Potential growth of pig feed industry in the future unlimited feed enterprises need to seize the opportunity

Introduction: OA show ('918 '); in this year's pig breeding industry fell into a pattern of industry wide losses, the upstream feed industry also fell into a dilemma The latest statistics show that in March this year, pig feed sales fell 10% year-on-year, many pig feed enterprises began to sell profits, and some investors turned pessimistic towards pig feed enterprises We believe that when the industry is in a high boom, every company seems to be thriving When the industry is in a downturn, the company's high operating capacity is a good opportunity to find the best layout at a low price From three dimensions of customer structure, product structure and marketing mode, we analyze the ability of pig feed enterprises to resist the downward cycle, and then we are optimistic about the long-term growth potential of the pig feed business of dabiannong and TangRenShen in turn In the difficult stage of the industry, we will increase the market share to hedge the downward risk of the industry prosperity, and in the prosperous stage of the industry, we will expand the profit growth achievements XGC pig feed industry is facing a downturn Due to the transmission effect of "low price of livestock and poultry - loss of breeding - decrease of livestock and poultry stock - production and sales of feed", the boom of feed sales usually lags behind the boom of breeding for 1-2 quarters Under the situation of low price of livestock and poultry this year, the production of meat and poultry feed of 160 sample enterprises in March fell by 19.9% year-on-year, and that of pig feed by 10.0% year-on-year From our grassroots research, we can see that from April to may, the situation is basically similar, and the industry as a whole has no trend of improvement Due to the year-on-year decline of pig stock only 1.7%, the decline of 10% of pig feed reflects that farmers seek to reduce costs under the background of loss, the proportion of self prepared feed increases, and the proportion of commercial feed decreases XGC in the difficult industry background, we have a grassroots understanding of the situation From March to April, the feed sales of dabiannong and TangRenShen pigs increased by about 40% and 5% year on year, with an excess growth of 50% and 15% respectively At the same time, the gross profit per ton of the leading varieties was relatively stable, which did not show the serious impact of the promotion competition Our analysis shows that the core elements of their steady growth in the industry downturn are: high proportion of customers in large and medium-sized pig farms, high proportion of pre pig materials, and excellent marketing mode, which are also the guarantee of medium and long-term competitive advantage According to the customer structure of XGC, the enterprises with high proportion of medium-sized and above pig farms in the downstream customers are not sensitive to the fluctuation of breeding prosperity In each cycle, the main body of elimination is small retail investors with weak capital strength and low breeding efficiency The fund strength of medium-sized and above farmers is strong, and the fixed investment of pig farms and sows in the early stage is huge, so they will not withdraw easily, so the demand for feed is relatively stable; on the contrary, the customers are mainly small retail investors, and the sales volume of feed enterprises whose breeding volume is less than 10 sows (150 commercial pigs are sold annually) is impacted obviously at present And along with the process of large-scale refinement of aquaculture, feed enterprises whose target customers are large-scale farmers will find their customer base growing gradually, and large-scale farmers also have a high degree of recognition for advanced aquaculture technology and high-end efficient feed From the perspective of product structure, XGC's product structure, which is mainly composed of pig feed (sow feed, teaching trough feed, conservation feed), has strong anti risk ability In the case of low breeding profit, some farmers (especially corn raw material producing areas) will choose to purchase "premix + corn + soybean meal" and prepare their own medium and large pig ingredients to reduce the cost However, the requirements for raw materials, formula and production process are high At present, only large-scale feed enterprises can produce high-quality premixes, and small enterprises and farmers can not independently produce them Although the price of pig feed is expensive, it is the key to improve the efficiency of breeding and reduce the cost of comprehensive breeding Therefore, the demand for pig feed is stable and the profit space is large, which is not easily affected by the price war According to our previous research in Weifang, Shandong Province, the sales volume of large pig feed in some local feed factories fell by 20-30%, but the sows feed and nursery feed of dabiannong still increased by more than 30% ? from the perspective of marketing mode, the breeding service enterprises that enhance the value of the industrial chain through comprehensive services have more advantages than those that simply sell feed products For pig farmers, what kind of feed is not important The only thing they value is to improve production efficiency and earn more money The expression of culture effect is the comprehensive embodiment of seedling + feed + epidemic prevention + feed management, not just by feed products Therefore, Dabei agriculture provides "feed + vaccine + pig farm management system" and "variety improvement + feed" to farmers, the core of which is to increase the profits of breeding households by 100-200 yuan In the short term, XGC will maintain a low level of pig feed prosperity in the next two quarters However, based on the above analysis framework, the logic we recommend is not to judge the turning point of the cycle that the capital market pays attention to, but to determine whether the industry has core competitive advantages and can squeeze the share of competitors Therefore, in the difficult stage of the industry, the enterprises that can increase the market share to hedge the downward risk of the industry boom, and in the boom stage, the enterprises that can take advantage of the potential to expand the profit growth achievements are the targets we are looking for According to our industrial research, the traditional pig material giants, Zhengda, Dabei Nong and TangRenShen, and the rising stars, zhonghaida and aonong's pig material are all the leaders In the medium and long term, XGC is firmly optimistic about the future growth potential of pig feed industry We expect feed silver age (2008-2020 The livestock and poultry breeding will show the characteristics of large-scale, intensive and refined, while the downstream farmers will upgrade from using pure commercial feed products to using refined, phased feed, from purchasing feed products to purchasing "product + service + training" and other comprehensive supporting services, and the excellent feed enterprises that are good at grasping the industry trend will keep on fast Fast growth, while SMEs are accelerating their exit from the market XGc