The structure of Su liquor continues to upgrade, with excellent pattern and sufficient potential
1) Jiangsu Baijiu consumption ability is strong, price belt continues to upgrade. Jiangsu has a developed economy and its residents’ consumption capacity ranks among the top in the country. Economically developed and dynamic, Jiangsu has also attracted a large number of migrant workers. In 2020, the migrant population accounted for 7.08% of the permanent population. Thanks to the rapid economic development, the consumption capacity of residents has been continuously improved. The scale of Jiangsu Baijiu market has risen from 40 billion 500 million yuan in 2017 to 43 billion 200 million yuan in 2019, ranking second in the whole country, after Henan. In addition, from the perspective of price band distribution, the high-end and sub high-end price bands continued to expand, and the corresponding share of medium and low-end liquor continued to be eroded.
2) pattern: Yanghe and Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) duopoly, with great differences between the north and the south. Jiangsu’s high-end, second and middle and low grade Baijiu sales accounted for about 25%, forming a barrel structure, the mainstream of mass consumption is upgrading, and the secondary high-end prices are moving upward. Yanghe and Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) have become two strong brands in the province. There are great differences in economic foundation and consumer culture among regions in Jiangsu. The excellent market structure of Jiangsu mainly lies in the strong consumption capacity of the southern Jiangsu market, which forms a strong support for the sub high-end and high-end price belt of the province, while the contribution potential of the central and Northern Jiangsu regions to the medium and high price belt has yet to be released.
2) growth: a market that is good at innovation and can continuously educate consumers. Jiangsu Baijiu liquor is a vibrant market in general, such as the Yanghe River blue classic, 6+ reform and V9’s elegant and elegant sauce. Su liquor is good at creating new concepts, new things and new price bands, and achieves its set goals through manufacturer marketing and consumer education. With the improvement of consumers’ brand autonomy, winning consumers’ minds has become particularly important. Through group purchase, Su liquor can better maintain the consumer population and educate consumers, so as to finally win long-term competitive advantage by occupying the minds of consumers.
Jiangsu Spring Festival sales feedback: the consumption scene recovers, and the potential energy of puwu, mengliu + and Sikai is strong. Overall, there is no epidemic situation in Jiangsu, which affects the continuous recovery of consumption scenes. The overall sales before the festival are booming, and there is still a strong consumption atmosphere after the festival driven by returning home and returning to work. Some super high-end (aged Maotai) and price rising varieties (Guojiao) have flat performance, and the overall dynamic sales of puwu with stable or slightly affordable price are more than 20%. Jiangsu’s long-standing ability to educate consumers and cultivate new products was verified during the Spring Festival. Mengliu + and Guoyuan Sikai performed well, and V3 and crystal dream also improved significantly.
Investment advice: we maintain Jiangsu as the strongest baijiu. α Judging from the region, as a province with population inflow, with the advent of rework tide and active business activities, it is expected to remain active in the off-season after the festival. The two leading enterprises in the province have their own attractions, among which Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) maintains high elastic growth and Yanghe has improved significantly. Driven by incentives, both enterprises have strong performance and release power, and continue to recommend Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) and Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) .
Risk warning: economic downside risk; Market systemic risk; Repeated outbreaks and weak recovery; Sample selection deviation risk; Industry competition intensifies risks.
