Hong Kong Stock Concept Tracking | El Niño phenomenon abnormally observed, institutions focus on the impact of climate on agriculture and animal husbandry (with concept stocks)

In June, the price of live pigs first fell, then rose, and then fell again, consolidating at a high level. As of the 17th, the national average lowest price was 18.33 yuan/kg, and the highest price was 18.98 yuan/kg. The decrease in the number of slaughtered pigs supported prices at the upstream breeding end with a positive attitude; the trading of white bars was average, and slaughter companies had limited acceptance of high prices. In the game between supply and demand, live pig prices remained at a high level. Affected by last year's reduction in pig production capacity, the future output of live pigs still shows a decreasing trend. At the same time, industry insiders generally have a bullish view, creating a strong bullish atmosphere. Therefore, Zhuochuang Information believes that the strong expectation for live pig prices remains unchanged. According to the Ministry of Agriculture and Rural Affairs, since May, the national pig production capacity has been basically reduced, and live pig prices have continued to rise. Experts introduced that in the second week of June, the national average price of live pigs was 18.41 yuan per kilogram, a cumulative increase of 25.7% since early March. With the reduction of pig production capacity and the rise in prices, the profitability of breeding households has significantly improved, and the enthusiasm for raising pigs is also increasing. A breeder in Qingdao, Shandong Province, said that selling a pig now can earn around 500 yuan, greatly improving profitability. China CITIC Securities research report stated that against the background of global warming, abnormal atmospheric circulation and El Niño have led to frequent high temperatures in the northern regions recently, significantly affecting the planting and pig sectors. In terms of planting, the current Huang-Huai-Hai region is in the peak summer sowing period, with persistently high temperatures leading to accelerated soil moisture loss and drought in some areas, adversely affecting the suitable moisture and sowing period. In response, the Ministry of Agriculture and Rural Affairs and three other departments have deployed work to resist high temperatures, drought, and ensure summer sowing and seedling protection. From the consumption side of the pig sector, high temperatures will exert a certain suppressive effect on pork consumption. After the Dragon Boat Festival stockpiling, the high pig prices combined with high temperatures will restrict the white bar market performance, leading to a decline in slaughter volume. Currently, many areas have high temperatures, and terminal consumption lacks rapid improvement driving force. In summary, with the background of reducing pig production capacity, the expectation of rising pig prices remains unchanged. Major breeding companies achieved profitability in May, and it is expected that the future pig prices will still mainly trend upwards in a volatile manner. Livestock-related companies: DEKON AGR (02419): Its food processing plant project in Yibin, Sichuan is in progress, and its slaughterhouse has been operational since October this year, with a target of slaughtering over 3 million pigs annually. At the same time, it has cooperated with Tönnies from Germany to establish a joint venture company and has preliminarily built a slaughterhouse in Meishan City with an annual slaughtering capacity of over 2 million pigs. With the recent rise in pig prices and cost improvement, CICC raised its net profit forecast for 2024 from 1.2 billion yuan to 2.6 billion yuan, maintaining a net profit forecast of 3.8 billion yuan for 2025. COFCO Health (01610): In May 2024, the number of pigs slaughtered was 265,000, an increase of 8.61% compared to the previous period. The average selling price of large pigs was 16 yuan/kg, an increase of 4.85% compared to the previous period. The sales volume of fresh pork was 20,900 tons, an increase of 3.98% compared to the previous period, with brand revenue accounting for 26.43% of the fresh pork business. Want Want China Holdings (00288): Its main business operations are in Europe and America. In November 2023, Want Want China Holdings stated that the company is evaluating its U.S. business and considering listing the business