Market review last week:
Last week (January 17, 2022-january 21, 2022), the food and beverage sector (Shenwan) rose by 3.81%, the Shanghai Composite Index rose by 0.04%, the Shenzhen Component Index fell by 0.86%, and the Shanghai and Shenzhen 300 rose by 1.11%. The food and beverage sector outperformed the Shanghai Composite Index by 3.78 percentage points last week, ranking fourth in the weekly rise and fall of Shenwan's 31 primary sub industries. Sub sectors rose most of the time, Baijiu sector rose 3.96%.
Core view: policy plus consumption, Baijiu structural market is expected to continue.
Baijiu sector: China's consumption is weak, the government through policies to increase consumption, to boost investor confidence. According to the data of the National Bureau of statistics, after deducting the price factor, the social zero actually decreased by 0.49 percentage points year-on-year in December 2021. China's consumption performance was weak at the end of 2021. In this context, the national development and Reform Commission issued the notice on doing a good job in promoting consumption in the near future. Through ten measures, it strives to grasp the peak season of holiday consumption, further release the consumption potential of residents and promote a stable start of the economy in the first quarter on the premise of accurate and effective epidemic prevention and control. Under the policy warm wind, the certainty of the peak holiday consumption season is enhanced, and the confidence of investors is expected to recover.
Baijiu industry differentiation trend unchanged, structural market is expected to continue. At present, China's economic development is steadily advancing, the trend of consumption upgrading continues, and the per capita disposable income and high net worth population steadily increase. The demand for Baijiu, especially high-end and secondary Baijiu, is determinate. Baijiu Baijiu Baijiu Baijiu is a highly differentiated wine industry. The high-end liquor has improved its brand strength and performance through raising prices, while the second high-end liquor enjoys the blank price band after the high-end Baijiu price rises. The upgrading of the secondary and high-end liquor products has the growth space of volume and price rising. Under the dual effects of Baijiu price rising and low inventory in 2021, the current node suggests that Baijiu sector should be sold in the Spring Festival.
Beer sector: beer enterprises have laid out a thousand yuan price belt and accelerated the process of high-end. Since 2021, beer manufacturers have laid out high-end products. Among them, the three leading enterprises have laid out a thousand yuan price band, raising the price ceiling of the beer industry. In the first half of the year, China Resources beer took the lead in launching the ultra-high-end product "Li", priced at 999 yuan / box (two bottles), Tsingtao Brewery Company Limited(600600) and Budweiser beer did not want to fall behind. At the beginning of 2022, they launched the "Legend of the first world" priced at 1399 yuan / bottle and the "limited edition of Budweiser master legend of the tiger" priced at 1588 yuan / bottle respectively. The high-end process of the beer industry is accelerated, and the trend of product structural upgrading of the beer industry in 2022 is expected to continue.
Looking forward to 2022, the beer industry is expected to achieve both volume and price increases. In terms of output, in 2020, affected by the disturbance of the epidemic, China's Beer Enterprises above Designated Size produced 34.11 million kiloliters of beer, while in 2021, China's beer output rebounded to 35.62 million kiloliters. The dissipation of the disturbance factors of the epidemic and the expectation of consumption recovery in 2022 make the increase of beer volume more deterministic. In terms of price, in 2021, affected by the rising price of upstream raw materials, beer enterprises have raised prices to cover the pressure on the cost side. In the trend of consumption upgrading, consumers have a strong acceptance of beer manufacturers' introduction of high-end products and product price increases. In addition, in 2022, beer enterprises will usher in the release of price increase dividends. Combined with the fact that the price of upstream raw materials is expected to fall, the performance of the beer industry in 2022 is expected to achieve high growth.
Investment advice
Plate allocation: Baijiu > beer > dairy products > snack food > condiment; Baijiu: we should pay attention to the high potential Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , Anhui Gujing Distillery Company Limited(000596) and Jiugui Liquor Co.Ltd(000799) of high-end liquor enterprises Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Luzhou Laojiao Co.Ltd(000568) and sub high end wine enterprises. Beer: it is suggested to pay attention to Tsingtao Brewery Company Limited(600600) with high growth expectation in future performance; Dairy products: it is suggested to focus on Inner Mongolia Yili Industrial Group Co.Ltd(600887) in the three aspects of production capacity, channels and products.
Risk tips:
Baijiu price rise less than expected, terminal demand fell, food safety issues.
