key investment points:
1. The impact of price increase on performance will be reflected in Q2 ~ Q3 next year;
2. The impact of community group buying on the price system is becoming weaker and weaker;
3. The dynamic sales situation has improved and the age of goods has gradually narrowed;
4. As the price of raw materials rises, enterprises actively respond.
financial Associated Press (Chengdu, reporter Su Qitao) news, China's rapid economic development and the continuous improvement of urbanization rate drive the increase in the demand for condiments at the family and catering end. There are a lot of water and fish at the track. The market is generally optimistic about the continuation of the prosperity of the condiment industry. However, since 2021, under the influence of the epidemic, the channel has been under high inventory pressure, the terminal demand is weak and the raw material cost continues to rise, resulting in pressure on the overall performance of the industry.
At the end of the year, the associated press of Finance and economics learned from various research interviews that with the end of the price increase of the leading enterprises, the community group purchase has been gradually standardized, the age of channel goods has steadily decreased, and the fundamentals of the condiment industry are gradually improving. Insiders and analysts told the financial associated press that under the premise of controllable epidemic situation, the condiment industry is expected to recover, the demand for catering and C-end is expected to recover next year, and the price increase is expected to be transmitted to the profit end in q2-q3 next year.
release performance elasticity in the next year
In 2021, Shenzhen Agricultural Products Group Co.Ltd(000061) raw materials and packaging materials prices rose sharply, affecting the gross profit of condiment enterprises. Taking soy sauce as an example, its raw materials mainly include soybean, wheat and white granulated sugar. According to the data of the National Bureau of statistics, the price of wheat (national standard third class) was 2474.9 yuan / ton and 2830.5 yuan / ton respectively in early January and mid December 2021, with an increase of 14.37% during the year; Soybeans (soybeans) were 5112.0 yuan / ton and 5533.9 yuan / ton, an increase of 8.25% during the year.
At the same time, the price of packaging materials also increased significantly. The price of corrugated paper (high strength) in early January and mid December 2021 were 3805.2 yuan / ton and 4532.1 yuan / ton respectively, with an increase of 19.10% during the year.
In this context, in October this year, Foshan Haitian Flavouring And Food Company Ltd(603288) took the lead in raising prices, followed by Jonjee Hi-Tech Industrial And Commercial Holding Co.Ltd(600872) (600872. SH), Jiajia Food Group Co.Ltd(002650) (002650. SZ), Jiangsu Hengshun Vinegar-Industry Co.Ltd(600305) (600305. SH), Qianhe Condiment And Food Co.Ltd(603027) (603027. SH).
(list of price increases of condiment enterprises, sorted out by the financial Associated Press)
Industry analysts told the financial associated press that generally speaking, the price increase of condiment enterprises has a transmission period of 1-3 months, which can be transmitted to the terminal in about 3 months. The price increase is highly accepted by channels and terminals. According to the historical price increase of the enterprise, the performance of the next year is good. It is expected that the price increase of relevant companies can be reflected in the profit side in q2-q3 in 2022.
Jiajia Food Group Co.Ltd(002650) also said during the survey, "the price transmission of the company's products is good, because the general price increase of soybean raw materials this year is a well-known matter, and the industry has generally raised the price, and the dealers have certain psychological expectations. Our price increase also takes into account the acceptance of consumers, which will not have a great impact from the perspective of consumers."
For the price trend of raw materials next year, a food and beverage analyst of a securities firm told reporters that it is unlikely that the price of raw materials will fall sharply next year, and the probability will remain high and volatile. The upward pressure on commodity prices may not be reduced until the second half of 2022. Industry insiders interviewed by reporters said that the epidemic has been repeated, and it is expected that the price of raw materials will be high next year.
The financial Associated Press reporter noted that in addition to raising prices, condiment enterprises also actively respond to cost pressures. Qianhe Condiment And Food Co.Ltd(603027) the relevant person in charge told the financial associated press that at present, the cost of raw materials is still running at a high level. The company has taken a variety of measures to reduce procurement costs, improve output efficiency, improve quality and efficiency in an all-round way and hedge cost pressure.
Jonjee Hi-Tech Industrial And Commercial Holding Co.Ltd(600872) relevant people also replied to the reporter that the company takes targeted cost control measures according to different material characteristics. The company will pay attention to the changes of bulk raw material market in time, and timely adjust the procurement frequency or batch procurement strategy to cushion the cost pressure when the price rises; At the same time, by actively tackling key technical problems and developing high-quality alternative suppliers or substitutes on the premise of ensuring quality, the company will reduce the risks caused by the rise of raw material prices through various means.
the dynamic pin is good and the chain age is narrowed
In 2020, the condiment industry as a whole is facing a situation of high production and poor sales, supply and demand. The channel inventory of each company continues to be high. In the second half of the year, especially Q3, all enterprises accelerate the inventory clearing. After grassroots research before and after the national day, the reporter of the financial Associated Press continued to track the dynamic sales of condiment terminals. It was found that the goods age of each enterprise was significantly narrowed, and the current inventory is relatively benign. The above industry analysts also said that according to their recent channel research, the dynamic sales of enterprises have improved month on month, and the inventory of condiment enterprises is in a more reasonable state.
The financial associated press recently visited a number of large supermarkets in Chengdu, including Yonghui, Wal Mart and Carrefour. In terms of soy sauce, the average stock age of Haitian, Qianhe, Li Jinji and Chubang mostly falls between February and April, and Jiajia, Haitian and Chubang occasionally have products aged more than 6 months. Before and after the national day, the age of soy sauce of various brands mostly falls between March and April. Qianhe, Haitian and Zhongba all have products with a age of more than 8 months.
In terms of vinegar, the average age of Hengshun, Qianhe and Haitian mostly falls between 3-3.5 months, while that of Baoning is only 2 months. Before and after the national day, the average age of Hengshun, Qianhe, Baoning and Haitian is about June, April, March and March.
From the perspective of promotion, the overall promotion is weak, and the promotion of various brands mainly focuses on direct discount of single products, full reduction of brands or bundle sales. Taking Qianhe as an example, it has Qianhe brand (soy sauce, vinegar, cooking wine and other sauces) minus 10 yuan for more than 50 yuan. Haitian has delicious and Baoning vinegar.
Of course, at the end of the year and the beginning of the year, it can be predicted that the promotion of various brands will increase. Qianhe Condiment And Food Co.Ltd(603027) the relevant person in charge told reporters that the end of the year and the beginning of the year are the peak sales season of condiments. The company actively organizes production, ensures product supply, organizes corresponding sales and promotion activities in combination with various channels and markets, orderly participates in market competition and strives to improve market share. Jonjee Hi-Tech Industrial And Commercial Holding Co.Ltd(600872) relevant people also said that the company will increase promotion in the peak sales season at the end of the year.
terminal demand is gradually restored
A major reason for the improvement of mobile sales month on month is the gradual recovery of correct consumption. Xinda securities research report pointed out that from the perspective of consumer demand, China's condiment market demand mainly comes from catering channels, family channels and food processing channels, accounting for 56%, 30% and 14%, and the catering end is the largest market demand of the condiment industry. However, the repeated epidemic situation and the recession of the catering market have a great impact on the demand for condiments.
The above industry analysts told reporters, "The two important consumption areas of condiments are the family side and the catering side. The judgment of demand is mainly based on the judgment of the epidemic situation. Personally, I think I can be a little optimistic about the epidemic situation next year. On this basis, we judge that the long suppressed consumer demand next year is expected to be released, the overall catering will be better than this year, and the demand for condiments at the catering side will pick up. At the same time, it will disappear in 2021 The overall weakness of fees and the brutal growth of community group buying have disturbed the price of condiments and affected the profits of enterprises. However, from the current situation, with the gradual introduction of policies and regulatory norms, the phenomenon of low-price dumping of community group buying has gradually decreased, the industry has gradually standardized, and condiment enterprises also take the initiative to embrace community group buying, which may price dealers to straighten out channels. With the recovery of the economy, the demand for C-end condiments gradually recovered. "
Qianhe Condiment And Food Co.Ltd(603027) the relevant person in charge also believes that the impact of community group buying on various channels will continue, but the impact will be marginal. It is expected that the terminal demand will recover slightly next year.
The financial Associated Press reporter noted that since August this year, the growth rate of total retail sales of social consumer goods has gradually stabilized and consumer demand has improved. According to the data of the National Bureau of statistics, the total retail sales of social consumer goods from January to November this year was 39955.4 billion yuan, a year-on-year increase of 13.7%, an increase of 8.2% over January to November 2019. By consumption type, from January to November, the retail sales of goods reached 35750.1 billion yuan, a year-on-year increase of 12.8%; Catering revenue was 4205.4 billion yuan, an increase of 21.6%.
(growth rate of total retail sales of social consumer goods, source: National Bureau of Statistics)
two main lines seize opportunities
The financial Associated Press reporter learned from various research interviews that both the epidemic situation and the rise in raw material prices have only a short-term impact on the condiment industry and do not change the long-term prosperity of the industry. It is generally believed in the industry that the mainstream condiment enterprises are expected to resume growth with the restoration of catering, the standardization of community group purchase, the de inventory of channels and the price increase to smooth the cost.
According to Euromonitor data, the scale of China's condiment industry will reach 145 billion yuan in 2020 and 184.8 billion yuan in 2025. The market capacity is still broad. In 2020, the Cr5 of condiment industry will be 15%. As leading enterprises strengthen product innovation and brand marketing, the living space of small enterprises will be squeezed, and the industry concentration is expected to increase steadily.
Listed companies in the condiment industry have expanded their production, which also reflects their recognition of the prosperity of the industry. In January this year, Qianhe Condiment And Food Co.Ltd(603027) the second phase of the seasoning project with an annual output of 250000 tons produced 100000 tons of brewing soy sauce and 50000 tons of vinegar. The relevant person in charge of the company told reporters that the 600000 ton condiment intelligent manufacturing project under construction is still under construction. The first phase with an annual output of 200000 tons of brewing soy sauce and 100000 tons of cooking wine is expected to be completed by the end of 2022.
Jiangsu Hengshun Vinegar-Industry Co.Ltd(600305) on November 10, it was announced that an additional fund-raising of no more than 2 billion yuan was proposed to be used for many production expansion projects, such as Hengshun fragrant vinegar expansion project (phase II), 30000 tons of brewing vinegar expansion project, 100000 tons of rice wine cooking wine construction project (expansion). The company said that the condiment market has broad prospects and fierce competition, and needs to seize a greater market share.
In addition, Jonjee Hi-Tech Industrial And Commercial Holding Co.Ltd(600872) also announced a fixed increase of 7.791 billion yuan in July this year for the 3 million ton seasoning expansion project. People from the company told reporters that the production and marketing rate of the company is very high, and it is basically full of production and sales. Expanding production is a long-term development strategy for the company.
From the perspective of industry analysts and securities companies interviewed by the reporter, the condiment industry opportunities can be grasped from two main lines in 2022: first, industry leading companies pay attention to Foshan Haitian Flavouring And Food Company Ltd(603288) , Jonjee Hi-Tech Industrial And Commercial Holding Co.Ltd(600872) ; Second, companies with relatively large performance flexibility, such as Qianhe Condiment And Food Co.Ltd(603027) , Jiangsu Hengshun Vinegar-Industry Co.Ltd(600305) , etc.
(list of key subjects)
(Financial Associated Press)
