number of live pigs has been rising continuously, and the number of new piglets has been increasing for many months in a row, it is expected that the price of pork in the second half of this year will keep a steady decline.

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?

Profiteering period

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.

Last year, the pig industry ushered in a high light moment, and became the outlet of capital chase. The reporter combed the annual reports of relevant enterprises and learned that the net profit of muyuan in 2019 attributable to shareholders of listed companies reached 6.114 billion yuan, an increase of 1075.37% year on year; the net profit of Wenshi was 13.967 billion yuan, an increase of 252.94% year on year; the net profit of new hope was 5.042 billion yuan, an increase of 195.78% year on year. According to wind data, the shares of the listed companies rose 209.10%, 30.99% and 174.42% respectively last year.

Last year was a high point for farming profits. Li Jing, an analyst with Zhuo Chuang information, told the economic observer that the main reason behind last years high profits was the result of resonance in many aspects. On the one hand, the number of pigs is relatively large, on the other hand, the price reached a historical high last year, in addition, there are low-cost assistance. In terms of volume and price, it is better than this year. From the cost point of view, according to the profit of self breeding, the cost of piglets was relatively low last year, so the profit in the second half of the year witnessed a peak.

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.

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.

However, Li Jing believes that it is difficult to reach the level of last year without considering the impact of the outbreak and new national policies. In fact, at the end of last year, breeding profits were in a period of huge profits. According to Li Jing, last years breeding profits showed the characteristics of low before and high after, and this years is high before and low after. Last years high lasted for three months, while the low loss month lasted for nine months. The month of this years high is expected to last for 8 months, and the low may last for 2-3 months, but it cant reach the loss. But considering that this years high cannot be called a high point, there is a gap with last year. Therefore, Li Jing believes that the profit level of pig enterprises this year may be similar to that of last year, but it may be a little lower than last year.

Falling trend

On June 16, at the June press conference of the national development and Reform Commission, Meng Wei, deputy director of the policy research office and spokesman of the national development and Reform Commission, said that up to now, the price of pork in 36 large and medium-sized cities, supermarkets and markets has declined by more than 20% compared with the peak in mid February, with a significant decline. In the second half of this year, pork prices are expected to keep a steady decline, and may fluctuate with seasonal and festival demand changes.

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.

How long will the pig cycle last and how will the pig market evolve in the future? Li Jing believes that there are many factors influencing the price of pigs this year, and further observation is needed. But under normal circumstances, the trend will not be much adjusted. She noted that the rainy season last year hit the breeding market in the south, resulting in a significant reduction in production capacity. Until June this year, the plum rainy season in the middle and lower reaches of the Yangtze River has not passed. If we can ensure that the current batch of pigs can survive this rainy season smoothly, then the overall downward trend of pig prices this year will continue until the end of the year or even next year, will be in a low downward period. The market situation in the past two years is a little special. In fact, many data are not available in previous years. We cant learn from any one year. Li Jing said, first of all, this years overall policy factors have a great impact, mainly reflected in the large amount of frozen pork put into the national reserve, which is significantly higher than in previous years; in addition, the density of pig breeding has indeed increased now. If there is no outbreak of large-scale African swine fever like last year in the summer of June August this year, and to ensure that the current batch of pigs can be fattened smoothly, the trend of pig price is downward. In addition, by the end of the year, only a part of the capacity will be released, and a large number of capacity will continue to be released next year. Because the production capacity of our stockbreeding is not only reflected in the fattening piglets, but also part of them can breed sows or even reserve sows, so by next year, if the epidemic situation is not considered, the overall production capacity will still be in the release period by next year.

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.

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

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.