One of China’s leading stock brokers is singling out aquafeed producers as his top stock pick, citing higher seafood prices as the major reason for his bullishness.
Cheng Xiao Deng, an analyst at Tai Ping Yang Securities in Shanghai, singled out Guangdong Haid Group Co and Fujian Tianma Science & Technology Group as top “buy” stocks in a report on the sector.
Deng lists price-jumps in key species during the first five months of 2017 as the reason he picked the two stocks as prospective winners. He claims average prices are up significantly for mass-consumption species including yellow croaker (up 11.3 percent compared to this time last year), grass carp (up 17.4 percent), silver carp (up 12.8 percent) and crucian carp (up 10.7 percent).
“Prices for seafood will continue to rise over the rest of the year,” Cheng wrote.
The increases in prices are being driven by some key structural changes in China’s marine economy, he said. The lengthening of China’s domestic fishing ban to four months (from three) as well as a gradual shake-out of smaller producers – caused in part by weaker prices in 2013 to 2016 – is creating anxiety over supply, Cheng said.
Agriculture and fisheries stocks have been outperforming the Shanghai and Shenzhen markets in May, according to a Ping Tai survey of stocks.
