topnftearninggames| An upward trend in the industry cycle has taken shape! Feng Liu has been in heavy positions for seven consecutive seasons! Wang Yuanyuan's two funds continue to increase positions

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7
2024-05-15
Wen, Liu ZengluRecently, domestic pig prices have continued to rise, breaking through 8 yuan in many areas. Correspondingly, the A-sha...

Wen, Liu Zenglu

Recently, domestic pig prices have continued to rise, breaking through 8 yuan in many areas. Correspondingly, the A-share pork concept stock price has also continued to rise, with Guanghong Holdings' share price rising more than 20% since May (see figure 1), while Zhenghong Technology, Donghui and other companies have all risen more than 10%.

The rise in pig prices, on the one hand, comes from the high prices at the breeding end. At the end of early May, pig prices once fell below 8 yuan, and after breeding profits shrank, the willingness to raise prices gradually increased, superimposed on the greater loss of pig production capacity in the north last winter, so that the number of pigs available for production shrank as a whole, making it more difficult for slaughterers to collect pigs.

On the other hand, the demand side is warming up. At present, pork prices in various parts of the market are not expensive, ordinary pork as a whole is maintained at about 15 yuan, the price of tube bones is about 10 yuan, and the price of exquisite ribs is only about 30 yuan, and with the passage of time, the cured meat, sausage and frozen meat hoarded in residents' homes are almost consumed, and the market demand for fresh meat increases, providing a strong driving force for the rise in pig prices.

Debang Securities believes that pork prices are expected to open up room for rise. From the point of view of the supply side, as of March, the stock of fertile sows decreased for the ninth month in a row, falling below 40 million for the first time since December 2020, and supply de-production continued to advance. If calculated on the basis of 43.9 million heads in December 2022, the range of de-production is up to 9%.Topnftearninggames.07%, if calculated on the basis of the previous peak of 45.64 million in June 2021, the extent of denaturalization is 12.53%.

Taking history as a reference, the last time the stock of fertile sows was removed from a high position to less than 40 million occurred in April 2015. since August 2013, the rate of continuous removal has reached 20.79%, which is about twice as large as that of this round. Pork prices rose 25.62% in the last three months of April 2015, and pork prices rose 46.55% in 12 months. Three months after the removal of supply, pork prices have a potential increase of about 12 percentage points, and pork prices have a potential increase of about 24 percentage points in the next 12 months.

Even if the average wholesale price of pork still fluctuates between 20 yuan / kg and 21 yuan / kg at the current level, considering that the pork price continues to run below 20 yuan / kg from May to July last year, assuming that the average wholesale price of pork continues at 20.5 yuan / kg in the next three months, the average year-on-year increase in the next four months will also be 6.62%, based on the data from November 2014 to now. A year-on-year rise in pork prices can boost CPI growth by 0.018 percentage points, while a 6.62 per cent year-on-year increase in pork prices can boost CPI growth by 0.12 per cent in the next three months, while if pork prices rise 12 per cent in the next three months, the average year-on-year increase could reach about 15 per cent and boost CPI growth by 0.27 per cent in the next three months.

Combined with the performance of listed companies, although pig farming stocks in the first quarter of this year are still mostly at a loss, compared with last year, there has been a significant improvement.

topnftearninggames| An upward trend in the industry cycle has taken shape! Feng Liu has been in heavy positions for seven consecutive seasons! Wang Yuanyuan's two funds continue to increase positions

For example, Shunxin Agriculture, in 2023, the company's net profit lost 296 million yuan, while in the first quarter of this year, the company's net profit successfully reversed its losses, achieving a profit of 451 million yuan, an increase of 37.42 percent over the same period last year. Luoniushan, for example, made a profit of 110 million yuan in the first quarter of this year, an increase of 128.81% over the same period last year, while the company lost 494 million yuan in 2023 (see Table 1).

Brokers are also optimistic about the positive impact of the elimination of pig production capacity on the future of the industry.

Wanlian Securities believes that pig production capacity continues the trend of elimination, and the contraction in pig supply is expected to run through 2024. At present, with the arrival of the peak consumption season such as the Dragon Boat Festival, pig prices are expected to rise quarter by quarter, superimposed by the decline in pig breeding costs, and pig farming profits are expected to increase quarter by quarter.

AVIC Securities said that pig prices have risen steadily recently, and as the supply trend shrinks and the demand season picks up, pig prices are expected to deduce upward, and we can pay attention to the plate catalysis brought about by the higher-than-expected rise in pig prices. The supply of live pigs shrinks periodically, the demand rises seasonally, and the upward trend of the pig cycle has become.

Peng Zu of the Great era of trend Trading said that there is no increase in domestic investment at present, and foreign investors do not dare to attack rashly. AI Technology (the essence of AI is to look at US stocks, look up at US stocks, do not look down) adjust the direction of recovery, and funds return to high dividends (coal, etc.). In addition, the market is not good "pork" to collect, the market is always so advanced.

Combined with the statistics of institutional positions, a number of pig breeding companies have been favored by institutional funds since the beginning of this year. For example, at the end of the first quarter of this year, the number of institutions holding heavy positions in Muyuan and Wen's shares was more than 200.TopnftearninggamesThe number of holding institutions of superstar agriculture and animal husbandry has also exceeded 100; Huatong shares, Tang Renshen and other companies have successively obtained more than 50 institutional products at the same time.

Take superstar agriculture and animal husbandry as an example, in its latest list of the top 10 shareholders, the fourth to tenth all come from public offering funds. And from the point of view of the changes in positions, the two funds continued to increase their positions, and the two funds completed a new heavy position, which was significantly more than the reduction of holdings (see figure 2).

Among the top 10 shareholders of Tang Renshen, eight are from institutions, including not only Morgan's health and quality of life mixed public offering fund, but also "national team" funds such as social security fund 17042 portfolio, basic pension fund 1205 combination and Land Stock Tong Capital Hong Kong Securities Clearing Co., Ltd., two products managed by Wells Fargo consumer theme fund manager Wang Yuanyuan are also among them. And with the exception of the Hong Kong Securities Clearing Company Limited, which has reduced its holdings, other institutions have carried out operations such as increasing their positions or newly entering heavy positions (see figure 3).

Shunxin Agriculture, which involves the concept of liquor and pork at the same time, has long been recognized by Feng Liu, the star fund manager of Gao Yi Asset. Since it first appeared on the company's major shareholder list at the end of the third quarter of 2022, it has been heavily positioned in seven earnings periods and has never been reduced in the process of shareholding (see figure 4).

(the mention of individual stocks in the article is only for example analysis and does not make trading recommendations. )

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