Pig grain ratio even broke the warning, pork prices fell, but stock prices rose

2022-09-10 0 By

The end of the Spring Festival holiday, pork prices are still falling, pork plate has been higher.The pork index rose 3.72 percent to 3,397.69 by the close of Trading on Feb 10, flush data showed.Of the 31 components of the pork sector, 29 stocks rose.Among them, the new Five feng, East Rui shares, superstar agriculture and animal husbandry, Jin Xinnong, zheng Bang technology, proud agricultural biological 6 stocks have won the daily limit, Beijing based wisdom agriculture, tiankang biological, information network, the original stock, Tang Renshen and other 23 stocks pulled up.Industry analysis, the plate is affected by the pig grain ratio into the “second warning range” news.On February 8, the National Development and Reform Commission (NDRC) said that the ratio of pig and grain prices has entered the second-level warning range of excessive decline, and it will work with relevant departments to start the pork reserve collection and storage work according to the situation.On February 10, Zhuo Chuang information analyst Wang Yanan said in an interview with Times Weekly that the pig grain price has entered the second-level warning range of excessive decline, which means that the current pig price has fallen by a large margin, and the breeding end has a relatively common loss phenomenon.Wang yanan analysis, “Except the Spring Festival, most of the hog market is in a state of oversupply, leading to the pig price decline.While corn, soybean meal and other feed raw materials prices rose shock, resulting in a decline in the ratio of pig food prices.”Zhuochuang Information monitoring data shows that since the beginning of 2022, the average market price of foreign three yuan has fallen 20.69%, and the average market price of pork in strips has fallen 14.13%.In addition, since the beginning of January, the main line of profit decline, and in the middle of the loss stage.On February 10, the average profit of self-reproduction and self-cultivation was -314.73 yuan/head, which decreased by 426.50 yuan/head compared with the beginning of January.Wang Yanan believes that the current pig and pork price decline is more obvious, storage in the news on the market has a certain boost effect.Search yong-hui feng pigs chief analyst also pointed to the time weekly press, the National Development and Reform Commission issued the warning, is to give a message to the entire industry, the current pig industry has entered a moderate loss of range, the National Development and Reform Commission will lead to drive around the start of pork purchases to the palm in the market, giving more confidence, avoid excessive pig production capacity.The ratio is the price of hogs to corn, the main feed for hogs.According to relevant regulations in China, the ratio of pig price to corn price is 6 to 1, and pig breeding is basically at the break-even point.The higher the ratio of pig to grain, the better the profit, vice versa.In June 2021, the National Development and Reform Commission and other departments jointly issued the Work Plan for Improving the Government’s Pork Reserve Regulation Mechanism and Ensuring Supply and Price Stability in the Pork Market (hereinafter referred to as the Plan), which respectively set a three-level warning range for excessive decline and excessive rise, and stipulated corresponding reserve responses.The second level warning is issued when the ratio of pig to grain is 5∶1 to 6∶1 for 3 consecutive weeks, or the number of fertile sows decreases by 5% in one month, or the number of fertile sows decreases by 5%-10% in three consecutive months.In July and October of the same year, the National Development and Reform Commission (NDRC) and other relevant authorities launched two rounds of buying and storing 50,000 tons of frozen pork after the ratio of pig grain prices fell into the first-level warning range twice in the past year.After the start of frozen pork collection and storage, the price of live pigs rebounded significantly, and the ratio of pig and grain also rose rapidly after falling below 5:1 for a short time.Although the hog grain ratio has not yet reached the first-level warning range of excessive decline, both analysts said the NDRC is likely to start the first round of pork stockpiling this year.”There is room for the plan. It does not mean that the first level of warning is necessary, and the second level is conditional.”Feng yonghui explained that after the Spring Festival, the consumption slow season has just begun, normally will last three months, pork prices have entered the moderate deficit area, then the government will start the first round of storage.He stressed that in 2021, the whole industry has lost half a year, and currently for the vast majority of pig producers and pig enterprises, the capital chain is extremely fragile, can not withstand another sharp drop in pig prices and a long period of loss.”The longer prices stay too low, the more pig companies have to cut capacity.If there is a collective downsizing, the supply of pigs will be short in the future and the price of pigs will rise.He said.China Chengxin International Corporate Rating Department recently pointed out that under the current background, the capacity expansion of breeding enterprises is slowing down, but the pressure of operating performance and working capital makes the debt scale and financial leverage level of sample enterprises rise rapidly, and it is expected that pig enterprises will still face great debt repayment pressure in the first half of 2022.By the end of the third quarter of 2021, Zhengbang’s asset-liability ratio reached 75.23%, Wind data showed.During the same period, the asset-liability ratios of New Hope, Wen’s and Makihara were 64.83%, 61.67% and 57.77%, respectively.In the middle and late January, Zhengbang Technology was exposed to handle breeding loans in the name of employees, and the company’s capital chain was suspected to be at risk of fracture.Subsequently zhengbang technology emergency refuted rumors, but still in the year of the tiger opened two trading days before the daily limit.’If pork prices don’t bottom out after the first round of buying, there may be a second or third round of buying,’ Mr. Fung said.”It depends on price changes or losses in the hog market.”He said.In his view, the first round is likely to be a trial acquisition based on previous reserves, “not expected to be very large, or in the 10,000 to 20,000 tons range.”Production capacity accelerated clearing, pig cycle turning point will be 2021 pig industry collective winter, according to open source Securities statistics, as of January 28, 2022, 18 major pig breeding listed enterprises have announced 2021 annual performance forecast,In 2021, the total loss of listed pig breeding enterprises was 41.758 billion yuan (according to the performance forecast center).For the full year of 2021, only five companies made a profit and 13 recorded losses.Among them, the head of pig enterprises in the loss of the amount of billions to billions.The disclosed performance forecast shows that in 2021, New Hope is expected to suffer a net loss of 8.6 billion ~ 9.6 billion yuan, Wen’s shares are expected to suffer a loss of 13 billion ~ 13.8 billion yuan, Zhengbang Technology is expected to suffer a loss of 18.2 billion ~ 19.7 billion yuan.”Pig grass” stock although not pre – loss, but net profit also declined 70%.A number of brokers pointed out that the current layout of the pig plate is the best stage.In this regard, Feng Yonghui told times Weekly, “The investment logic of the capital market is not measured according to the current revenue and operation of enterprises.There is a point of view called expectation, expectation will be good, to buy now.””Such a loss in the pig market so early after the Spring Festival means that pig producers and pig companies are under great pressure to cut overcapacity. The government is also collecting reserves to prevent excessive overcapacity reduction.”Feng Yonghui analysis, “investors actually hope that the head listed pig enterprises can in the context of the entire industry to reduce capacity, maintain their own capacity, or do not appear capital fracture.In this way, when the industry’s capacity reduction is over, the head pigs can enjoy the dividend of excess capacity clearing, which is the ‘good expectations’ mentioned above.”‘The more companies are losing money now, the more capacity will be cut across the industry,’ Mr. Feng said.At the same time, unlisted pig producers, affected by losses, are more likely to exit the market.”When competitors quit and are eliminated, the remaining enterprises will naturally face more market cake in the future, which will lead to better market expectations and higher valuations for listed pig companies.Sealand securities also point out that prices are in W at the end of the second dip process, the current overall prices downward space is very limited, short-term farmers market rhythm change and other factors will affect the prices volatility, even with periodic rebound, but as long as it is loss, living off at last, at present is still in very good configuration window,After each month can breed sow decline will be the catalyst of the pig plate.According to the Statistics of the Ministry of Agriculture and Rural Affairs, the number of breeding sows in China dropped to 43.29 million in December, equivalent to 105.6 percent of the normal population, down 2.9 percent from the previous month, after reaching the annual peak of 45.64 million in June 2021.Feng Yonghui told The Times weekly reporter, can breed sow stock high and pig supply inflection point, 10 ~ 13 months apart.The turning point of the pig cycle can be judged from the data of fertile sows collected by the Ministry of Agriculture and Rural Affairs.According to this calculation, April to July this year will be the turning point of the pig cycle.Guotai Junan research report also pointed out that the price inflection point of this pig cycle is expected to be between April and June 2022.In the first quarter of low pig prices, pig capacity is expected to accelerate.However, some analysts believe that the recent pig production capacity has slowed down significantly, capacity removal or shelving, long term pig price cyclical inflection point or still need to wait.