1, performance bulletin and event catalyzed driving up the sub sectors of beer and baijiu. Food and beverage rose 2.97% this week, outperforming the Shanghai Composite Index (0.80%) by 2.17 percentage points. Baijiu Spring Festival season is basically over. The market is entering the vacuum period of performance. Recently, China Resources, Tsingtao beer, heavy beer and other beer leaders have made eye-catching performance forecasts, superimposed with events such as Pfizer's strengthening needle, and the beer sector has strengthened as a whole; The performance of Dongpeng performance express exceeded expectations, which also led to a slight rebound in high valuation track stocks. In addition, the gold seeds were driven by the Huarun war board and the price of the three or four Baijiu liquor rose. Specifically, beer, other alcoholic beverages, soft drinks and Baijiu were the biggest gains this week, rising by 6.46%, 3.78%, 3.60% and 3.53% respectively. In terms of individual stocks, this week Anhui Golden Seed Winery Co.Ltd(600199) led the rise, with an increase of 37.32%, followed by Gansu Huangtai Wine-Marketing Industry Co.Ltd(000995) (+ 11.55%), Anhui Yingjia Distillery Co.Ltd(603198) (+ 9.52%), Eastroc Beverage (Group) Co.Ltd(605499) (+ 9.45%), Shede Spirits Co.Ltd(600702) (+ 8.57%).
2, the end of the Baijiu season, the sector into the performance vacuum period, the market sentiment is expected to be affected by the spring festival performance, continue to look at the high-end high-end regional leader. This week Baijiu season officially ended, the impact of the Spring Festival sales and basic performance on the market has gradually been digested. As we have previously judged, this year's Spring Festival peak season was fulfilled as scheduled, the completion of payment collection of leading liquor enterprises was high, and the performance of the first quarter was guaranteed; However, from the perspective of terminal performance, sub high-end regional leaders such as Huijiu (Gujing, Anhui Kouzi Distillery Co.Ltd(603589) , Yingjia) and sujiu (Yanghe, Jiangsu King'S Luck Brewery Joint-Stock Co.Ltd(603369) ) still performed best during the Spring Festival. At present, the sector has entered the performance vacuum period (about one month from Chuntang). We believe that the market sentiment is mainly affected by the performance of the Spring Festival + the performance expectation of the first quarterly report. Considering the fundamentals, valuation, performance certainty and market expectation, we continue to be optimistic about Kweichow Moutai Co.Ltd(600519) + regional sub high-end leading liquor enterprises ( Anhui Kouzi Distillery Co.Ltd(603589) , Jiangsu King'S Luck Brewery Joint-Stock Co.Ltd(603369) , Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , Anhui Gujing Distillery Company Limited(000596) ).
3. The overall opportunity of the popular products sector still needs to wait, and select high-quality leading stocks from the bottom up. This week, Dongpeng's revenue performance exceeded expectations, driving a slight rebound in high valuation track stocks. In addition, the performance forecast of China Resources, Tsing beer and heavy beer companies was bright, and the share price also rose significantly. We believe that the opportunity of the overall sector still needs to wait. The dynamic sales of popular products in the peak season of the Spring Festival this year are good. However, due to the early spring festival, the performance is mostly included in 2021q4. After the festival, the dynamic sales return to normal, the demand side is still weak and there is no significant positive improvement. Superimposed on the high base in the first quarter of last year, the overall performance of 2022q1 is uncertain. In terms of cost, affected by the general rise in global commodity prices, the prices of many agricultural products and packaging products continued to rise after the festival: the price of soybean meal continued to rise after the year, up to 12% as of February 18, and the price of PET packaging materials continued to rise compared with the end of last year, although the price increase plans of many companies were well guided after the decline of inventory in the peak season of the Spring Festival, However, if the price of raw materials continues to rise sharply, the cost side pressure can not be underestimated. There are structural opportunities in the sector, and the logic of some sub industries is clear. We suggest paying attention to the dairy and beer sectors with high-end industry and the upgrading trend of product structure, as well as low alcohol drinks, prefabricated vegetables and frozen baking boards with rising consumption trend, broad space and low penetration. At the same time, it is suggested to pay attention to the industry leading stocks with reasonable valuation and pricing power, such as Shanghai Bairun Investment Holding Group Co.Ltd(002568) (recommended), Angel Yeast Co.Ltd(600298) (recommended), Inner Mongolia Yili Industrial Group Co.Ltd(600887) (concerned), Chacha Food Company Limited(002557) (concerned), Fu Jian Anjoy Foods Co.Ltd(603345) (concerned), etc.
4. Update of industry and company views:
(1) Wuliangye Yibin Co.Ltd(000858) : personnel adjustment is coming to an end, and we continue to be optimistic about the steady growth of the company. On February 18, Yibin Municipal People's government issued a series of job appointment and removal notices, appointing Zeng Congqin as the chairman of Wuliangye Yibin Co.Ltd(000858) group; Zou Tao is recommended as the general manager of Wuliangye Yibin Co.Ltd(000858) group; Jiang Wenge is recommended as the general manager of Wuliangye Yibin Co.Ltd(000858) Co., Ltd. It is expected that the new leadership of the company will be successfully changed, laying a foundation for the company to achieve the goal of high-quality development in the 14th five year plan. During the Spring Festival period of badaipu five, the feedback of mobile sales is good, and the dealers' Spring Festival payment collection is positive. It is expected that the company will make a successful start in the peak season. In the long run, after years of continuous growth, the company's performance base is high, so we should appropriately reduce the elastic expectation of the company's performance; At present, the demand for the company's core products is benign, and the volume continues to increase at the price of 1000 yuan. In the future, we will continue to be optimistic about the company's sustained and steady growth.
(2) Jiangsu King'S Luck Brewery Joint-Stock Co.Ltd(603369) : it is proposed to invest in the implementation of the project of expanding production and storage to ensure the higher quality development of the company. The company announced that it plans to invest in the implementation of the South plant intelligent brewing storage center project, with an estimated total investment of 9.076 billion yuan, which will be invested in five years. After the completion of the project, it is expected to add 18000 tons of high-quality Luzhou flavor original wine, 20000 tons of high-quality elegant Maotai flavor original wine, 80000 tons of semi open wine storage and 210000 tons of taotan storage; The company's koji production capacity will reach 102000 tons / year. After the completion of the project, the company's product quality and core competitiveness can be further improved in the future. The company's product structure is excellent. In the future, it will continue to enjoy the secondary high-end capacity expansion bonus. The good landing of equity incentives will also bring catalysis. We continue to be optimistic about the future growth of the company.
(3) golden seed: China Resources war Investment Bureau, which is expected to have little impact on the competition pattern in the province in the short term. The company announced on February 16 that Fuyang Investment Development Group Co., Ltd., the sole shareholder of golden seed group, the controlling shareholder of the company, plans to transfer 49% of the equity of the group to China Resources Strategic Investment Co., Ltd., a subsidiary of China Resources, by means of non-public agreement transfer. At present, the main core price band of golden seed is below 80 yuan, which has a low coincidence with Gujing, kouzi, Yingjia and other Huizhou wine leaders. Under the background of consumption upgrading in the province, growth is still under certain pressure. China Resources war Investment Bureau expects that it will have little impact on the competition pattern of Huizhou wine in the short term.
(4) Springsnow Food Group Co.Ltd(605567) : a leading enterprise in China's chicken conditioning industry. The expansion of production is imminent to help the rapid growth in the future. The company is one of the few Chinese white feather chicken processing enterprises specializing in the production and sales of white feather chicken deep-processing conditioning products. As of Q3 in 2021, the company has achieved a total revenue of RMB 1.561 billion, with a year-on-year increase of 14.42%. In the latest performance forecast, due to the sharp rise in the price of raw materials such as corn and soybean meal, which affects the rise of feed cost, the company has achieved a net profit of RMB 63-71 million in 2021, with a year-on-year decrease of 52.17% - 57.56%. The company has been deeply engaged in the field of chicken conditioning products for nearly 20 years. The entrusted breeding mode is adopted to ensure the stability of chicken source and cost, and 90% of chicken comes from self supply. At the earliest time, the company mainly exported chicken conditioning products to Japan, which is in strict accordance with the production standards imported from Japan, and the product quality is outstanding. Since 2015, the company has gradually developed China's chicken conditioning products market. By 2021, the revenue of H1 company's conditioning products will reach 506 million yuan, accounting for 51.1%, and the revenue CAGR of conditioning products from 2017 to 2020 will reach 40.5%. At present, China's chicken conditioning products market is highly fragmented, and chicken food meets the healthy consumption trend. The company has built a strong first mover advantage in products and channels. With the gradual completion of future raised and invested capacity projects (40000 tons of chicken conditioning products, 50 million broiler slaughtering, marketing network and brand promotion, etc.), it is expected to further seize the market share of chicken conditioning products and achieve faster growth.
(5) Eastroc Beverage (Group) Co.Ltd(605499) : revenue maintained high growth, and channel products helped high growth. This week, the company released a performance express, benefiting from the smooth national expansion of channels, the continuous large volume of large single products, the advance of the Spring Festival and other factors, and achieved a revenue of 1.418 billion in 2021q4, the same as + 54.95%. The profit side was mainly due to the increase in the cost of freezers and the rise in the cost of raw materials, and the growth rate slowed down. Energy drinks are still in the stage of rapid development. Red Bull, the industry leader, is still limited. Trademark disputes have stalled, which is good for local enterprises. Dongpeng special drink still has a large blank market outside the province. The large single product 500ml gold bottle maintains a high increase. After the Spring Festival, Zero sugar products are expected to be promoted to the whole country. The gas filling series is also expected to launch a variety of flavors to create a "energy +" product line to cover more demand, and the contribution income of new products can be further increased. The company's 2021h1 sales network has covered about 1.79 million terminal stores across the country, with rapid growth. Compared with red bull, there is still broad space for long-term growth.
(6) Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) : the management team is stable, the strategic goal is firm, and the company is optimistic about its revitalization. Since taking office, chairman yuan has fully demonstrated a pragmatic style and open attitude, fully affirmed the past achievements in many exchanges, and repeatedly stressed that he will maintain the continuity of the company's strategy and team. At present, the team echelon structure is good. In terms of product layout, the company will focus on structural adjustment, continue the strategy of "controlling glass Fen and pulling out medium and high", and change from series to large single products. In terms of market layout, the company will continue to move towards the goal of nationalization and focus on "three sectors", in which the bases (Shanxi + Beijing Tianjin Hebei + Henan Shandong + Shaanxi and Inner Mongolia), East China (Jiangsu, Zhejiang, Shanghai and Anhui), South China (Guangzhou, Shenzhen + Jiangxi + two lakes) are managed by experienced business leaders. After the rapid development of Fenjiu from 2017 to 2021, the performance base and market expectation are at a high level. The leadership has repeatedly emphasized risk awareness and high-quality development in their speeches. We are optimistic that the company will move towards rejuvenation under the leadership of the new chairman and the unremitting efforts of the team, and lead the "great fragrance era".
(7) Shede Spirits Co.Ltd(600702) : the performance falls in the middle of the forecast and still needs to keep up with the dynamic sales performance in the future. The company released the performance express. In 2021, the operating revenue was 4.97 billion yuan (the same as + 83.8%), and the net profit attributable to the parent company was 1.25 billion yuan (the same as + 114.4%). The performance fell in the middle of the previously announced performance forecast. Q4 company is expected to maintain the normal cost investment level in 2021. The sub high-end price band of the company's product card position realizes high elastic growth through investment promotion and distribution, and will still benefit from the expansion of the sub high-end trend in the future. However, after the channel is gradually stabilized, it is necessary to closely track the actual sales.
5, industry rating and investment strategy: Overall, the trend of steady and steady improvement of Baijiu industry is maintained. The price increase of popular products has brought marginal improvement to the performance of the sector. In the long run, the market share is expected to continue to focus on leading enterprises. After the valuation falls, the investment value of leading enterprises is highlighted. Based on this, we maintain the rating of the food and beverage industry as "recommended".
Baijiu: Kweichow Moutai Co.Ltd(600519) (recommended), Anhui Kouzi Distillery Co.Ltd(603589) (recommended), Jiangsu King'S Luck Brewery Joint-Stock Co.Ltd(603369) (recommended), Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) (concern), Anhui Gujing Distillery Company Limited(000596) (concern), Luzhou Laojiao Co.Ltd(000568) (attention), Wuliangye Yibin Co.Ltd(000858) (recommended), Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) (recommended), Sichuan Swellfun Co.Ltd(600779) (recommended), Anhui Yingjia Distillery Co.Ltd(603198) (attention), Jinhui Liquor Co.Ltd(603919) (Guan Zhu) and so on.
Popular products: Shanghai Bairun Investment Holding Group Co.Ltd(002568) (recommended), Angel Yeast Co.Ltd(600298) (recommended), Inner Mongolia Yili Industrial Group Co.Ltd(600887) (concerned), Fu Jian Anjoy Foods Co.Ltd(603345) (concerned), Ligao Foods Co.Ltd(300973) (recommended), Foshan Haitian Flavouring And Food Company Ltd(603288) (concerned), Chongqing Brewery Co.Ltd(600132) (concerned), Chacha Food Company Limited(002557) (concerned), etc.
Short term recommendations Kweichow Moutai Co.Ltd(600519) , Anhui Kouzi Distillery Co.Ltd(603589) , Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , etc.
6. 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.
