Market situation: Baijiu industry 2021 market review. W-shaped double bottom pattern in the market, individual stocks showed differentiation, and soft drinks showed the most beautiful performance, up 16.14%, becoming the biggest winner in 2021; Followed by beer (8.24%), wine (4.93%), baijiu. China’s Baijiu plate has a significant excess return. But after the opening of the festival to mid March, China’s liquidity tightening expectations and the continued rise of US bond yields have a high impact on the high valuation sector. The market style is switched, and the Baijiu stock valuation is driving the whole sector down. In the two quarter, with the annual report and quarterly report, the 2.65% quarter of the year is also a major trend. After the release of the two or three year, the profit elasticity was released, a strong rebound occurred in the Baijiu liquor industry, and the index of food and beverage sector rose. From mid June to mid August, stock funds continued to flow into the cycle plate and new energy sector, making the value of Baijiu plate down. In mid September, under the impact of policy, cyclical stocks were sharply callback, capital inflow into the Baijiu plate, and began to rebound with the Foshan Haitian Flavouring And Food Company Ltd(603288) price rising. In terms of stocks, Jiugui Liquor Co.Ltd(000799) , Sichuan Swellfun Co.Ltd(600779) , Shede Spirits Co.Ltd(600702) , Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , Anhui Yingjia Distillery Co.Ltd(603198) and Anhui Kouzi Distillery Co.Ltd(603589) share a new high share price. In addition, 2021Q3 public funds have fallen to the general position of Baijiu company, and the Baijiu liquor is favored by the north capital.
Industry development: the high-end Baijiu is continuously expanding and the industry is upgrading. The Baijiu industry will have the following trend in the future: 1) industry competition will be upgraded and industrial concentration will be further improved, that is, the industry is concentrated in famous liquor producing areas and characteristic producing areas. Baijiu Baijiu (2) product structure upgrading, the proportion of high-end liquor will increase further. The well-known Baijiu production enterprises with good brand influence and high quality production capacity are expected to benefit from upgrading the product structure. From the perspective of industry development: 1) in the market environment of upgrading consumption level and upgrading consumption structure, the high-end liquor will continue to expand, and China’s high-end liquor products will continue to expand in the future. There is still significant growth potential. 2) the competition of high-end Baijiu is escalating. With the increase of high-end liquor prices, the sub high price band is also gradually improving. The 300~600 price of the high-end industry is fission to two yuan price and 300~600 600~800 price range. 3) The volume and price of light bottle wine rise together, which will open the prosperity period of high-end light bottle. Light bottle wine is more cost-effective than low-end boxed wine. Light bottle wine is expected to increase the volume by relying on the category substitution of low-end boxed wine, and increase the price through product upgrading, so as to rapidly expand the market scale. With the return of Baijiu consumption quality, consumers’ attention to Baijiu price, brand and packaging has been transformed into a quality first consumption concept.
Outlook for the coming year: the prosperity of the industry continues to rise, and a structured market is expected. 1) rising prices and consumption will help the Baijiu industry. With the sustained high price of Moutai and Wuliangye Yibin Co.Ltd(000858) , the price of 600-800 yuan was brought up, the price of secondary and high-end wine was upgraded and the product structure was upgraded. The announcement and notice of liquor companies released this year showed that the price and the range of Baijiu price increase far exceeded that of 2020. Not only did it increase the elasticity of the two or three line liquor enterprises, but the second high-end liquor enterprises were also ushering in the two outbreak. Therefore, with the steady improvement of epidemic control, the recovery of consumption data and the contribution of price rise to performance elasticity, the scale of the industry is expected to achieve steady growth in 2022. Meanwhile, the Baijiu industry has pushed large scale equity incentive to stimulate the potential energy of enterprise reform and enhance the initiative of both inside and outside. 2) Price band: stick to the high-end and layout regional leaders. Kweichow Moutai Co.Ltd(600519) is expected to have stronger market reform, and 2022 is expected to accelerate growth. In addition, from the valuation dimension, the Baijiu liquor has entered the period of steady growth after experiencing price increases and product structure upgrading, and has also completed the handover of valuation. The growth of secondary Baijiu is declining, and regional Baijiu is expected to accelerate growth. 3) Rhythm of the year: Q1 has a good start and Q2 may become a good opportunity for layout. In the short term, we believe that the cross year and peak season market is still not at the end. At present, the feedback of wine enterprises on payment collection is positive, the performance of the first quarter report is highly deterministic, and the plate has strong support. However, the second quarter of next year belongs to the off-season. Facing the pressure of high base and falling demand, the growth rate may slow down. After the plate correction or the layout opportunity in the second half of the year.
investment strategy
This year, there is a big gap between the share price increase of second and third tier small wines and that of first tier famous wines, and the plate market is divided. In 2022, the overall prosperity of the Baijiu industry continued to be a structural one. In 2021, the high-end Baijiu increased steadily, taking into account the expected price increase and the breakthrough of Moutai’s volume increase. Wuliangye Yibin Co.Ltd(000858) will increase the price of crude oil by structural adjustment, and the development potential of Luzhou Laojiao Co.Ltd(000568) will not be reduced. Equity incentive will ensure growth. The 2022 high-end Baijiu is expected to accelerate growth. The current valuation is at a reasonable level, and the value of high-end Baijiu is outstanding. Regional leading liquor enterprises are expected to enter the performance release period in 2022. It is expected that the valuation will be improved and the internal reform will release vitality. It is suggested that we should grasp the first-line Baijiu and pay attention to regional baijiu. At this point in time, we focused on 3 main lines of Baijiu strategy for 22 years: (1) adhere to the front-line Baijiu positions, Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Luzhou Laojiao Co.Ltd(000568) ; (2) find high resilient two or three line targets, Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , Jiugui Liquor Co.Ltd(000799) , Shede Spirits Co.Ltd(600702) , Sichuan Swellfun Co.Ltd(600779) ; (3) focus on the opportunities brought by the reform theme, Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) , Anhui Gujing Distillery Company Limited(000596) , Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , etc.
Recommended by key companies: Kweichow Moutai Co.Ltd(600519) , Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , Wuliangye Yibin Co.Ltd(000858) , Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369)
Risk tips: macroeconomic risk, food safety risk, market style change risk
