Baijiu week tracking: this week, the first week after the commencement of the holiday, the returning crowd has basically returned to the workplace. As the overall inventory is low, the price remains basically stable. Kweichow Moutai Co.Ltd(600519) : 1) at present, the 2022 contract has not been signed, a new batch of payment has not been started, and the marketing plan is not clear. We expect that the future marketing system reform is expected to exceed expectations. In January this week, the outstanding goods have been completely delivered and cleared, the dealer has basically zero inventory, the terminal inventory is less than one month, the vintage wine has not been delivered nationwide, and the self-supporting store is the only supply channel. Therefore, the wholesale price of classic products has increased as a whole: the wholesale price of bulk bottles of Feitian has increased by 30 yuan to 2780 yuan around the week, and the wholesale price of Maotai for 15 years has increased by 150 yuan to 7450 yuan around the week (the transaction price has been above 7600). The price of new products fell after the hype period: Tiger grass fell from the highest point of nearly 8000 yuan to about 4500. Although the treasure fell from the high point of 7000, it is still in the price band of 6000 + and Maotai 1935 fell to about 1600. We expect that with the normal supply, the price of Maotai 1935 should be in the range of 1300-1500. 2) According to the temporal and spatial information of Maotai, the Fourth Party committee (expanded) meeting of 2022 was held in Maotai on February 9, which pointed out that the sales momentum of Maotai liquor was good and the market was booming during the Spring Festival; The sales of Maotai flavor liquor series increased significantly. Wuliangye Yibin Co.Ltd(000858) : the wholesale price in most regions is stable, and the purchase price in some regions has decreased by about 10 yuan around the week. At present, the inventory has not changed significantly compared with last week. The dealer’s inventory is about 40 days, which is generally benign. Henan, East China, Beijing and Sichuan all reported that Wuliangye Yibin Co.Ltd(000858) Spring Festival dynamic sales were good. Luzhou Laojiao Co.Ltd(000568) : according to the micro wine information, Guojiao sales company will suspend the acceptance of Guojiao 1573 orders and delivery from January 25 to March 1. At present, the dealer’s inventory is less than one month, and the wholesale price is stable at about 920 yuan. Channel feedback: during the Spring Festival, heigai Luzhou Laojiao Co.Ltd(000568) focuses on the catering channel and focuses on the dining scene of young consumers. It has a good reputation for the quality of light bottle wine and hot sales at the terminal.
Anhui Gujing Distillery Company Limited(000596) : the dynamic sales of money collection are strong, and Gu 20 wins with strength. 1) The promotion of mobile sales is positive, and the heat is expected to continue. According to the feedback of channel research, Anhui Gujing Distillery Company Limited(000596) closed the account in September last year. The overall payment during the Spring Festival this year exceeded expectations, and the willingness of terminal goods preparation before the festival is positive. The performance in the first quarter is expected to reduce the pressure on the performance of the whole year, thus forming a virtuous circle. At present, the terminal inventory is less than one month, and the dealer inventory is also slightly lower than that in previous years. After the festival, the dealer inventory is expected to continue to flow to the terminal to further optimize the dealer cash flow. We believe that there are two main reasons for the higher than expected payment: on the one hand, it is because the economy of the Yangtze River Delta is strong and less affected by the epidemic; On the other hand, Anhui is less affected by the epidemic, the return passenger flow has recovered significantly year-on-year, and the demand for gifts and banquets at the middle and high-end and sub high-end in Anhui has recovered strongly. The demand for wedding banquet is still under the control of the epidemic for the time being, but it is relatively rigid from the perspective of the whole year. Since last year, the wedding banquet has been transferred to other holidays and daily weekends. It is expected that the demand for wedding banquet during the Spring Festival is expected to be supplemented after the festival. Therefore, we judge that this year’s terminal heat will last longer than 2019, that is, it is expected to continue to maintain active sales after the 15th day of the first month. 2) Both supply and demand sides jointly promoted structural upgrading, and the proportion of gu8 + increased significantly. According to the grassroots research feedback, since this year, the sales assessment and brand promotion have turned to products above gu8. After the strict price control in the second half of 21, the channel profit of the Spring Festival in 22 has been guaranteed, the profit margin of secondary high-end products is high, and the channel thrust is sufficient. Gujing’s sub high-end product strategy is relatively successful. During the Spring Festival, gu5 and gu8 remain stable and rising as a whole, while gu16 and GU20 in Hefei are in large quantities. The daily consumption attribute of gu16 is strengthened, the demand before and after the festival is strong, and the demand for banquets is significantly increased; The overall performance of GU20 in Anhui is stable, the consumption before the festival is hot, and its recognition in the gift market is significantly improved. We expect that the proportion of gu8 and above products in channel sales has increased year-on-year, and the continuous upgrading of product structure is expected to accelerate the improvement of the company’s profit margin. 3) The price of Spring Festival is stable, and advertising promotes the improvement of brand power. According to the channel survey, the rated prices of Gu 30, Gu 26, Gu 20, Gu 16, Gu 8 and Gu 5 are about 1200, 750, 530 / 490, 360 / 330, 210 and 115 yuan respectively. Under the high-volume pressure test in the peak season, the price is basically stable compared with the end of last year. During the Spring Festival, the advertising of the Spring Festival Gala of China Central Television, Anhui and Jiangsu boosted Gujing’s brand strength and contributed to the implementation of the development strategy around Anhui. Compared with last year, many stores reported that consumers’ recognition of Gu 16 and Gu 20 has gradually increased, and the performance of gift after the festival and Gu 5 in the middle price band has also improved, which is likely to return to positive growth this year.
Beer: Spring Festival sales are good, Carlsberg sail 27 can be expected. (1) According to the Qingdao Municipal Bureau of industry and information technology, Tsingtao Brewery Company Limited(600600) started on the fourth day of the ninth lunar new year, producing 11000 kiloliters of beer during the Spring Festival, with a year-on-year increase of more than 200%; According to the daily economic news, Guangzhou Zhujiang Brewery Co.Ltd(002461) 2022 year to date sales have increased slightly over the same period last year; According to the feedback of channel research, the sales volume of leading Tsingtao Brewery Company Limited(600600) achieved median single digit growth in January. On the whole, except for Shaanxi and other provinces where the epidemic situation is repeated and obvious, beer sales in most areas perform well in the peak season of the Spring Festival, mainly benefiting from: first, the Spring Festival in 2022 is ahead of the peak season and goods are prepared in advance; Second, with the normalization of prevention and control, this year’s Spring Festival prevention and control is more rational and scientific, the one size fits all phenomenon is reduced, and the current drinking channels are increasing. (2) Carlsberg group achieved a sales volume of 14.22 million kiloliters in 2021, with a year-on-year increase of 9.3%, including 11.96 million kiloliters of beer, with a year-on-year increase of 8.6%. In 2021, the group achieved an organic growth of 10% in revenue and 12.5% in operating profit. In terms of sub brands, the sales volume of Lebao increased by 17%, Carlsberg increased by 5%, triumph 1664 white beer increased by 24%, Greenberg decreased by 3%, and the sales volume of summer fruity wine increased by 10%. The sales volume of fine brewing and specialty beer increased by 15%, the sales volume of non-alcoholic beer increased by 17%, and the medium and high-end beer maintained a faster growth and continued to promote high-end. At the same time, Carlsberg group put forward the sail 27 plan. In the next five years, the organic compound growth rate of revenue will remain 3% – 5%, and the organic growth rate of operating profit will exceed that of revenue. The group pays special attention to China in the Asian market, will pay attention to the expansion of new retail, e-commerce and other new channels, and accelerate the planned expansion of big cities.
Chongqing Brewery Co.Ltd(600132) : Q4 performance exceeded expectations, and the revenue per ton of wine increased steadily. The company achieved a revenue of 13.119 billion yuan in 2021, with a year-on-year increase of 19.90%; The net profit attributable to the parent company was 1.166 billion yuan, a year-on-year increase of 38.82%; The net profit attributable to the parent company after non deduction was 1.143 billion yuan, a year-on-year increase of 76.14%. Among them, the revenue of 2021q4 was 1.933 billion yuan, a year-on-year increase of 1.08%; The net profit attributable to the parent company was 122 million yuan, up from – 07 million yuan in the same period last year; The net profit attributable to the parent company after non deduction was 117 million yuan, up from – 19 million yuan in the same period last year. (1) In 2021, Chongqing Brewery Co.Ltd(600132) sales increased by about 15% year-on-year to 2.79 million kiloliters, mainly benefiting from the large volume of high-end single products such as Wusu and 1664 and the development of big city strategy. Among them, the sales volume of 2021q4 was 370300 kiloliters, with a year-on-year increase of – 2.67%, mainly due to: first, the epidemic has been repeated and obvious since the fourth quarter, causing a great impact on the current drinking channels; Second, after the 2020q4 epidemic situation in Xinjiang recovers, the sales base is high.
In 2021, the company’s revenue per ton of wine increased by 4.26% year-on-year to 4707 yuan / kiloliter, of which the revenue per ton of wine in 2021q4 increased by 3.85% year-on-year to 5219 yuan / kiloliter, still maintaining a steady upward trend, mainly benefiting from the continuous high-end strategy. (2) The profit of 2021q4 company turned around. We believe that it is mainly due to the pressure on the overall sales of the industry under the background of strong and repeated epidemic, and the company appropriately reduced the cost. At the same time, the company continued to promote the organizational structure optimization project and carried out the savings brought by the operation cost management project, which offset some of the adverse effects brought by the rising cost. As the cost pressure of the company is gradually relieved, it is expected to be reflected in the cost increase.
There is a strong demand for dairy products during the Spring Festival, and high-end products are just needed for gifts, with better performance. According to the channel and grassroots research, the sales of Yili and Mengniu normal temperature products increased by double digits in January and during the Spring Festival, among which the growth rate of high-end white milk (Jindian, terensu) and high-end yogurt (amushi, Chunzhen) was higher. Many channels have reported that the channel inventory is low and the terminal high-end products are out of stock. We believe that this is mainly due to the stronger local spring festival atmosphere last year and more people returning home for the festival this year. Therefore, the demand for visiting and gift giving has increased year-on-year, which has catalyzed the booming demand for high-end dairy products. Channel feedback has sufficient confidence in the target of 2022. From the perspective of cost allocation, the channel feedback cost allocation is still in a rational state, and shuanglongtou did not increase sales promotion and other actions. On the whole, we believe that the demand for dairy products in the post epidemic era shows the characteristics of rigidity and stability, the high-end trend remains, and the rational competition pattern is expected to be maintained under the background of the rising cost of raw milk.
The price rise tide of popular products has not ended, and Master Kang instant noodles and Weilong announced price increases. According to the food industry news, Weilong has issued a notice on the price adjustment of some products, and the new price will be implemented on February 1, 2022. The warehousing and code scanning rebate will be implemented in accordance with the company’s system. Meanwhile, the retail price of Master Kang’s “classic bag noodle series” was adjusted from 2.5 yuan / bag to 2.8 yuan / bag, officially opening the price rise. According to the announcement, the average increase in the prices of Japanese noodles and Japanese noodles will take effect from May 2021, and the average increase in the number of Chinese cups and Chinese bowls of instant noodles will take effect from May 2021. The track where instant noodles and snacks are located has strong product homogeneity, fierce competition and difficult price increase. The joint price increase of Weilong, Master Kang and other brands may effectively hedge the cost pressure. At the same time, it has far-reaching significance for the overall upgrading and structural changes of the industry.
Recommended combination in February: Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Chongqing Fuling Zhacai Group Co.Ltd(002507) , Juewei Food Co.Ltd(603517) , Anhui Gujing Distillery Company Limited(000596) , Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) . The rise and fall in the month were Juewei Food Co.Ltd(603517) (- 3.02%), Chongqing Fuling Zhacai Group Co.Ltd(002507) (- 2.47%), Kweichow Moutai Co.Ltd(600519) (- 1.96%), Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) (- 1.75%), Wuliangye Yibin Co.Ltd(000858) (0.64%), Anhui Gujing Distillery Company Limited(000596) (13.75%), and the portfolio yield was 0.87%. Over the same period, the Shanghai Composite Index fell – 2.29%, and the portfolio rose 3.15% higher than the Shanghai Composite Index.
Investment strategy: the layout is at the right time. Our main recommendation lines mainly focus on the following directions: (1) strong HENGQIANG’s steady income companies: recommend Maotai, Wuliangye Yibin Co.Ltd(000858) , Luzhou Laojiao Co.Ltd(000568) , China Resources beer, Tsingtao Brewery Company Limited(600600) , Foshan Haitian Flavouring And Food Company Ltd(603288) , Chongqing Brewery Co.Ltd(600132) , Chacha Food Company Limited(002557) , Chenguang Biotech Group Co.Ltd(300138) and other sub industry leaders; (2) high growth companies with fast expansion in the industry: recommend prefabricated vegetables, quick frozen industry, sub high end Baijiu, cheese industry, Fu Jian Anjoy Foods Co.Ltd(603345) , Apple Flavor & Fragrance Group Co.Ltd(603020) , Ligao Foods Co.Ltd(300973) , etc. (3) Companies with cycle reversal and dilemma reversal: epidemic cycle recovery, recommended Juewei Food Co.Ltd(603517) , Chongqing Fuling Zhacai Group Co.Ltd(002507) , Sichuan Teway Food Group Co.Ltd(603317) , Haidilao, leader of oil enterprises, leader of meat products, etc. it is recommended to pay attention to Yihai International; It is expected to accelerate after adjustment. It is recommended to pay attention to Anhui Yingjia Distillery Co.Ltd(603198) , Shede Spirits Co.Ltd(600702) and Zhou Heiya. For detailed recommendation logic, see strategy for 2022: price recovery is expected to accelerate the release of performance.
Risk tips: the risk of global and Chinese epidemic spread, the risk of large outflow of foreign capital, sauce and wine inventory and policy.
