Key investment points:
Baijiu: Wuliangye Yibin Co.Ltd(000858) management level straightened out, steady growth background Baijiu consumption has support. This week’s Wuliangye Yibin Co.Ltd(000858) change of command, Zeng Congqin served as the Secretary and chairman of the Party committee of the group company and the Secretary and chairman of the Party committee of the joint stock company; Zou Tao served as Deputy Secretary of the Party committee and general manager of the group company; Jiang Wenge served as Deputy Secretary of the Party committee, vice chairman and general manager of the joint stock company. The decision of the company’s management will greatly boost market confidence. In 2021, the Wuliangye Yibin Co.Ltd(000858) left over warehouse was well resolved. The pressure of 2022 was lighter. The stability of management will greatly enhance the team’s executive power, and it is expected to enhance the effect of Wuliangye Yibin Co.Ltd(000858) control, and it has positive effects on the overall price of Baijiu industry. During the Spring Festival, feedback from various regions showed that the overall Baijiu sales remained stable, and there was a slight difference. The travel impact caused by the spot outbreak caused some consumption scenarios to be missing. The regional market moves in Anhui and Jiangsu were higher than last year, and there were certain impacts in Tianjin, Henan and Shaanxi. At the secondary high-end price, due to the lack of some consumption scenarios, the sales volume has been affected to some extent. We believe that the adjustment of the post Festival sector has been fully reflected. Although the Spring Festival has been different from the local sales, the new social and economic development in January has reached a record high, exceeding the market expectations, showing the determination of steady growth. The subsequent economic stabilization is more important for the recovery of Baijiu consumption. It is suggested that the Baijiu sector should be allocated more actively. In the short term, there is a good return in January and a guarantee for the Baijiu Association in the spring. In the medium and long term, the trend of liquor consumption upgrading is unchanged. The Matthew effect of the industry is constantly emerging. Judging from the current valuation, Wuliangye Yibin Co.Ltd(000858) and Luzhou Laojiao Co.Ltd(000568) have only 22 years PE 28X and 33X, which have better investment value.
Beer: Catering recovers under the weakening edge of the epidemic, and actively grasp the beer beta market in 22 years. In the short term, Pfizer covid-19 oral drug was approved, and the impact of the epidemic on catering consumption is expected to weaken. 1) In the short term, Q1 is often the off-season of beer consumption, and it is expected that there will be little impact on beer performance at the sales level. In terms of subregions, Shaanxi / Henan and other places are the main sales areas of Tsingtao Brewery Company Limited(600600) , and there is expected to be some pressure on short-term dynamic sales. 2) During the Spring Festival, with China’s epidemic prevention entering the normalization of epidemic prevention + dynamic clearing, compared with previous years, the 22 year Spring Festival did not adopt policies such as large-scale flow restriction and food restriction in the hall. It is expected that the consumption during the Spring Festival is better than expected. 3) In the medium and long term, with the normalization and evolution of the epidemic, it is expected that the impact of the epidemic will be passivated phase by phase. As beer enterprises have actively responded to the recurrence of the epidemic in 2-3 years, it is expected that it will not have an impact on the business potential of heavy beer and other enterprises in the future. We believe that the beer industry is expected to enjoy the price increase dividend in 22 years. The ton price of the industry will increase by about 5% – 7%, and the marginal upward slope of ton cost will slow down, which is expected to be about 3% – 4%. Before the peak season in March, we are actively optimistic about the layout opportunities of the beer sector.
Condiment: recovery in 2022 is the main tone, supporting the overvalued value. Looking forward to 2022, the recovery of demand is the general trend, the cost is expected to decline at a high level, the channel inventory is good, the marginal impact of community group purchase is weakened, and the industry recovery is the main tone. In terms of price increase, looking back on 2021, following the implementation of Haitian price increase, Li Jinji, Jiangsu Hengshun Vinegar-Industry Co.Ltd(600305) , Jiajia Food Group Co.Ltd(002650) , Qianhe Condiment And Food Co.Ltd(603027) , Jonjee Hi-Tech Industrial And Commercial Holding Co.Ltd(600872) followed the price increase one after another. According to the tracking before the Spring Festival, Haitian’s price increase has made good progress. The terminal price support has been basically completed in some regions before the festival, and the transmission in some regions is relatively slow, which needs to be implemented after the festival. Due to the late time window of price increase of other brands, the transmission of price system is expected to be completed in succession after the year, and the implementation of price increase still needs to be tracked continuously. In terms of inventory, the industry inventory has tended to be benign before the price increase. In the follow-up, under the influence of the price increase policy and Spring Festival stock, dealers hoard goods in advance, and the rise of inventory is a normal phenomenon. After the driving of dynamic sales in peak season, it is expected to gradually fall back to the normal level. In terms of valuation, the valuation level of condiments is still high, which we believe contains the expectation of epidemic repair. After the phased impact of community group buying slowed down, the suppression of the epidemic on the fundamentals of condiments may be the main factor, including the suppression of consumption demand at the catering end and the suppression of consumption power at the residents’ end; However, the epidemic will eventually end, and the negative impact does not have long-term sustainability. It is difficult for the condiment industry to have a large impact similar to that brought by 2021h1 community group purchase, and the fundamental repair logic is still in place.
Snack food: we look forward to the recovery of consumption power after the effective prevention and control of the epidemic. Before the Spring Festival, Chacha Food Company Limited(002557) and Juewei Food Co.Ltd(603517) prices were raised smoothly, and the profitability of enterprises was improved. During the Spring Festival, the consumption of leisure food is mainly in gift boxes, with many supermarkets stacked for display, and the terminal dynamic sales are stable. If the follow-up epidemic is effectively prevented and controlled, the expected improvement of residents is expected to promote the recovery of consumption power and help the steady recovery of leisure food sector.
Frozen baking: short-term correction of stock price, fearless of long-term growth. The share price of Ligao Foods Co.Ltd(300973) has made some adjustments this week. We believe that its long-term growth is not afraid to worry. Looking forward to 22 years, the supply side capacity will continue to fall, and the sales will gradually get rid of the capacity constraints; On the channel side, except Sam, the company will conduct diversified layout in baking and catering channels; On the product side, there is still great room for improvement in cassava and frozen cake; On the profit side, on the one hand, the company benefits from the improvement of product structure, on the other hand, the price increase will be implemented, and the profit margin will be further improved in 22 years, maintaining the high-speed growth of Ligao as a leader.
Investment suggestion: Baijiu sector: high-end liquor has obvious configuration value, and the second high-end is still in the upward cycle, sticking to growth leader, real estate Baijiu benefiting from epidemic situation, focusing on Kweichow Moutai Co.Ltd(600519) / Wuliangye Yibin Co.Ltd(000858) / Luzhou Laojiao Co.Ltd(000568) / Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) / Jiugui Liquor Co.Ltd(000799) / Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) / Anhui Gujing Distillery Company Limited(000596) / Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) / Sichuan Swellfun Co.Ltd(600779) / Anhui Kouzi Distillery Co.Ltd(603589) / Beijing Shunxin Agriculture Co.Ltd(000860) . Beer sector: high end continues to accelerate, short-term sales fluctuations do not change the upward trend of performance, focusing on Chongqing Brewery Co.Ltd(600132) / Guangzhou Zhujiang Brewery Co.Ltd(002461) / China Resources beer, etc. Condiment sector: focus on Foshan Haitian Flavouring And Food Company Ltd(603288) / Qianhe Condiment And Food Co.Ltd(603027) / Jonjee Hi-Tech Industrial And Commercial Holding Co.Ltd(600872) / Jiangsu Hengshun Vinegar-Industry Co.Ltd(600305) . Dairy products sector: focus on Shanghai Milkground Food Tech Co.Ltd(600882) / Inner Mongolia Yili Industrial Group Co.Ltd(600887) / Bright Dairy & Food Co.Ltd(600597) / New Hope Dairy Co.Ltd(002946) / Mengniu Dairy industry, etc. Snack food sector: we should still focus on the main line of growth, pay attention to channel driven, and focus on Chacha Food Company Limited(002557) / Juewei Food Co.Ltd(603517) / Zhou black duck / Yanker Shop Food Co.Ltd(002847) . Frozen baking sector: under the background of rising labor costs and store rents, catalytic frozen baking dough is widely used, and the track is booming, focusing on Ligao Foods Co.Ltd(300973) / Namchow Food Group( Shanghai) Co.Ltd(605339) / Zhengzhou Qianweiyangchu Food Co.Ltd(001215) . Special liquor and beverage sector: pre mixed liquor and energy drinks are good tracks in Changpo, focusing on Shanghai Bairun Investment Holding Group Co.Ltd(002568) / Eastroc Beverage (Group) Co.Ltd(605499) and so on.
Risk warning: macroeconomic downside risk; Food safety issues; Intensified market competition; The price increase was less than expected
