To be a cyclical stock, the most important thing is to study the relationship between supply and demand in the industry. The sharp decline in the introduction of white-feather chicken cyclic ancestors has become a fait accompli, and there is basically no need to study this part. What remains is to consider another important variable, breeder quality and productivity, which directly affects the probability of delayed culling and molt occurring. Let’s analyze a few data in detail to leave some traces for ourselves. First of all, today I will reorganize the transmission time and quantity of the ancestors, parents, commercial generations, and chickens of the white feather chicken industry. .
1. Production cycle and multiplication coefficient of white -feathered chickens. After the introduction, the grandparent chickens will lay eggs and hatch the parent-generation chickens in 26 weeks. The parent-generation chickens will hatch in 26 weeks and hatch commercial eggs. The chickens are raised for 42 days in the farm. There is also the multiplication coefficient. One set of grandparent chickens can breed 50-60 sets of parent-generation chickens, and one set of parent-generation chickens can breed 100-130 sets of commercial generation chickens (the quality of breeders is different, and the multiplication coefficient varies greatly. big difference) . The basic knowledge of making white-feathered chickens must be thoroughly mastered, and the breeding process and multiplication coefficient must be clarified. Generally, after the introduction of the grandparents, it will affect the supply and demand relationship of the parent generation chickens for 6-7 months, and the supply and demand relationship of the commercial generation chickens for 12-14 months, because the egg production peak is generally extended by 3 months, then It takes 9 months to have a significant impact on the parent generation, and 18-20 months to have a significant impact on the commodity generation. This year’s grandparent introduction was interrupted in May, so it will be exactly 7 months now, and the supply and demand relationship of the parent generation will begin to have an impact. We see that the price of the parent generation has risen sharply in December, and the high-quality parent generation breeders (An Wei Jie) has risen to 80 yuan/set, approaching a record high of 90 yuan/set. The above are all basic issues. After clarifying the basic issues, we now need to study the current supply and demand relationship, or what the supply and demand relationship will be like in the next year. This is the fundamental reason for the rise and fall of stock prices.
2. The number of ancestral introductions and updates As of November 2022, 720,000 sets of ancestral introductions and updates, including 400,000 sets of foreign introductions and 320,000 sets of domestic self-propagation updates. 270,000 sets of Anweijie and 130,000 sets of Kebao were introduced from abroad. There are 150,000 sets of Wuhan Kebao and 170,000 sets of Shengnong and others in China. Why do I need to subdivide the structure of the introduction and renewal of the ancestors? Because the breeds are different, the new energy and production efficiency of the breeders vary greatly. I will make a calculation later. Among the number of introduced breeds this year, there are only 270,000 sets of high-quality breeders, accounting for less than 40%. Including only 400,000 sets of foreign Kebao, the number of introduced breeds has dropped by 60% compared with the same period last year. The percentage of decline should be as large as A history has been created, and the product structure with a low proportion of high-quality breeders will seriously affect the production flexibility of breeders. The outbreak of highly pathogenic avian influenza in foreign countries has led to a sharp decline in the introduction of ancestors, and there is no possibility of reintroduction within 3 months. This is the most fundamental reason for this round of white-feather chicken cycle. Follow-up will continue to pay attention to December Data on foreign introductions until March next year. At present, domestic self-propagation is still in the promotion period, and it takes time to verify, and the feed-to-meat ratio is relatively high, and the scale is not economical in the current state of meager profit in the industry. The most promising domestic self-proliferation is Shengze 901. This year, it is mainly for self-use, and there will be a certain amount of export next year. If the profit in the future increases significantly, resulting in a decrease in sensitivity to the quality of breeders, then domestic breeders will be replaced. Come great opportunity. The precondition is that the profit has increased significantly, and the price of chicken fry and chicken has increased significantly. I think the stock price in the secondary market may have reached a high level at this time.
3. Analysis of the quality elasticity of breeders Let’s do a simple calculation problem. If it is Aviagen’s 1 set of grandparent breeders, 60 sets of parents can be produced after introduction, and 1 set of parents can produce 130 sets of commercial chicks. Because the breeder chickens are of good quality, they can moult or delay elimination, and increase the production capacity by 20%. That 1 set of Aviagen grandparent chicks can produce 60*130*120%=9360 commercial chickens in extremely high-quality condition Seedling. If it is Kebao or domestic self-breeding chickens, a set of grandparent breeders can produce 50 sets of parent-generation chickens, and 1 set of parent-generation chickens can produce 110 sets of commercial-generation chickens. Generally, there is no high Driven by profit, breeders with poor performance will not moult, or even be eliminated in advance. Therefore, whether poor-quality breeders will molt depends on the prices of downstream commercial chicklings and broiler chickens. There will be a high probability of choosing to moult. Here we will calculate based on not eliminating in advance, because after all, the price of chick chicks and broiler chickens have not yet reached a high level. One Kebao grandparent chicken can produce 50*110=5500 commercial chickens, and the production efficiency of domestic self-propagation is much worse than that of Kebao. You can see how exaggerated the gap is. A breeder with good performance and a breeder with poor performance have a 30-40% difference in production efficiency. This is actually a very, very important part of studying white feather chickens. The quality of breeders Flexibility is actually the hardest part. The examples above are all extreme cases. Generally speaking, there must be a 20% difference in production efficiency between breeders with good performance and breeders with poor performance. From the data of the association, it can also be seen that in 2022, the production efficiency of grandparent breeders will drop by 20%, and the production efficiency of parent breeders will drop by 16%. The fundamental reason why the prices of generation chicken fry and commodity chicken fry are not bad. Looking back on 2015-2016, we also faced the closure of foreign bird flu, and the introduction of species dropped sharply (640,000 sets were introduced from abroad in that year, and 400,000 sets this year). Large-scale moulting, delayed elimination and moulting of breeders increased the production flexibility of breeders, resulting in no significant shortage of chickens in the industry. It was not until the end of 2018 that three years of low introduction and the resonance of African swine fever ushered in a major reversal in the fundamentals of the industry. Therefore, the quality of breeder chickens is a very important factor in the study of the white feather chicken industry.
4. How big is the real gap in the industry in the future? Next, I want to try to analyze the current breeder structure and face the current decline in the introduction of grandparents, and how big the gap in production capacity will be in the future. This part of the analysis is purely subjective, and there must be deviations from the facts. We use the current structure of ancestral breeder chickens to deduce the situation of the multi-capacity gap in the next year. According to the data of the association, the consumption of white-feathered chickens in the past two years is 6.5 billion. Out of the principle of prudence, we use conservative data for analysis. According to the multiplication coefficient of 6.5 billion white-feathered chickens, under normal circumstances, 1.1 million sets of grandparent breeders are required. This year, 270,000 sets of Aviagen were introduced. The performance is good. Considering that the feathers can be moulted, the multiplication coefficient of a set of ancestors is calculated according to 8000, which can produce 2.2 billion white-feathered broilers. According to calculations, 1.5 billion white-feathered broilers can be produced. The remaining 170,000 sets of domestic self-propagation, Shengze 901 and others can produce 1 billion, a total of 22+15+10=4.7 billion. Corresponding to the demand of 6.5 billion pieces, the production capacity gap is 1.8 billion pieces, and the gap ratio (6.5 billion-4.7 billion)/6.5 billion=28%. How to make up for this gap, increase the price of the industrial chain and increase the income, so that Kebao can also moult (poor quality can make money even if the quality is high), or the industry uses domestic varieties that are not economically expensive on a large scale. Even if Kebao can also moult, the increase of Kebao’s production capacity by 30% will only increase by 450 million. The general situation is like this. Of course I did not count the moulting or delayed culling of the current stock of grandparents and stock of parents. After all, the current stock is a thing of the past in the future, and the performance of the breeders is not good.
5. We can refer to the situation in 2015-2016 for the recovery time of foreign introductions . After the occurrence of bird flu in foreign countries, China has been low-introduction in the past few years from 2015 to 2018 (bird flu occurred in China in February 2017). According to the actual situation, at least before the first quarter of next year, there is no possibility of large-scale introduction. Reason: The introduction of bird flu can only be resumed 3-6 months after bird flu is eliminated in the states of the United States. There are few domestic flights that do not match and there are no direct flights, resulting in high mortality of chicken chicks (the death loss is borne by the United States), and the United States is unwilling to provide it. China and New Zealand are in the process of introducing species. It is expected that the introduction will resume in the first quarter of next year, but the volume is very small, with an average of 20,000 to 30,000 sets per month. European introduction is not possible. This is probably the case with foreign introductions. Yisheng is actively trying to introduce 20,000 sets in December.
6. Dealer stocking situation This part is the content of Cui Xiaoming’s teleconference: the current inventory of slaughterhouses is 7 days, and dealers’ stocking inventory is 3-7 days, which is very low. The highest in history was 3-6 months at the beginning of 2017 ( did not come that year). The current low inventory will speed up the arrival of the big cycle if the dealer’s mood comes and increases the stocking.
7. Comparison between 2015-2016, 2019 and the current cycle
2015: 1. Avian influenza led to low introduction of ancestral breeds (balance point -20%); 2. Breeding chickens are of good quality (basically all Aviagen breeds), which can moult significantly and delay culling; 3. The price of pigs is still acceptable 2019: 1. Low introduction of breeds for three consecutive years; 2. African swine fever occurred, reproductive sows fell by 50%, and high pig prices led to chicken replacing pork. 2022: 1. Avian influenza led to low introduction of ancestors (balance point -30% or more); 2. The quality of the breeders is poor (Kebao and self-propagation account for a large proportion), which limits the ability to moult; 3. The price of pigs is acceptable
8. The price comparison of animal protein. I don’t think I need to go into details. It’s all public information. White-feathered chicken is the cheapest animal protein, with a low feed-to-meat ratio, and is least affected by feed price increases. At present, white feather chicken is 9 yuan/kg, yellow feather chicken is 14 yuan/kg, and pork is 22 yuan/kg. So the pig cycle will affect the chicken cycle, but it is not completely consistent here, because when the price of pork was the lowest, it was not lower than the current price of white-feathered chicken. At present, the price of pork is likely to remain above 20 yuan/kg for half a year, which also provides a relatively good environment for the chicken cycle.
The above content is some data I summarized and analyzed after listening to 7-8 industry conference calls in the past two months. There must be many subjective assumptions and incompleteness. It has nothing to do with individual stocks, and it does not blow tickets. What is recorded and analyzed is industry data, which is reserved for the current and future self. $Minhe Shares(SZ002234)$ $Yisheng Shares(SZ002458)$ $Sunner Development(SZ002299)$
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