Ping An View:
Dynamic sales are later than previous years, and the preparation time is centralized. Last year’s dynamic sales began one month before the Spring Festival, while this year it was launched two weeks before the Spring Festival. According to the feedback from the channel, the inventory backlog was serious due to the epidemic in the past 20 years. Since then, the channel has tended to be cautious and the stock node has moved backward. Due to the backward movement of nodes, the feedback from earlier channel research is pessimistic, resulting in the overall performance of the Baijiu sector is poor. In January 4th -1 14, the CITIC Baijiu index fell 9.1%. Recent channel research shows that terminal mobile sales have been gradually improved, the market price is strong, dealer inventory is healthy, and the overall basic orientation is good. In January 17th -1 25, CITIC Baijiu index rose 2.4%, we still optimistic about the performance of Baijiu market. We believe that the phenomenon of “short and concentrated peak season” may continue during the Spring Festival in the future.
The purchase of high-end wine is in the front, and the preparation of sub high-end and below is in the rear. From the perspective of goods preparation, there is differentiation between high-end and sub high-end. The preparation time of high-end wine is roughly the same as that in previous years, and the terminal collection is concentrated in December; The second and three or four line Baijiu stock nodes were relatively delayed, and began to refund in January. From the perspective of driven sales, the demand for high-end wine is mainly for gifts. Customers prefer to give gifts before the festival, and the demand is strong. High end wine has begun to be sold at the beginning of the month, and the demand is mostly concentrated in the middle and early ten days of January, entering the peak sales of group buying in the Spring Festival; The demand of the secondary high-end is hot near the Spring Festival this year, and the mobile sales are concentrated in the last two weeks.
The willingness of centralized goods preparation at the terminal decreases, and the quantity of goods prepared decreases. Channel research shows that the willingness of terminals to concentrate on goods preparation has decreased this year, It shows the characteristics of “a small amount and many times”. The main reasons are: 1) affected by the epidemic, the overall economic environment is relatively weak, dealers pay more attention to cash flow, channel goods preparation tends to be cautious, and the quantity of goods preparation is reduced; 2) wineries have strengthened warehouse construction in recent years, carried out fine construction, shortened delivery cycle and improved turnover rate.
The inventory is relatively benign, and the famous liquor enterprises receive payment actively. This year, manufacturers have relaxed the requirements for dealers’ payment collection progress, the overall financial pressure of dealers has slowed down, and the inventory of dealers is relatively benign. At present, the collection rhythm of major liquor enterprises shows a positive trend. The first stage of collection is basically completed, laying a good foundation for the next benign terminal goods preparation and terminal dynamic sales. In terms of price, 1) the collection of high-end liquor is good. The collection progress of Maotai is 20% – 25%, that of Wuliangye Yibin Co.Ltd(000858) dealers is 25% – 30%, and that of Guojiao is more than 30%. 2) The payment collection of the sub high-end sector is stable, and the payment collection progress is about 20% – 30%. 3) The overall collection rate of regional liquor enterprises remained at a high level.
This year’s rating performance was stable, and most of the ratings fell before the Spring Festival in previous years. This year, the manufacturers are more rational. Most of them deliver goods according to the inventory situation. The recent rating performance is stable. It is expected that the rating will not fall significantly during the Spring Festival. From the perspective of subdivided brands, the price of Maotai is stable this year, and the wholesale prices of original boxes and bulk bottles are maintained at 3200 yuan and 2760 yuan respectively; Wuliangye Yibin Co.Ltd(000858) the approval price is basically stable this month, maintained at about 970-980 yuan; Luzhou Laojiao Co.Ltd(000568) the price is basically stable this month, maintained at about 920.
The regional performance is differentiated, and the dynamic sales in the epidemic free areas are good. Affected by the epidemic situation, the dynamic sales and goods preparation in Henan, Shaanxi, Tianjin and other regions slowed down. Due to the epidemic situation in Henan, all mobile sales stagnated. Until January 18, the epidemic situation in Zhengzhou eased, gradually unsealed, and the flow of personnel began to recover. It is expected that mobile sales may pick up before the Spring Festival. The epidemic situation in East China and South China has little impact, and the market dynamic sales show a good trend. Shandong and Northeast China have better control over epidemic situation. Dealers feedback that the Baijiu sales situation is better than that of last year. At present, the terminal sells well, and there are replenishment needs in some channels.
The popularity of sauce and wine has cooled down, and the survival of the fittest brands are concentrated. According to channel research, the atmosphere of sauce and wine is significantly lower than that in the early stage. The price transmission of some sauce and wine products is blocked, affecting the overall profit. In terms of brands, OEM products and second and third tier products have poor dynamic sales and exacerbated the phenomenon of goods rejection, but they have little impact on brand wine, and the performance of head brands is still good. It is expected that the third and fourth tier brands without the support of brand power and product power will gradually withdraw from the market, and the sauce wine market will be concentrated.
Investment suggestions: this year’s Spring Festival starts late, and the feedback from the early stage is pessimistic, resulting in poor Baijiu performance. This week’s channel survey showed that the terminal dynamic sales in non epidemic areas were better than expected, the market rating was strong, the dealer inventory level was in a reasonable range, and the overall fundamentals were still good. Under the guidance of the national consumption promotion policy, the epidemic prevention and control will also tend to be accurate, and the impact on consumption is expected to gradually weaken. We are optimistic about the performance of the Baijiu sector, and think that the liquor sales have a high certainty, and recommend Kweichow Moutai Co.Ltd(600519) , Luzhou Laojiao Co.Ltd(000568) and Shede Spirits Co.Ltd(600702) . It is suggested that the regional Baijiu, such as emblem and Suzhou liquor, be concerned about the less affected areas, and pay attention to Anhui Kouzi Distillery Co.Ltd(603589) , Anhui Yingjia Distillery Co.Ltd(603198) , Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) , Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , Luzhou Laojiao Co.Ltd(000568) and so on.
Risk tips: 1) policy risk. Baijiu industry demand and tax rate are greatly influenced by policies, such as changes in relevant policies, which may have a greater impact on the company’s revenues and profits. 2) Baijiu industry downturn risk. Baijiu industry and the price trend is highly correlated, if Baijiu prices decline, may lead to a substantial slowdown in corporate revenue growth. 3) Industry competition intensifies. There is a problem of intensified competition in the Baijiu industry. We should guard against the adverse effects of price war and fleeing goods brought about by the deterioration of competition. 4) Food safety risks. Food safety is the red line. Once food safety problems occur, they will have a great negative impact on the industry. 5) The risk of epidemic aggravation. The Baijiu consumption scenario is reduced when the epidemic intensifies, which may impact the Baijiu industry boom.
