Since the second half of 2022, the price of white feather broilers has continued to rise. The information display of Zhuo Chuang Information,As of October 31, the profit of white feather broiler breeding in October was 2.15 yuan/chicken, up 24.28 percent from the previous month and 211.98 percent from the previous year.. According to the forecast, broiler breeding may continue to be profitable in November, and the profit of single broiler breeding may be between 1.50 yuan and 2.50 yuan.

Regarding the reasons for the increase in broiler breeding profits, industry insiders interviewed by a reporter from the Securities Daily mentioned that changes in supply and strong demand are the main reasons. For the current "cycle" characteristics of the aquaculture industry, how to ensure the stability of profits of the relevant aquaculture listed companies is the focus of investors' attention. In this regard, the industry gives the "extension of the industrial chain, so that the industrial chain up and down the financing" recommendations.

1.The prices of chicken seedlings and broilers have both increased.

Zhuochuang information data show that in the breeding industry chain of white feather broilers, the price of chicken seedlings, breeding costs and breeding income are all at a high level.

In terms of breeding costs, from late August to mid-to-early September, affected by higher prices of feed and chicken seedlings, the average breeding cost was 4.13 yuan/jin, up 1.23 percent from the previous month and 7.55 percent from the same period last year. From the perspective of breeding income, boosted by both cost and supply, the market for hairy chickens improved, with the average price of broilers 4.52 yuan/jin, up 2.49 percent from the previous month and 31.01 percent from the same period last year.

On the whole, although the cost and income of farming enterprises have both risen,Income rose significantly, driving broiler breeding profits from 1.20 yuan/only in early October to 3.13 yuan/only at the end of October.

The rise in the price of white feather broilers has kept the price of chicken seedlings in the upper reaches at a high level. As the overall seedling emergence of incubating enterprises in October is relatively low, and the breeding profits are rich, supporting the high price of seedlings. It is expected that the number of hatched seedlings will continue to be low in November, and the tight supply situation will not change. Therefore, the price of chicken seedlings will remain at a high level of 3.50 yuan/feather to 4.00 yuan/feather.

2.Since the second quarter, broilers have started to improve in an all-round way.

Guo Tie, chief reporter of the Beijing News, wrote an article that: affected by the outbreak of the international bird flu epidemic, the elimination of production capacity, the improvement of consumer demand, and the strengthening of pork prices, the market of yellow feather broilers and white feather broilers has recovered since the second quarter of this year, and the profitability of enterprises has improved. The industry is expected,White feather broiler will show a "slow increase in production, price volatility" trend, the full year is expected to be profitable, yellow feather broiler cycle has also opened the upward channel.

According to the semi-annual report of Lihua shares, yellow feather broiler is a kind of broiler breed independently cultivated in China, which has the characteristics of wide variety, long growth cycle and high price. Affected by factors such as industry capacity expansion in the second half of 2019, the impact of the new coronary pneumonia epidemic in 2020 on consumption, and depressed pig prices in 2021, the yellow-feathered broiler market is in a depressed state in 2020-2021, and the simultaneous industry capacity continues to de-turn and supply contracts. In May 2022, the yellow-feathered broiler cycle opened the upward channel, chicken prices rose significantly, and June showed the characteristics of the off-season.

According to the introduction of "Shengnong Development", white feather broilers account for more than 50% of the market share. In the first half of 2022, the entire white feather broiler industry chain, in addition to the commodity generation breeding link, the rest of the links are in a state of loss, production capacity continued to de-de.

Long-term low prices have led to more de-production capacity in the industry, and the supply of chicken seedlings has shown a downward trend. According to the statistics of the China Animal Husbandry Association, from January to July 2022, the renewal of China's ancestral white feather broiler breeders decreased by 23.5 percent year-on-year, the supply of parental broiler chicks decreased by 7.5 percent year-on-year, and the supply of commercial broiler chicks decreased by 12 percent year-on-year. In addition, since April this year, bird flu has occurred in many countries, and the General Administration of Customs has issued a list of animals and their products prohibited from being imported from countries and regions where animal diseases are endemic. Industry data show that from May to July 2022, the number of overseas introductions in China was zero, and the cumulative number of introductions from January to July was about 468500, down 26.95 percent from the same period last year.

Affected by the above series of factors, since late March this year, the price of commercial white feather broiler seedlings began to fluctuate and rise.With the de-production of the industry, the recovery of consumption and the upward trend of pig prices, the price of chicken seedlings rose significantly in the second quarter.

3. Industry Proposals to Expand Industrial Chain Balanced Operation

Judging from the data of the three quarterly reports just released, the relevant listed companies of white feather broiler breeding have good performance. However, for investors, how to maintain stable operations and maintain stable profit growth is also of great concern. In this regard, industry insiders interviewed by a reporter from the Securities Daily believe that expanding the industrial chain is a good way. For example, some companies have announced their high-profile entry into the prefabricated vegetable industry.

Ai Media Consulting CEO Zhang Yi said in an interview with a reporter from the Securities Daily that the trend of consumption recovery in the third quarter is obvious. In this context, it is possible to see a rebound in the performance and product prices of breeding companies. In addition, Zhang Yi believes that a key factor that can not be ignored when aquaculture enterprises can release their performance in the first three quarters is the development of prefabricated vegetables. "When the export side of farming and farming is not very smooth, it is a good way for companies to use prefabricated vegetables to break the bottleneck of development. And, in terms of demand, prefabricated vegetables are performing well in both domestic and foreign markets, and for farming companies, they have a good role in promoting development."

Lin Guofa, research director of Brick's Agricultural Products Purchasing Network, introduced in an interview with a reporter from the Securities Daily that extending the industrial chain is conducive to balancing corporate profit fluctuations. For example, from the existing market maturity cases, the profit fluctuation of enterprises with the integration of breeding, breeding, slaughtering and processing is significantly smaller than that of enterprises that only carry out broiler fattening business.

For aquaculture enterprises, it is necessary to take advantage of the current industrial chain expansion opportunities, "change the thinking of single supply of aquaculture enterprises in the past, and be able to integrate up and down in the development of the industrial chain." Zhang Yi suggested.