This week’s view
I. [beverage sector]:
[Baijiu]: optimistic about the market share of the March spring sugar market
Plate review: this week, the sector callback is related to the peripheral market, and basically faces the good trend. It does not change to ~2 February 21st 25. On the 5 trading day, the Shanghai and Shenzhen 300 index dropped 1.67%, the food and beverage sector dropped 3.89%, and the Baijiu sector fell by more than the Shanghai and Shenzhen 300, or 4.84%. Baijiu sector specific, gold seeds (+14.11%), Sichuan Swellfun Co.Ltd(600779) (-1.37%), Anhui Kouzi Distillery Co.Ltd(603589) (-1.62%), Anhui Yingjia Distillery Co.Ltd(603198) (-2.46%) rise and fall in the top, this week, the sector obvious callback and Russia and Ukraine conflict has a certain relationship (24 day sector sharp callback), the basic trend has not changed.
Luzhou Laojiao Co.Ltd(000568) : the completion of the incentive grant is expected to stimulate vitality, and the potential energy of the national cellar supports the continued release
The equity incentive was granted for the first time, and the final implementation plan was basically consistent with the previous content. Following the approval of the company’s equity incentive plan by Luzhou SASAC on December 2, 2012, the company announced the granting of restricted shares to the incentive objects on December 29, 2021, The grant was completed on February 20, 2022 (it was determined that December 29, 2021 was the grant date, and 6.8626 million restricted shares were granted to 437 incentive objects such as chairman Liu Miao and general manager Lin Feng at the grant price of 92.71 yuan per share), of which 428 core backbones were granted 6.1617 million shares, accounting for 79.58% of the total grant. The equity incentive plan finally implemented is basically consistent with the previous disclosure——
Sales restriction period: the sales restriction period is 24 months. If the conditions for lifting the restrictions on restricted shares are met, the restricted shares will be lifted in three batches (40%, 30% and 30%) in the next 48 months.
Assessment conditions: first, roe: not less than 22% per year from 2021 to 2023, and not less than the 75th percentile of the benchmarking enterprise; Second, the growth rate of net profit: the growth rate of net profit from 2021 to 2023 compared with 2019 shall not be lower than the 75th percentile of the benchmark enterprise; Third, the proportion of costs: from 2021 to 2023, the proportion of costs and expenses in operating revenue shall not be higher than 65%. Expenses: according to the calculation of the company, the total incentive cost of the restricted stock is 10313802 million yuan, and the amortization cost of the restricted stock from 2021 to 2025 is 33 / 3.86/3.70/1.72/71 million yuan respectively (the incentive cost will be listed in the management expenses, and the impact of the table data on the company’s financial status and operating results is the calculation data, which does not represent the final accounting cost).
Changes in the company’s share capital structure: the shares with limited sales conditions were increased from 0.02% to 0.48%. The completion of incentive grant is expected to stimulate vitality, and the potential energy of Guojiao supports the continued release. At present, the collection proportion of Guojiao exceeds 40%, the delivery proportion exceeds 30%, the Spring Festival price is stable + the moving sales is smooth + the price increase bonus is gradually released, and the company is expected to achieve rapid growth in the first quarter. In addition, Guojiao 1952, which is gradually introducing channels, is expected to increase the annual performance (the payment price is 540 yuan and the terminal price is 889 yuan). We are optimistic about the continuous release of the potential energy of Guojiao and the accelerated revival of Tequ. With the continuous battle superposition, the company is expected to maintain high growth during the 14th Five Year Plan period.
2021 Baijiu industry data: the trend of continued price reduction, Sichuan production area outstanding performance
Recently, the statistical bulletin on the development of the National Light Industry in 2021 released by the China Light Industry Federation showed that the revenue profit margin of the brewing industry in 2021 increased by 0.9 percentage points to 22.4% compared with the same period last year; Baijiu (65 fold, commodity volume) output dropped to 715.6 million liters in 2021 (740.7 in the same period in 2020), Wan Qiansheng, the trend of continuous price rise. In addition, according to the information released by the Sichuan Provincial Department of economy and information technology, in 2021, the Sichuan liquor industry achieved an operating revenue of 345.14 billion yuan, an increase of 14%, a profit increase of 24.9%, and the strong growth momentum continued in the strong producing areas.
Data update: the Kweichow Moutai Co.Ltd(600519) rating performance this week is stable and the overall inventory performance is healthy
Kweichow Moutai Co.Ltd(600519) : the wholesale price of Feitian loose bottles is about 2750 yuan, and the wholesale price of the whole box is about 3150 yuan (normal fluctuation). The price increase of series wine and non-standard wine + the release of new 1935 + the launch of Chinese Zodiac wine earlier than last year + the unplanned quota of non-standard products that dealers can implement will contribute to the ton price of the first quarter Wuliangye Yibin Co.Ltd(000858) : the price of this week is stable at 970980 yuan Luzhou Laojiao Co.Ltd(000568) : the wholesale price is about 920930 yuan. At present, the delivery has been stopped (it is expected to resume in early March). The growth target of Guojiao next year is 30%, and the overall performance of the wholesale price is stable; About 40% of the new 1952 collection.
Investment recommendations: recommend Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Anhui Yingjia Distillery Co.Ltd(603198) , Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , Shede Spirits Co.Ltd(600702) based on the current Baijiu Spring Festival refund & Shipping & marketing is near the end, the market will compare the performance of the liquor companies 22Q1, considering that the liquor sector will usher in the spring rum next month, we believe that or will usher in the stock market catalytic opportunities. In conclusion, we are still optimistic about the target performance of 22q1 performance increase + valuation with cost performance, such as: Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Anhui Yingjia Distillery Co.Ltd(603198) , Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , Shede Spirits Co.Ltd(600702) .
[beer sector]: the trend of high-end continues. We are optimistic about the implementation of price increase and promote the improvement of profit margin
Plate review: the correction of the sector this week is related to the peripheral market. The fundamental trend has not changed. From February 21 to February 25, the CSI 300 index fell 1.67%, the food and beverage sector fell 3.89%, and the decline of the beer sector is higher than that of the CSI 300, with a decrease of 4.01%. Specifically, for the beer sector, Budweiser Asia Pacific (+ 7.58%), China Resources beer (- 2.63%), Tsingtao Brewery Company Limited(600600) (- 2.81%), Chongqing Brewery Co.Ltd(600132) (- 4.64%), Beijing Yanjing Brewery Co.Ltd(000729) (- 5.51%). The significant correction in the sector this week is related to the tightening of market risk appetite, and the fundamental trend has not changed.
Chongqing Brewery Co.Ltd(600132) update: the feedback of Wusu and 1664 moving pins is good, and the Yangfan 27 plan highlights the Chinese market position
Price increase and landing + slow cost growth + controllable upward impact of cost under price lock of main raw materials, steady progress of big city plan and smooth adjustment of organizational structure. 1) Product side: ① mobile sales: the feedback of mobile sales in January is good, and there is a small peak of consumption before the Spring Festival; ② Price increase: the price increase of Wusu outside Xinjiang began in February, with a range of 4% – 8% similar to that of other products. It is expected to be completed from March to April. At present, consumers have a high acceptance of the price increase; ③ Cost: the price of barley has been locked for the whole year, and the cost locking cycle of other raw materials and packaging materials is about 2-3 months. It is expected that the cost side increase will slow down year-on-year in 22 years; ④ Large single product: in 21 years, the sales of Wusu and 1664 may increase by 34% and 36% respectively. Xiafen is the key brand of the group and plans to expand alcohol free beer. 2) Production capacity: Xichang company invested in the expansion of production capacity from 38000 tons to 130000 tons, which is expected to be put into operation from September to October this year.
3) Channel: the proportion of current drink and non current drink is 55:45, and the overall canning rate is about 18% – 20%; 4) Market: it is planned to add 15 big cities this year, hoping to connect big cities from point to line; 5) Management: Yangfan 27 plan highlights China’s market position. The group may give more decision-making autonomy to the Chinese market. E-commerce has been adjusted to an independent department, and the organizational structure adjustment has been completed at the end of last year.
Budweiser Asia Pacific update: Budweiser brand maintains a high-end leading position, and high-end and above products continue to increase
Budweiser Asia Pacific released its 2021 annual report: the annual situation in the 21st year is as follows: 1) overall: revenue / sales / ASP / EBITDA + 14.9 / 8.3 / 6.1 / 27.3% year-on-year respectively; 2) Western Asia Pacific: revenue / sales / ASP / EBITDA + 18.5 / 9.7 / 8.0 / 36.4% year on year respectively; 3) East Asia Pacific: revenue / sales / ASP / EBITDA + 1.5 / – 1.1 / 2.6 / – 5.9% year on year respectively; 4) China: revenue / sales / ASP / EBITDA + 18.0 / 9.3 / 7.9 / 28.7% year on year respectively.
The Chinese market situation is as follows: Budweiser brand has continued its excellent performance in the past 21 years, and high-end and above brands have accelerated the speed of urban development. 1) Product side: ① cost: hedge raw materials about one year in advance, and the price fluctuation of raw materials in 22 years is expected to be within double digits. ② Budweiser brand: it ranks first among China’s high-end brands. Its sales volume increased by more than 20% year-on-year in the past 21 years, with a single digit increase compared with that before the epidemic. Its revenue accounts for about 50% in China, and the sales volume of Budweiser gold bottles increased by more than 50%. ③ Other brands: the growth rate of super high-end brands exceeds 20%, the growth rate of Fujia fruit beer exceeds 100%, accounting for more than 10% of China’s Fujia sales volume, and Harbin beer has increased by a high single digit in 21 years. ④ Profit margin: the gross profit margin of super high-end brands is more than 9 times that of core brands, and that of high-end brands is more than 5 times that of core brands. 2) Channel side: in 21 years, more than 10000 stores have placed orders through the digital platform, and more than 5000 customers have carried out business on the digital platform. It is planned to promote more than 10 cities in 22h1bees and more than 60 cities in 22 years. 3) Market: ① super high-end brands: 31 expanded cities (mainly coastal and second tier cities) will increase by 30% in 21 years, and there will be more than 45 expanded cities of super high-end brands in 22 years; ② Budweiser brand: there are 50 target cities to expand in 21 years, among which the growth in cities with medium maturity and low market share (such as Xi’an and Lijiang) is more than 30%, and the target city to expand in 22 years is 70.
Investment suggestion: it is recommended to pay attention to Chongqing Brewery Co.Ltd(600132) , Tsingtao Brewery Company Limited(600600) , China Resources beer
The upgrading trend of high-end beer industry continues, and the implementation of price increase is expected to promote the improvement of profit margin. It is recommended to pay attention to the leading enterprises with high-end industry and strong price increase ability and cost control ability, such as Chongqing Brewery Co.Ltd(600132) , Tsingtao Brewery Company Limited(600600) , China Resources beer, etc.
II. [food sector]:
Sector review: the food sector fell as a whole this week
Plate growth: food processing sector fell 3.39%, of which seasoning sector fell 0.01%, dairy sector fell 2.47%, meat sector fell 3.36%.
In terms of the rise and fall of individual stocks: Yantai Shuangta Food Co.Ltd(002481) (+ 10.16%), Qianhe Condiment And Food Co.Ltd(603027) (+ 8.49%), Chacha Food Company Limited(002557) (+ 6.19%) ranked among the top three in the sector. In the meat products sector, only Zhejiang Huatong Meat Products Co.Ltd(002840) (+ 3.54%) rose slightly, Jinzi Ham Co.Ltd(002515) (- 1.11%) and Longda food (- 1.24%) decreased slightly; In the condiment sector, Qianhe Condiment And Food Co.Ltd(603027) (+ 8.49%) led the rise, Jiajia Food Group Co.Ltd(002650) (+ 3.02%) and Qingdao Richen Food Co.Ltd(603755) (+ 2.83%) followed the rise; In the dairy sector, Guangdong Yantang Dairy Co.Ltd(002732) (+ 1.06%), Lanzhou Zhuangyuan Pasture Co.Ltd(002910) (+ 0.87%), Shanghai Milkground Food Tech Co.Ltd(600882) (+ 0.62%) led the increase; In the comprehensive food sector, Yantai Shuangta Food Co.Ltd(002481) (+ 10.16%) led the rise, while Chacha Food Company Limited(002557) (+ 6.19%) and Chongqing Fuling Zhacai Group Co.Ltd(002507) (+ 4.85%) increased significantly.
Update this week: condiment section: Chongqing Fuling Zhacai Group Co.Ltd(002507) , Jiajia Food Group Co.Ltd(002650) , Qianhe Condiment And Food Co.Ltd(603027) ; Leisure snack segment: Chacha Food Company Limited(002557)
1. Condiment section: Jiajia Food Group Co.Ltd(002650) update
Company performance: 1) performance target: the equity incentive requirement for 22 years is 2 billion revenue / 200 million profit, and the internal sprint target is 30% growth at the revenue end; 2) Price increase: ① ex factory end: the price of condiments is increased by 3% – 7% (average price increase of 5%), and the price of rice and grain and oil is increased by 10% – 20%; ② Dealers: the average price increase is 10%, and the company does not subsidize the promotion expenses. The main reason is that the dealers have expectations for the price increase + the inventory of products at the original price before the price increase is not high; ③ Terminal favorable price: consumers in the area where the price has been raised have high acceptance and smooth moving sales; 3) Inventory: 1.5-2 months. The products in January are the products after price adjustment.
Large salt reduction products: 1) product features: it is positioned at the middle and high end, with a salt reduction gross profit margin of 36% (non salt reduction gross profit margin of 25%); 2) Proportion planning: about 5% in 21 years and 20% in 22 years; 3) Layout adjustment: ① channel: it is required that the dealer must attach the salt reduction single product specified by the company when picking up the goods, and the minimum assessment period of the dealer is 6 months; ② Product: the glass bottle material is adjusted to a new material with lower cost (without affecting consumers’ perception); ③ Performance evaluation: the proportion index of high gross profit products is added in the evaluation of business personnel; ④ Market strategy: the southern market focuses on the C-end, while the northern market focuses on the wholesale market, covering all channels as a whole. Development of supply chain companies: 1) development status: it mainly makes group meal market / wholesale market (Xinfadi, etc.) in the northern market, and the terminal is expected to form a monopoly advantage (competitive products have no similar layout yet); 2) Operation mode: the company signs a performance gambling agreement with the supply chain company to supply goods at a near cost price. If the performance of the supply chain company reaches the target, the company will repurchase equity to bind the interests of the supply chain party; 3) Expansion area: focus on the first and second tier markets such as Beijing, Guangzhou, Guangdong, Jiangsu and Zhejiang. Among them, Jiangsu and Zhejiang markets are mainly developed by local personnel, Guangzhou market is developed through Catering Association, northern market is developed through supply chain company, and Zhengzhou is cut in by university business.
Channels: 1) catering channels: accounting for 3% – 4% in 21 years, focusing on chain catering and industrial catering in 22 years; 2) Traditional channels: increase high margin products and improve profits, focusing on network expansion + single store improvement; 3) Special channel: promote new sales increment through live delivery, supply chain and group meal.
2. Condiment section: Qianhe Condiment And Food Co.Ltd(603027) update
The company issued the restricted stock incentive plan for 2022, and plans to grant 4.59 million restricted shares to 73 incentive objects, accounting for 0.58% of the total share capital, with the grant price of 9.79 yuan / share. At the same time, the company released the plan for non-public offering of A-Shares in 2022, and plans to raise an amount of RMB 500800 million for the “intelligent manufacturing project of seasoning with an annual output of Shanghai Pudong Development Bank Co.Ltd(600000) tons”.
1) equity incentive binds backbone interests and helps the company’s performance growth. ① Grant object: the company plans to grant 4.59 million restricted shares (accounting for 0.58% of the total share capital), and the grant price is 9.79 yuan / share. Incentive objects include 4 directors and senior managers, 69 middle-level managers and core backbone personnel of the company; ② Conditions for lifting restrictions on sale of granted shares: Based on 21 years, the corresponding revenue growth rate in 22 / 23 / 24 years is 18% / 17% / 16%, and the corresponding net profit growth rate is 50% / 27% / 21%; ③ Amortization expenses of equity incentive: 22-25 years are divided into 22.09 million yuan / 15.86 million yuan / 6.23 million yuan / 1.13 million yuan. It is expected that the improvement of the company’s performance brought by this incentive plan will be much higher than the increase of expenses brought by it.
2) the major shareholders are determined to increase, and the long-term development power is sufficient. The company raised funds for the “intelligent manufacturing project with an annual output of Shanghai Pudong Development Bank Co.Ltd(600000) tons of condiments”. The project includes 500000 tons of brewing soy sauce and 100000 tons of cooking wine. The amount raised this time is 500800 million yuan. Chairman Wu Chaoqun subscribed with his own funds at a price of 15.59 yuan / share, demonstrating the confidence of major shareholders in the long-term development of the company.
3) the short-term performance is expected to improve and the long-term growth path is clear. ① In the short term, since the Spring Festival, the company’s dynamic sales have been ideal, the terminal sales of supermarkets have reached a new high, the current inventory is at a low level, and the growth rate from January to February is expected to be higher than the annual average target. Throughout the year, the company actively adjusted, completed regional integration before the year, vigorously developed traditional channels after the year, and zero added production at parity
