[Editor’s note]
In the past first half of 2022, macro hotspots at home and abroad were frequent, the A-share market was first suppressed and then promoted, the depth of popular tracks was adjusted, and the market style was drastically switched.
In the second half of 2022, how will the capital market be interpreted? On July 4th, The Paper and Wall Street jointly launched the "Road to Economic Market Rejuvenation"-"Chief Wired" 2022 Mid-term Market Outlook series live broadcast, face to face with well-known chief economists and industry analysts, and looked forward to the macro-economy, market trends and industry configuration in the second half of the year.
This issue is a dialogue with Zhao Jinhou, managing director of Shenwan Hongyuan Research Institute, director of consumer goods research department and chief analyst. Zhao Jinhou has been engaged in the analysis of agriculture, forestry, animal husbandry and fishery industries and listed companies for 25 years, and is currently one of the most senior industry analysts in China stock market. Not only is he familiar with the development course and trend of agricultural industry in China, but he is also familiar with the actual situation of various sub-industries and the fundamentals of related listed companies. Zhao Jinhou is the first platinum analyst of New Fortune.
The agricultural sector is expected to continue to rebound in the second half of the year.
Zhao Jinhou said that in the first half of this year, the overall performance of the agricultural sector was good. Driven by the two hot spots of rising international food prices and the pig cycle, the market was good.
"In the second half of the year, what will be the market of the agricultural sector? It is mainly necessary to pay attention to the factors that support the strength of the agricultural sector in the first half of the year, and whether it will change." Zhao jinhou said.
Zhao Jinhou pointed out that the first is food price, which also needs to distinguish between international food price and domestic food price, because the driving factors and logic behind them are not the same. There are many factors affecting international food prices. Among them, from the perspective of supply and demand, it does not support a large-scale and sustained rise, and it should be said that the probability of falling back is greater.
"Domestic food prices are not entirely determined by supply and demand. China’s grain policy has played a very important role in the long-term trend of domestic grain prices. Generally speaking, although domestic food prices will be affected by international prices to some extent in the short term, there will be periodic fluctuations. But the overall trend is still steady and rising. " Zhao jinhou said.
In terms of pig price, Zhao Jinhou said that there is little logical difference between judging pig price and food price, and it is also determined by supply and demand. However, the pig price has increased the game between slaughter and breeding. Because pigs can be pressed and sold in advance. Generally speaking, after moderate consolidation in the future, pig prices will continue to rise, but the pace of increase is uneven.
"In the second half of the year, as the fundamentals of the industry continue to pick up, the industry as a whole is expected to shift from loss to profit, from less profit to more profit. Next, the main concern of the agricultural sector is the recovery of the industry boom. " Zhao jinhou pointed out.
International food prices are affected by many factors such as supply, demand and currency. In the next step, soybean prices are under pressure and wheat prices are still supported.
In terms of international food prices, Zhao Jinhou pointed out that supply, demand, currency and other three elements together constitute the fluctuation system of international food prices.
"Specifically, the international food price is mainly the price of international trade, and the main factors affecting the supply of major producing countries include geographical conflicts in major producing countries, local weather, export restrictions of exporting countries, and international oil prices. Among them, there are two ways in which international oil prices affect food prices. One is to push up the cost of agricultural materials and fertilizers, and the other is to bring about changes in supply. " Zhao jinhou said.
Zhao Jinhou explained that, for example, with the rise of international oil price, the demand for ethanol fuel will increase, and more corn and sugarcane will be used to produce fuel ethanol, and theoretically the supply as food will decrease.
"In terms of demand, the total consumption as a whole increases with the increase of population. Although the global population is currently increasing moderately, from the perspective of international trade, once the price rises, countries will worry about the guarantee of their future grain imports, and they will increase imports and replenish stocks quickly, which will also affect international food prices in stages. " Zhao jinhou further pointed out.
In terms of currency, Zhao Jinhou said that at present, major international agricultural products have futures prices, loose money markets and inflation expectations, and the support of unfavorable weather will push up the futures prices of agricultural products, including grain futures prices, and fluctuations in the futures market will further affect the spot.
"In general, supply, demand, currency and other factors have comprehensively promoted the rise and fall of international food prices. However, the core foundation is the fluctuation of supply and production. " Zhao jinhou stressed.
Looking back, in terms of varieties, Zhao Jinhou believes that the important influencing factor of soybeans is the reduction of production. The decrease of soybean planting area in the United States in the previous year led to the reduction of production, and last year it was mainly caused by drought in South America. This year, the market generally predicts that the planting area will increase. Therefore, if there is no major natural disaster, the supply of soybeans will increase. Therefore, from the perspective of supply, the price of soybeans should go down from a high level.
"In terms of corn, the overall output will increase. In recent years, corn production has not been reduced, and the price is largely pushed up by the rise in oil prices. " Zhao jinhou said.
With regard to wheat, Zhao Jinhou pointed out that the increase in wheat price was mainly caused by overseas geopolitical conflicts, and the stock could not become an effective supply, which led to a decrease in supply in international trade and pushed up the price. At present, although the stocks of relevant countries are expected to be released to a certain extent, the wheat yield will definitely be reduced in the new planting year. Therefore, the price of wheat is still supported.
Domestic food prices have risen steadily.
Regarding domestic food prices, Zhao Jinhou said that the analytical logic of China’s food prices is different from that of international food prices, because China’s food prices are not completely determined by supply and demand.
"China’s grain policy will play a very important role in the medium and long-term trend of overall domestic grain prices." Zhao jinhou pointed out.
Zhao Jinhou said that China’s grain harvest has been achieved for 18 consecutive years, and last year’s grain output was also very sufficient. From the perspective of supply, there is no shortage of food in China, especially rations. Such as wheat and rice, are absolutely safe and well stocked. Therefore, from the perspective of supply, there is no reason for the sharp rise in domestic food prices.
"However, in fact, since 2004, China’s food prices have gone up all the way. On the one hand, there is a continuous bumper harvest, and on the other hand, food prices are constantly rising. The most important factor in this is the government’s price guidance. " Zhao jinhou said.
Zhao Jinhou pointed out that China is now implementing the minimum purchase price for rations. The so-called minimum purchase price means that countries with relevant prices will open their doors and set the bottom line of market prices, which highlights the state’s attention and support for agriculture, rural areas and farmers. At present, China attaches unprecedented importance to food, especially rations.
"At the same time, due to the rising cost of grain planting in recent years, both the cost of land transfer and the cost of labor have led to a decline in farmers’ grain-growing benefits to some extent. Therefore, in order to ensure the planting area of grain and the enthusiasm of farmers, it is necessary to ensure the reasonable profit of grain planting. In addition to subsidies, it also brings the requirement that food prices must be moderately raised. " Zhao jinhou said.
Therefore, next, Zhao Jinhou judged that although domestic food prices may be affected by international food prices in the short term, there will be periodic fluctuations, but the overall trend is still steady and rising.
"It should be pointed out that because the increase in food, especially rations, will have an impact on the living standards of residents, it is impossible to increase substantially, and the increase must be moderate." Zhao jinhou stressed.
Domestic food prices, especially rations, will be relatively independent.
Regarding the synchronization of domestic food prices and international food prices, Zhao Jinhou said that this aspect involves the issue of food import dependence.
"Therefore, from the perspective of rations, I think that domestic prices and international prices will not be synchronized, and domestic rations prices are relatively independent." Zhao jinhou pointed out.
Zhao Jinhou further pointed out that due to the large domestic soybean import and the dominant position of soybean price in the world, the domestic soybean price may be synchronized with the international price.
The increase in food prices is beneficial to the seed sector to a certain extent, and the competitiveness of seed companies with strong scientific research strength is expected to be further moderately improved.
In terms of food security, Zhao Jinhou emphasized that in essence, the food crisis refers to how many people can afford food.
"From the perspective of population and purchasing power, rising food prices have caused more people to be unable to afford food, and then a food crisis has occurred, resulting in more people needing assistance. Therefore, it is the rise in food prices that aggravated the food crisis, not the food crisis that triggered the rise in food prices. " Zhao jinhou pointed out.
In the next step, food prices are generally rising steadily. Therefore, from the perspective of industrial chain, rising food prices are unfriendly to its downstream, including feed food processing, food manufacturing, breeding, etc., and there are problems of rising costs. Unless the relevant costs can be passed on, its profitability will inevitably be compressed to some extent.
"For the seed industry, an important positive logic is the rise in food prices. Because in the A-share market, there are not many related targets for grain planting, and the seed sector is a natural beneficiary. " Zhao jinhou said.
However, Zhao Jinhou also stressed that the benefits of rising food prices to the seed sector still need to be treated dialectically.
"On the one hand, with the increase in food prices, the enthusiasm for grain planting has increased, and the planting area has increased, which has brought about an increase in the demand for seeds. On the other hand, the main business of seed companies in China belongs to outsourcing, that is, the mode is to contract their own land and give farmers corresponding funds per mu for planting. Therefore, in the rising food prices, farmers will have new requirements for income and more expenses. For seed enterprises, the macro demand has increased, but the cost of self-cultivation will also increase. " Zhao jinhou said.
Zhao Jinhou further pointed out that the current GM policy will have a great impact on the pattern of planting industry, especially on the seed sector, which will bring about major changes in the industry.
"At present, genetically modified seeds are mainly divided into two categories, one is insect-resistant and the other is weed-resistant. Insect resistance can save the cost of pesticides and indirectly increase the yield. Herbicide resistance increases weeding efficiency. " Zhao jinhou said.
Zhao Jinhou said that the progress of science and technology has changed the overall production mode and production mode of planting industry. Therefore, in the process of upgrading and changing the seed industry by transgenic technology, the industry concentration will be inclined to the seed companies with more scientific research strength, and their competitiveness and market share are expected to be further moderately improved.
The increase in pig prices is mainly affected by the supply side, and will continue to rise after the next step of moderate finishing.
In terms of pig price, Zhao Jinhou said that the judgment of the pig price cycle is a hot spot of market concern. The biggest influence factor in the field of pig breeding in recent years is African swine fever.
"From the sporadic appearance in November 2008 to the comprehensive divergence in the first half of 2019, it directly led to the subsequent shortage of pork. Subsequently, the industry began to recover quickly. Evolved to last June, the industry began to go to capacity. " Zhao jinhou said.
Zhao Jinhou pointed out that pig breeding and pig prices can be viewed from a more macro perspective.
"First of all, pig prices are the same as food prices, and supply and demand determine the price. Of course, because pigs can be sold in advance as well as on the fence, there is a game of slaughtering and breeding in the evolution of pig prices. " Zhao jinhou said.
Zhao Jinhou pointed out that generally speaking, the fluctuation of pig price is actually the most sensitive to the fluctuation of supply. Specific to this round of fluctuations, on the one hand, with the nationwide spread of African swine fever in 2019, the entire pig production capacity has decreased sharply. On the other hand, with the increase of pig prices, the state took measures to encourage breeding. By June 2021, the stock of fertile sows reached a high level, and the industry began to reduce production capacity.
At present, the rise of pig price is mainly caused by three factors. First of all, it is the supply side. Last year, the effect of reducing the number of sows began to be transmitted. In January this year, the number of piglets began to decrease. Furthermore, the output of commercial pigs has also dropped to a higher level.
"Secondly, it is the sales side. In the first quarter, the amount of live pigs slaughtered was still very high. However, due to the market expectation that the pig price will fall before the Spring Festival, the staged pork supply will be reduced. The superposition of national storage and storage, although not large, further reduces supply. " Zhao jinhou pointed out.
Zhao Jinhou said that in this case, pig breeding enterprises and farmers are optimistic about the short term, and they will be reluctant to sell and press the bar, which will lead to a decrease in supply. Pig price in such a game, there will be a "one price a day."
"Next, whether it is pressing the bar or reluctant to sell, it will always be sold. In the future, as the weather turns cold, the increase in consumption will stimulate the demand for pork, and it will take time for the slaughter to pick up. Therefore, after the current pig price rises ahead of schedule, there may be moderate consolidation in the future. But after finishing, the price will continue to rise upwards. At the same time, under the influence of pressure and reluctance to sell, the rhythm of lifting will be uneven. " Zhao jinhou judged.
Active de-capacity is coming to an end.
In terms of de-capacity, Zhao Jinhou said that the de-capacity logic of the pig breeding sector in May was somewhat lower than expected, mainly due to two factors.
"On the one hand, it is because the investment and financing amount of pig breeding is very large, and the digitalization and intelligence of modern pig farms are very high. The production capacity in this area can not be withdrawn casually like free-range farming. Therefore, these capacity increases will be at least until the end of this year. " Zhao jinhou said.
On the other hand, Zhao Jinhou pointed out that in 2020, domestic imported breeding pigs hit a record high and were put into production. Therefore, from the protection level of piglets, the production capacity is also upgrading.
"After May of this year, the number of fertile sows has no longer declined. It can be said that the initiative of enterprises to go to production capacity is coming to an end." Zhao jinhou said.
The recovery of pig price and the improvement of profit are certain expectations, and the fluctuation range of pig price will be appropriately smooth in the future.
In terms of investment in the pig breeding sector, Zhao Jinhou believes that in the future, it will not be possible to make relevant investments completely according to the logic of the cycle.
"At present, many pig breeding enterprises are doing an extension of the industrial chain, and the terminal is a food company. Therefore, there will be no great isolation in the industrial chain, and the game between them will be less. " Zhao jinhou pointed out.
Zhao Jinhou further pointed out that with the rise of some large pig breeding enterprises, it will be more and more difficult for new companies to enter the leading echelon in the context of increasing industrial capital and technology intensity.
"Therefore, in this round of capitalization and scale-up, after the leap-forward development of pig breeding, the future industry concentration will be further enhanced, and the fluctuation range of pig prices will be appropriately smooth." Zhao jinhou said.
Generally speaking, it is a certain expectation that the pig price in the pig breeding sector will continue to rise and the profit will improve. For the pig breeding sector in 2022, it is optimistic as a whole.
The pet food track has a good prospect but fierce competition, and chicken and eel farming are expected to recover.
In terms of investment, Zhao Jinhou said that this year marks the 30th anniversary of the establishment of Shenwan Hongyuan Research Institute. Thanks to the profound research skills, brand advantages and long-term mutual trust with customers accumulated over the years, it has a securities research service team of over 300 people, covering 900 listed companies at home and abroad.
"In many research fields, Shenwan Hongyuan Research Institute has built a full-cycle talent training system, including a full range of talent development outlines, a comprehensive training curriculum framework, phased training projects, teaching systems, supporting talent development guarantee systems and competition mechanisms, which have consolidated the foundation of team sustainable development and trained many investment and research professionals for the industry." Zhao jinhou said.
As far as the subdivision of agriculture is concerned, Zhao Jinhou pointed out that it is undeniable that pet food has been a good track in the past two years, with huge consumption and market space, but the competition is also fierce.
"At present, there is no absolute leader in the pet food industry. In the future, the industrial foundation is relatively good, and the competitive advantages of related enterprises that have been supported by overseas export business are expected to be further highlighted. The marketing brand built entirely by capital, if there is no follow-up financial support, will have a high probability of clearing out. " Zhao jinhou said.
At the same time, Zhao Jinhou pointed out that chicken prices are expected to recover after a long period of downturn. At the same time, eel farming is also worthy of attention.
"In addition, the promotion of genetically modified seeds and the research and development of new African swine fever vaccines in animal vaccines, which will have major changes in the industry, also contain certain investment opportunities."
Zhao Jinhou (qualification number: A0230511040007) Main viewpoints are based on the report: Focus: Price Rising Drives Performance Growth-Mid-term Investment Strategy of Agriculture, Forestry, Animal Husbandry and Fishery Industry in 2022, June 30, 2022.
