In the context of the continued tight supply of live pigs and the high price of pigs, many pig companies performed gratifyingly in the first half of the year.

Wind data shows that among the 25 listed companies involved in the pig industry, 16 companies have doubled their operating income and net profit in the first half of the year, and more than half of the companies have doubled their net profit. Among them, Muyuan shares (002714), Zhengbang Technology (002157), Luo Niushan (000735) and Tianbang shares (002124) turned losses compared with the same period last year, and only Zhenjing shares (603477) suffered losses in the first half of the year.

Specifically, New Hope (000876), Shuanghui Development (000895), Wen's Co., Ltd. (300498), Muyuan Co., Ltd. and Zhengbang Technology ranked among the top five listed pig companies in revenue in the first half of the year, with 44.696 billion yuan and 36.348 billion yuan respectively. , 35.957 billion yuan, 21.033 billion yuan and 16.551 billion yuan, year-on-year growth rates were 18.8%, 23.74%, 27.75%, 51% and 10.88%.

In terms of profitability, Muyuan shares maintained a leading position among listed pig companies with a net profit of 10.784 billion yuan, an increase of 7026% over the same period last year. Wen's shares, New Hope, Shuanghui Development and Zhengbang shares ranked next, with net profits of 4.153 billion yuan, 3.164 billion yuan, and 3.041 billion yuan in the first half of the year, representing a year-on-year increase of 200.3%, 102.6%, 26.7% and respectively. 979.2%

Regarding the substantial growth in performance, Muyuan said that due to the continuing impact of the African swine fever epidemic, the supply situation in the live pig market during the reporting period was tight, and the price of live pigs continued to run at a high level, resulting in a significant increase in net profit. Similarly, most pig companies also cited rising pig prices as the main reason for net profit growth.

The reporter found that, driven by the price of pigs, the net profit of the 25 listed pig companies in the first half of this year increased by an average of 748%. In addition to Muyuan shares, there are many companies whose net profit has increased by more than ten times. Dabeinong (002385) achieved a net profit of 893 million yuan in the first half of the year, a year-on-year increase of 2556%; Xinwufeng (600975) achieved a net profit of 149 million yuan, a year-on-year increase of 2384%; Aonong Biotechnology (603363) achieved a net profit of 338 million yuan, a year-on-year increase 1479%; Zhengbang Technology, Jinxinnong (002548), Tiankang Biological (002100) and other net profit growth also approached 1000%.

Affected by the African swine fever, the average price of live pigs for slaughter nationwide rose to 41.96 yuan/kg last year, nearly double the historical high. Although the price of pigs has corrected since the beginning of this year, they are still high compared to previous years. According to statistics from Zhuochuang Information, the average price of domestic and foreign three yuan pigs for slaughter in the first half of this year was 34.73 yuan/kg, an increase of 142.87% year-on-year. The average profit of self-breeding and self-raising pigs from January to June was as high as 2311.51 yuan/head. This can also explain why the performance of listed pig companies increased significantly in the first half of the year. According to the Ministry of Agriculture and Rural Affairs, in July, the national live pig inventory increased by 4.8% month-on-month, which was an increase for six consecutive months, with a year-on-year increase of 13.1%. This is the first year-on-year increase in pig stocks since April 2018, and it is another important turning point for the recovery of pig production capacity following the year-on-year growth in the stock of reproductive sows in June this year. The relevant person in charge of the Animal Husbandry and Veterinary Bureau of the Ministry of Agriculture and Rural Affairs said that the increase in live pig stocks indicates that the number of live pigs will also increase year-on-year after 5 to 6 months, which will fundamentally reverse the tight market supply.

Regarding the follow-up market, the open source securities research report shows that the overall pig price in August was still at a high level. As the breeding company accelerated the pace of slaughter production towards the end of the month, the pig price dropped continuously at the end of August. In the short term, pig prices are expected to stabilize as the pace of farm production slowed down in early September and the peak consumption season of "Golden Nine and Silver Ten" is superimposed. In the medium term, the supply of live pigs in the fourth quarter of this year is expected to gradually increase, especially during the off-season consumption after the Spring Festival, the price of pigs may drop significantly. Taking into account the slow increase in the supply of live pigs and the current cost center of breeding enterprises will increase significantly to about 18 yuan/kg, it is expected in 2021 The annual pig price is still at a high level of over 22 yuan/kg, and head breeding companies with low-cost advantages will achieve rapid expansion in the next two years.

Che Hongting, an analyst at Founder Interim Futures, said that after August, the slaughter of live pigs will start to increase steadily. At the same time, the non-pest vaccine has entered the trial production stage. It is expected that the live pig inventory will rebound and there will be better expectations for the market price of live pigs. Long-term pressure is expected to build up, and the peak period for capacity release is getting closer and closer. Therefore, the short-term live pig market price continues to rise. However, under the support of higher feed, epidemic prevention and piglet costs at the breeding end, the deep fall is limited. It is expected that the live pig price center will be the center of this year. Will remain high. In the long run, with the gradual recovery of production capacity, the "pig cycle" will enter the second half. From the end of 2020 to next year, the price of pigs is expected to be in a long downward cycle for a longer period of time.

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