Scenario recovery is an important investment line in the food and beverage sector. The fundamentals of the food and beverage sector in 2022 show the characteristics of weakening wealth effect and recovery of consumption scene. The sub sections benefiting from the scenario recovery are expected to show a sustained upward boom, and may be able to find more investment opportunities under the background of pessimistic economic expectations.
Compared with macroeconomic expectations, the recovery rhythm of the scene that can be effectively tracked has more reference value. The government has always emphasized stabilizing the economy and introduced various policies to reduce taxes and encourage consumption. We believe that scenario recovery is not only an important link to promote consumption, but also an important starting point. Consumption is the result of consumption ability and willingness and the post cycle of economic activities. When the reality is weak and the expectation is pessimistic, it is difficult to encourage consumption or achieve the expected effect. In the early stage of the epidemic, some consumption was suppressed due to scene restrictions. Such demand is rigid. Therefore, after the implementation of precise control, the orderly recovery of consumption scenes is expected to activate more rigid consumption. Therefore, compared with macroeconomic expectations, the scene recovery rhythm that can be effectively tracked has more reference value. Therefore, the research of consumption scenario is extremely critical.
In 2020 and 2021, the wealth effect and consumption scenario will alternately affect the industry fundamentals. When the 20Q1 epidemic just happened, the consumption scenario was seriously damaged. At that time, only some necessities such as rice, flour, grain and oil had strong demand. However, the consumption of Baijiu, beer, dairy and other consumer products disappeared basically, and Moutai’s investment and gift were less affected. After 21q1, the scenario recovery was accompanied by economic stimulus to improve the fundamentals of the sector, and loose liquidity to stimulate the economy, resulting in asset appreciation and wealth growth. Correspondingly, the food and beverage sector showed a phenomenon that the high-end was getting better and better while the mass products were under pressure. In 2022, the monetary policy is sound, the marginal wealth effect is weakened, and the scene continues to recover, which is expected to release such pent up demand.
Different categories have different dependence on the scene, and the recovery rhythm and elasticity are different. Take Baijiu as an example, high-end liquor has financial and gift attributes, and its dependence on consumption scenes is low, while its correlation with wealth effects is relatively high. In 2020, demand accelerated after expansion of assets, represented by old Moutai, Baijiu and other categories. Second, most high-end Baijiu consumption groups are upgraded business banquets and other scenes, which are relatively restricted, benefiting from the wealth effect, and the expansion of sub high end groups is faster. Regional Baijiu, which is mainly consumed by the masses, has a high degree of dependence on the scene, consumption climate and population. After the implementation of the policy of local festivals and strict control, sales volume is seriously damaged. The Spring Festival is a window period for the centralized recovery of consumption scenes. Therefore, the overall prosperity of regional wine is high.
In the long run, consumption upgrading has always been the main theme of the sector. Looking forward to the year, the recovery of consumption scene may continue to bring surprises. Based on the effective control of the epidemic and the implementation of precise prevention and control policies, we are optimistic about the recovery of the scene. Accordingly, the sub category of the scenario dependent on the sector is benefited from this, and is expected to achieve high prosperity. We are optimistic about the sub sectors of regional Baijiu, sub high end, beer, food and beverage supply chain (such as braised flavor, seasoning, quick frozen, prefabricated vegetables, etc.) and snacks. Its investment rhythm is also related to the sequence of scenario recovery.
Investment strategy: (1) liquor, continue to recommend the regional scene of the revival of the Baijiu, such as Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) , Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , Anhui Gujing Distillery Company Limited(000596) , Anhui Kouzi Distillery Co.Ltd(603589) , etc., the second high-end has the scene to improve the logic of the ring, the current valuation has highlighted the cost performance, and continuously recommend Shede Spirits Co.Ltd(600702) , Sichuan Swellfun Co.Ltd(600779) , Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , Jiugui Liquor Co.Ltd(000799) , etc., and continue to recommend high-end; Baijiu; (2) In terms of popular products, it is recommended that the performance elasticity brought by catering recovery and subsequent price increase and cost reduction be observed. It is recommended that sub sections such as beer, condiment, marinated flavor and quick freezing be included, with specific targets such as Tsingtao Brewery Company Limited(600600) , Chongqing Brewery Co.Ltd(600132) , Qianhe Condiment And Food Co.Ltd(603027) , Foshan Haitian Flavouring And Food Company Ltd(603288) , Juewei Food Co.Ltd(603517) , Fu Jian Anjoy Foods Co.Ltd(603345) .
Risk warning: the impact of the epidemic may be repeated; Demand recovery is not strong enough; Food safety issues, etc
