Resumption in 2021: the performance growth is mismatched with the optimistic expectation at the beginning of the year, and the industry valuation returns
At the beginning of 2021, the food and beverage industry rose all the way under the loose liquidity background and optimistic expectations for future performance growth, and the overall valuation of the sector once hit a historical record of more than 70 times. Since then, with the change of liquidity easing expectations and the slowdown of overall performance growth, the industry has entered the valuation digestion stage, and some companies whose brand power has been falsified have even experienced Davis double kill. By the end of November 2021, the overall valuation of the food and beverage industry had dropped to around 44x. After the passion faded, the fundamentals became the dominant factor in the plate market.
Outlook for 2022: the degree of cost transmission and the pace of consumption recovery need to be observed, but uncertainty can still be found in the future
Looking forward to 2022, the global supply chain will gradually recover from the impact of the epidemic and ease the cost pressure, or it is the consensus of most investors. At the same time, the industry is setting off a new round of price increase, and investors' optimism is gradually accumulating. However, the covid-19 epidemic not only directly inhibited the consumption scene, but also produced more far-reaching changes in consumption habits and consumption confidence. Therefore, the pace of consumption recovery next year remains to be seen. Under the background of weak consumption, whether the price increase is smooth or not will become an important indicator to test the strength of the brand. But even in the blurred future of the industry we see, There are still many uncertainties: (1) the consumption upgrading trend is still continuing, but we should not only see the pursuit of health consumption by high-end consumers, but also pay attention to the demand for relatively higher quality products in the broad market on the road to common prosperity; (2) Under the continuous impact of covid-19 epidemic, the competitive advantages of leading enterprises in supply chain, channel and management have been concentrated, the industry share has accelerated to the leading, and the brand value has been further highlighted; (3) with the changes of family structure and economic society, "single economy" and "lazy economy" Products that rise rapidly and can better balance quality and convenience will better meet the daily material consumption needs of young people.
Although changing things are more attractive because they have more possibilities in theory, certainty will be particularly scarce in a world full of too many unknowns, and the market is never reluctant to give high valuations to scarcity
Investment advice
(1) Baijiu: in addition to the most high-end liquor with the highest performance, we are looking for regional leaders who actively embrace structural upgrading or release higher performance elasticity. We recommend Jiangsu King'S Luck Brewery Joint-Stock Co.Ltd(603369) , Anhui Gujing Distillery Company Limited(000596) and Anhui Yingjia Distillery Co.Ltd(603198) ; (2) frozen food: actively recommend new capacity, and will start the channel and regional expansion of the prefabricated dishes Suzhou Weizhixiang Food Co.Ltd(605089) after landing. And Fu Jian Anjoy Foods Co.Ltd(603345) , Zhengzhou Qianweiyangchu Food Co.Ltd(001215) and Ligao Foods Co.Ltd(300973) benefiting from the general trend of standardization and scale of catering supply chain; (3) Soft drinks: focus on the sweet milk spokesperson Zhe Jiang Li Zi Yuan Food Co.Ltd(605337) who returns to the origin of "happiness" and the local leader Eastroc Beverage (Group) Co.Ltd(605499) who sits on the high prosperity track and has been deeply engaged in the field of energy drinks for many years; (4) beer: the short-term cost pressure transmission + long-term structure upgrading trend is clear, and Chongqing Brewery Co.Ltd(600132) and Tsingtao Brewery Company Limited(600600) are recommended; (5) Halogen products: there are still a large number of long tail enterprises in the 100 billion market. It is recommended to realize the Juewei Food Co.Ltd(603517) national layout step by step.
Risk statement
Demand recovery was lower than expected, the impact of covid-19 epidemic was higher than expected, consumption tax reform, etc.
