Economic conference stimulate consumption, optimistic about Baijiu and popular products in mid Market
From December 6 to December 10, the food and beverage index increased by 5.5%, ranking second in the primary sub industry, outperforming Shanghai and Shenzhen 300 by about 2.4pct. Other alcoholic drinks (15.9%), yellow rice wine (10.0%) and beer (6.8%) in the sub industry took the lead. This week, the food and beverage sector performed strongly due to the expected rise in prices and the optimistic prospect of a good start. According to the “national wine time and space” According to the report, Feitian Maotai cancelled the unpacking order, and the supply of bulk Maotai liquor was transferred to the original box of Maotai liquor. It is expected that the price difference between the two will be further reduced, which is also conducive to the healthy development of the market. At the weekend, the central economic conference was held, which emphasized seeking progress while maintaining economic stability. At the same time, it also discussed the policy deployment of subdivided industries. We believe that it has positive significance for the food and beverage industry: on the one hand, in view of the contraction of demand, the central government proposed to expand domestic demand, including unblocking China’s circulation, appropriately carrying out infrastructure investment in advance, and rural revitalization, which are conducive to the release of consumer demand; Second, in view of the supply shock, we should ensure the supply, mainly for primary products such as energy and grain. It is expected that the cost pressure of the industry will be alleviated, which is conducive to the release of enterprise profits. At the same time, we also see the central government’s determination and confidence in “common prosperity”. After the national income level is improved, the demand for mass goods may be released more significantly. We put forward the industrial investment strategy in 2022, including consumption upgrading, price increase theme, rural revitalization, etc., which is also in line with the spirit of this meeting. Recently, the food and beverage sector has warmed up, and some funds have begun to layout. We are still optimistic about the investment opportunities of the food and beverage sector. We hope that the Baijiu Spring Festival will start soon. In the medium term, we will be optimistic about the performance restoration of the low base of mass goods and the elasticity of the price increase.
Recommended combination: Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) and Foshan Haitian Flavouring And Food Company Ltd(603288)
(1) Kweichow Moutai Co.Ltd(600519) the cancellation of Feitian Maotai unpacking policy is expected to narrow the price difference between original boxes and bulk bottles, which is conducive to market-oriented development. Maotai’s price increase is expected to rise. Considering the supply of base liquor, the planned revenue target is expected to accelerate in 2022. The company has room to move calmly in terms of volume and price, and the logic of volume and price rise in the future is smooth. (2) Wuliangye Yibin Co.Ltd(000858) Recently, the wholesale price has rebounded, the channel inventory is low, and the shipment is more stable than that in the early stage. Considering the changes of quotas inside and outside the plan and the promotion of classic Wuliangye Yibin Co.Ltd(000858) , it is expected to achieve double-digit growth at a high rate in 2022. (3) Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) the rapid growth shows the strong fundamentals of the company. The higher than expected point in 2021 will come from the progress of high-end products. Looking forward to the next three years, the company is still in the stage of rapid growth in revenue and performance brought by nationalization and product structure upgrading. (4) Foshan Haitian Flavouring And Food Company Ltd(603288) The price increase has a positive impact on costs and channel profits. The condiment industry is slowly repaired, and the company also shows a recovery trend. Considering the price increase, it is expected to return to the normal growth level in 2022. Proposed layout and long-term holding.
Plate Market Review: Food and beverage outperformed the market
From December 6 to December 10, the food and beverage index increased by 5.5%, ranking second in the primary sub industry, outperforming Shanghai and Shenzhen 300 by about 2.4pct. Among the sub industries, other wines (15.9%), yellow rice wine (10.0%) and beer (6.8%) took the lead. In terms of individual stocks, Hebei Hengshui Laobaigan Liquor Co.Ltd(600559) , Jonjee Hi-Tech Industrial And Commercial Holding Co.Ltd(600872) , Anhui Kouzi Distillery Co.Ltd(603589) led the increase, while Huabao Flavours & Fragrances Co.Ltd(300741) , Cabio Biotech (Wuhan) Co.Ltd(688089) , Shandong Longda Meat Foodstuff Co.Ltd(002726) led the decline.
Risk tips: economic downturn, food safety, fluctuations in raw material prices, lower than expected recovery in consumer demand, etc.
