I. the performance of the Spring Festival verifies our previous judgment: after the festival, the state of high sales continues, the performance of Hui liquor and Su liquor is strong, and the impact of the epidemic leads to obvious price and regional differentiation
For example, according to our judgment before the festival, based on the changes of consumption habits and consumption convenience, this year’s post festival market continues the trend of peak sales before the festival. In terms of subregions, the market differentiation of each region is obvious in peak season. Previously, the epidemic broke out in many places, and the consumer side was greatly affected. However, the high-risk areas such as Shaanxi and Henan were gradually unsealed one week before the festival, and the dynamic sales were replenished to reduce the losses; The markets of regions not affected by the epidemic, such as Jiangsu, Sichuan and Hunan, are basically not affected, and the demand of some regions, such as the population flowing into the market of Anhui, a large province, has increased greatly.
This year’s Spring Festival consumer demand has indeed been affected. The performance of the dynamic sales end of high-end wine terminals is flat, and the performance of sub high-end and mass price bands is different in different regions and brands. However, in the Baijiu industry, the brand has always been stronger and the channel power is weaker. So the current Baijiu liquor enterprises have higher repayment performance, and the first quarter results are all guaranteed. Considering the feedback of the Spring Festival peak season, Kweichow Moutai Co.Ltd(600519) , Huijiu and sujiu are more prominent.
1) before and after the Spring Festival, the market is “cold to hot”, and the Baijiu sales still strong this Spring Festival.
This year’s Baijiu liquor experienced a “cold to hot” transformation. Before the festival, two to three weeks ago, the capital market generally believed that Baijiu Spring Festival sales were in a low slump, and the main reason was 1. In recent years, the Spring Festival season was gradually postponed and stretched, resulting in two to three weeks’ pre service sales and feedback. 2) The sporadic outbreak of the epidemic has an impact on the consumption scene to a certain extent; 3) The base number of some national sub high-end liquor enterprises was raised after investment promotion and distribution, resulting in a year-on-year slowdown this year.
But the peak season is postponed and stretched is the core reason for the downturn. Since the last week of the festival, Baijiu terminal sales have been rapidly changing, and the spring festival performance is still strong this year. In recent years, the characteristics of moving sales in the Spring Festival season (i.e., the consumption habit of buying along with the purchase and the convenience of consumption that can be bought at any time) determines that the performance of Baijiu before the festival can not reflect the whole situation. After the change of consumer’s habits, the heat of selling after the festival is still high. Actual observation, the last week before the festival, the regional terminal dynamic sales generally rapid heat, Baijiu season sales actual performance is not bad, but stronger.
2) the total demand is indeed affected to a certain extent, and the terminal moving sales are divided
The overall weakness of the economy in 2021 led to a certain impact on Baijiu demand. On the one hand, this year’s repeated epidemic, power cut and other policies have a great impact on small and medium-sized business owners, and the consumption scenes such as the annual meeting of the company and the increase of business gifts have decreased year-on-year. On the other hand, the proportion of mass consumption during the Spring Festival is relatively high, and social scenes such as banquets, visiting relatives and friends, and friends’ drinking in third and fourth tier cities are less affected. However, compared with last year, the upgrading speed of the mainstream price band has slowed down, and the performance of provinces is also different (Henan is generally affected by the epidemic; Shandong, Anhui and other markets are strong).
The terminal dynamic sales are differentiated, the phenomenon of consumption stratification is more obvious, and the consumption of each price belt is more concentrated to the head. Compared with the same period last year, the performance of mobile sales of high-end liquor terminals is relatively flat, but the demand is rigid and the impact is limited; Regional sub high-end leaders have bright spots in their soundness, Hui liquor is hot, and Su liquor meets expectations; Pan national sub high-end brands have a weak foundation and are affected to some extent, and their performance is weaker than that of last year.
3) the wine differentiation of each region is the strongest
The number of people returning home during the Spring Festival has increased, benefiting from the influx of population into major provinces. During the Spring Festival this year, Anhui, Hunan, Sichuan, Jiangsu and other places all have a population inflow into major provinces, stimulating local spring festival consumption. The repeated epidemic also led to the damage of movable sales in some of the hardest hit areas (some areas were unsealed and replaced before the festival), and the performance of each region was differentiated. The Spring Festival accounts for a high proportion of the annual sales volume of wine enterprises. Previously, the epidemic prevention and control led to the damage of consumption scenes in Henan, Shaanxi, Tianjin, Zhejiang and other markets, but other major consumption provinces such as Sichuan, Anhui and Jiangsu are basically not affected. It is expected that the performance of wine enterprises will be differentiated in the first half of the year. Among them, Anhui market is the most typical. Benefiting from the factors such as the small impact of the epidemic, the return of a large number of people and the low base of last year’s Spring Festival, Huijiu Longtou Gujing, Anhui Kouzi Distillery Co.Ltd(603589) , Anhui Yingjia Distillery Co.Ltd(603198) and other strong performances.
However, at present, the positive margin of the disturbance of the epidemic is weakened. Even if the epidemic repeatedly affects income, the impact is not large. Taking the regional leader Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) and sub high-end liquor enterprises Sichuan Swellfun Co.Ltd(600779) with high market share in Henan as an example, it is roughly estimated that the revenue of the two liquor enterprises in Henan market accounts for about 10% – 15% of their own revenue. We judge that even if the two liquor enterprises lose half of their sales due to the impact of the epidemic, the impact on their revenue is only a low single digit level. Moreover, around December 24, the epidemic situation in Shaanxi and Henan was gradually unsealed, and the movable sales were also significantly replenished.
4) liquor enterprises have a high degree of completion of payment collection, and the performance of the first quarter is guaranteed
From the actual payment collection and dynamic sales, high-end liquor + Hui liquor performed best, followed by other real estate liquor, and the third tier liquor had the greatest high-end pressure. But the Baijiu industry has always been stronger and the power to speak is weaker. Even under pressure, the best liquor factories will probably finish the Spring Festival this year. At the same time, some sub high-end liquor enterprises (such as Shede Spirits Co.Ltd(600702) , Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , Jiugui Liquor Co.Ltd(000799) etc.) that have announced their performance at present have left their strength in Q4 in 2021, so there is no need to worry too much about the performance of liquor enterprises in the first quarter.
5) the popularity of sauce and wine decreased during the Spring Festival this year
During the Spring Festival this year, the consumption heat of sauce and wine decreased significantly compared with that of last year. There were fewer scenes of sauce and wine on the dinner table, and consumers had different comments on the second and third tier sauce and wine.
II. The completion of payment collection of leading liquor enterprises is high, and the dynamic sales of Huizhou liquor leading enterprises are strong. From the performance of individual stocks, the completion degree of high-end wine collection is high, but the terminal dynamic sales is slightly flat year-on-year; The secondary high-end performance is layered. Huijiu > sujiu > other local wines and the third tier secondary high-end. The dynamic sales of Huijiu leaders such as Anhui Gujing Distillery Company Limited(000596) , Anhui Kouzi Distillery Co.Ltd(603589) and Anhui Yingjia Distillery Co.Ltd(603198) are strong, and the performance of sujiu leaders such as Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) , Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) is in line with expectations.
Three, 2022 Baijiu market trend is expected to be significantly divided, the stock selection requirements, we are optimistic about Kweichow Moutai Co.Ltd(600519) + Emblem Wine and Su Jiu leading. On the whole, the sector lacks overall opportunities in 2021, while the sector is more deterministic in 2022, but it is still a structural opportunity in the future. From the perspective of fundamentals, valuation and performance certainty, we are more optimistic about Huijiu and sujiu Longtou such as Kweichow Moutai Co.Ltd(600519) + Anhui Kouzi Distillery Co.Ltd(603589) , Anhui Gujing Distillery Company Limited(000596) , Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) , Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) :
1) the high-end first-line leaders shift speed, but the performance is uncertain. Kweichow Moutai Co.Ltd(600519) management improvement + structure upgrading will accelerate the release of dividends; Luzhou Laojiao Co.Ltd(000568) after the equity incentive is implemented, the profit elasticity will also be accelerated.
2) be optimistic about the sub high-end regional leaders, and mainly promote the leader of Hui liquor + Su liquor. The high-end liquor market will continue to be stable in 2029, and the high-end liquor market will continue to be {603582} through the optimization of the high-end liquor structure {0029} and {603582} in 2029.
3) after the high growth of the third tier secondary high-end investment and distribution, the base is high, and there may be “debt repayment” factors next year. We should continue to pay close attention to the dynamic sales of the terminal and be cautious.
Industry rating and investment advice: Overall, the trend of steady and steady improvement in liquor industry is maintained. The secondary high end logic is continuously fulfilled. Based on this, we maintain the recommended rating for Baijiu baijiu. Be optimistic about Kweichow Moutai Co.Ltd(600519) , Anhui Kouzi Distillery Co.Ltd(603589) , Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) , Anhui Gujing Distillery Company Limited(000596) , Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , Luzhou Laojiao Co.Ltd(000568) , Wuliangye Yibin Co.Ltd(000858) , Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , Sichuan Swellfun Co.Ltd(600779) , Anhui Yingjia Distillery Co.Ltd(603198) , Jinhui Liquor Co.Ltd(603919) , etc.
Risk tips: 1) the recovery of catering channels affected by the epidemic is lower than expected; 2) Macroeconomic fluctuations have hindered the pace of consumption upgrading; 3) Industry policy changes lead to increased competition; 4) The price of raw materials has risen sharply; 5) Focus on the company’s performance or less than expected; 6) Food safety incidents, etc. In case of any difference between the relevant data and information and the contents published by the company, the contents published by the company shall prevail.
