Introduction
Since the outbreak of covid-19 epidemic, epidemic prevention policies, travel restrictions and repeated epidemics have had a serious impact on the consumption scenes of tourism, catering, hotels, food, drinks and other industries. At present, the epidemic situation is expected to continue to improve. The 14th five year development plan of tourism and other industries also looks forward to the liberalization of entry and exit when the epidemic situation allows. We believe that with the support of policy support + better prevention and control situation, the inflection point of consumption recovery is coming and the prosperity is expected to continue to rise. Looking forward to the future, how to layout the investment after the epidemic and how to interpret the recovery market, the large consumption team of East Asia Qianhai Securities Research Institute has launched a series of in-depth reports on “foreseeing the recovery and layout after the epidemic”. This is series 6: beer.
Core view
Beer was disturbed for a short time during the epidemic: (1) the existing beer drinking channel was damaged. After the outbreak of covid-19 epidemic, the current drinking channels such as night show and catering were damaged, and the proportion of current drinking channels decreased from 51.4% in 2019 to 48.0% in 2020 (by sales). In terms of night show channels, most night shows in 2020h1 in Beijing are closed; Catering channels have also shrunk one after another, which has a huge impact on the beer industry in the short term. (2) The growth of revenue and profit slowed down, and the production and sales declined. From the perspective of revenue and profit, the beer sector was disturbed in the short term during the epidemic in 2020; From the production side, the epidemic has reduced the beer production in the short term; From the sales side, affected by the epidemic, the sales of beer manufacturers in 2020h1 decreased significantly, and the sales of 2020h2 returned to the level before the epidemic.
Changes brought about by the epidemic: (1) the upward pressure on costs is prominent, and the industry has stepped into the tide of price increase. Under the impact of the epidemic, China’s PPI continued to rise in 2021, highlighting the upstream cost pressure of beer manufacturers. The upward pressure of cost and the high-end logic of the industry together promoted beer manufacturers to enter the tide of price increase. Budweiser took the lead in raising prices in the industry in April 2021, and then various manufacturers followed up. (2) New high-end brands continue to emerge and occupy the commanding height. The epidemic has accelerated the high-end, with the emergence of ultra-high-end new products, and the head beer manufacturers have accelerated the high-end construction.
Future prospects: (1) significant results have been achieved in prevention and control, and the synergistic effect is expected to help consumption pick up. The epidemic situation in China has been effectively controlled. At present, the recovery rate of Chinese consumption is slower than expected. Policies promote the reopening of borders in overseas countries, and the mood is expected to warm up under the synergistic effect. (2) The social scene recovers and the current drinking channel continues to recover. The recovery of China’s consumption scene has promoted the continuous recovery of beer drinking channels. (3) The market concentration is constantly improving, and the trend of high-end products is the general trend. Under the influence of the epidemic, the market concentration is expected to further improve, and the leader is expected to further seize the market share in the future. After 2015, the price of bottled and canned beer in China continued to rise. Affected by the epidemic in 2020, the price decreased, and the price rebounded in 2021.
Investment advice
When the epidemic situation turns better in 2022, we are optimistic about the performance release of the beer industry under the price increase, high-end logic and the expectation of consumption recovery. The epidemic has accelerated the high-end process of the beer industry, and the leading share is expected to be further concentrated in the future. Under the current “steady growth” policy, the government has made efforts to promote consumption and reopen borders with overseas countries. Under the synergistic effect, market sentiment is expected to warm up; Under the background of the normalization of the epidemic situation, the consumption scene continued to recover and the beer drinking channel warmed up. In 2021, leading beer manufacturers have raised prices to cope with the upstream cost pressure. The price increase is expected to drive the profitability of beer manufacturers to rise.
Risk tips
The price of raw materials has risen sharply; Repeated outbreaks in China; Food Safety.
