Pork stocks are now trading on the left side, but what should the leading companies continue to lose?

Last night, the pig leader Makihara shares disclosed the third quarter performance forecast, and it is expected to make a profit of 8.5 billion yuan to 9 billion yuan in the first three quarters, down 57.12% to 59.5% year-on-year. Among them, the third quarter is expected to lose 500 million yuan to 1 billion yuan, down 104.9% to 109.8% from the same period last year. Profit in the same period last year was 10.2 billion yuan. Makihara shares can be said to be the strongest in the industry in terms of pig cost control, which also makes many people feel that its finances are "problematic". The problem is not to be evaluated first, but when the industry's leaders have already lost money, how far is the bottom of the cycle rotation? Is it possible to participate in a heavy position at present? This is worth thinking about.

First, what is the pig cycle

The appearance of the pig cycle is the cyclical fluctuation of pig prices, and the essence behind it is the cyclical change of the number of breeding sows and the resulting cyclical change of pig output. In the past, the pig cycle was generally driven by the spontaneous change of the number of fertile sows driven by profit changes, so the regularity and predictability were relatively strong.

Second, several key indicators at the bottom of the pig cycle

1, the industry leader began to lose money

2, the number of breeding sows is very reduced

3, pig food ratio is less than 5%

Third, pork listed companies will continue to lose money

From the breeding of sows to the commercial pig out of the pen time of 10 months, which means that from the second half of this year to the first quarter of next year, the national pig supply capacity is continuously increasing, and then consider the seasonality, it is expected that the pig output in the third and fourth quarters of this year will continue to grow month-on-month, and the pig output before November is expected to increase significantly At the same time, consumption has not yet entered the peak season, so it is expected that the pig price in September and October will not have much upward momentum on the current basis. At present, the average price of pigs is less than 14 yuan / kg, according to the weight of 120 kg, the average cost of 16.5 yuan / kg, the average loss of the head is expected to be about 300 yuan. Generally speaking, after the Spring Festival, pig prices are the most depressed time of the year, and pig prices in the first quarter of next year are likely to remain below the cost line.

4. Pre-judgment

In the fourth quarter, driven by the peak consumption season, pig prices are expected to rise, and it is optimistic that the industry's profitability may recover, but after entering February 2022, the consumption off-season superimposed pig supply has increased, and pig prices are expected to be sluggish again. The short profit recovery window in the fourth quarter is not expected to be enough to support the significant improvement of the cash flow statement of the breeding body, which is not enough to support the recovery of fertile sow production capacity, and the number of fertile sows during the downturn in pig prices in the first half of next year may accelerate again. Based on this, we expect that the current round of pig cycle can breed sow inventory is expected to continue in the second half of 2021 - the first half of 2022 to continue to dematerialize, optimistic situation, the second half of 2022 pig prices or will usher in the next round of pig cycle inflection point, but considering that the current breeding sow inventory in the destocking at the same time the structure is also optimized, the next round of pig price inflection point time may be delayed, pessimistic expectations, or in the first half of 2023 can see the pig price inflection point.

The above is mainly from: Changjiang Securities - Agricultural Products Industry Pig Breeding Industry Special Report Eighty, is a very good research report, but it was deleted, interested friends can go to find it.

Fifth, personal understanding

I made money in the last round of the pig cycle, but I didn't make a lot of money. I bought Tiankang Biology and Zhengbang Technology, but at that time, I didn't know much about the pig cycle, only that there were funds in pork stocks, and the amount of funds was relatively large. The deeper logical cognition is superficial and the lack of self-confidence leads to the purchase of good stocks and the holding time is too short.

Back to this round of pork stock investment, there are indeed funds in the near future, I am more inclined to switch between the level of funds, pork and other consumer stocks are indeed cheap, fund allocation needs. In addition, the fourth quarter is the eve of spring, and there is a certain demand for pork.

But the bottom of the specific large-level market is a bit early, and I personally prefer to be in the bottom area after the first quarter of next year.