Baijiu sector: we believe that the recent sector catalyst for spring sugar (postponed to April) and 22Q1 quarterly results to cash in, optimistic about 22Q1’s high performance & marginal change & Valuation of cost-effective targets, 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) .
Food sector: this week, we mainly update the dairy sector in the food sector, mainly Inner Mongolia Yili Industrial Group Co.Ltd(600887) , Zhe Jiang Li Zi Yuan Food Co.Ltd(605337) , etc. Overall, we maintained our previous view that the 22Q1 Baijiu sector allocation opportunities outweigh the food, food concerns with catalytic and marginal improvement opportunities.
February 28th ~3 4, 5 trading days, the Shanghai and Shenzhen 300 index fell 1.68%, the food and beverage sector fell 1.96%, the Baijiu sector fell more than the Shanghai and Shenzhen 300, or 2.89%. Specifically, Tongpu shares (+ 18.60%) and Fujian Yanjing Huiquan Brewery Co.Ltd(600573) (+ 13.48%) in the beverage sector increased relatively large this week, while Shanghai Bairun Investment Holding Group Co.Ltd(002568) (- 10.23%) and Wuliangye Yibin Co.Ltd(000858) (- 7.41%) decreased relatively large; This week, the increase of Qinghai Spring Medicinal Resources Technology Co.Ltd(600381) (+ 17.51%) and Zhejiang Huatong Meat Products Co.Ltd(002840) (+ 16.21%) in the food sector was the top, while the increase of Cabio Biotech (Wuhan) Co.Ltd(688089) (- 10.82%) and Anhui Jinhe Industrial Co.Ltd(002597) (- 8.29%) in the food sector were the bottom.
This week’s view
[Baijiu]: marginal changes in the performance of small wine before
Plate review: this week’s sector correction is related to the peripheral market, basically facing the good trend
February 28th ~3 4, 5 trading days, the Shanghai and Shenzhen 300 index fell 1.68%, the food and beverage sector fell 1.96%, the Baijiu sector fell more than the Shanghai and Shenzhen 300, or 2.89%. Baijiu sector, Xinjiang Yilite Industry Co.Ltd(600197) (+13.22), Hebei Hengshui Laobaigan Liquor Co.Ltd(600559) (+4.39%), Jinhui Liquor Co.Ltd(603919) (+3.16%) rise and fall in the top, and Xinjiang Yilite Industry Co.Ltd(600197) rise is the leading reason, because the valuation is cost-effective, with marginal changes, specifically: 1) the market environment: the inner economy is more active, the catering industry is overcrowded, and the economic vitality of the territory is released. 2) Company management: the market-oriented incentive reform is continuously promoted, and the focus of work is shifted to marketing, so as to lay a good foundation for the development of the company; 3) Products: the company’s product matrix is dominated by the exclusive sales mode. Some products will be gradually recovered from the company’s self-supporting. In the future, the channel profits will be increased through price control, and the number of self-supporting products will increase. In addition, Wuliangye Yibin Co.Ltd(000858) (- 6.53%) led the decline, or it was mainly because the company was in the period of management change and lacked marginal change.
Main liquor enterprises: business situation & basically good oriented, price increase and new product launch in progress
1) Wuliangye Yibin Co.Ltd(000858) – the product matrix of series liquor was further improved and mingmenchun was officially listed. Since the company launched the second generation wuliangchun (priced at 428 yuan / bottle) in 2021, the retail price this week is 728 yuan / bottle. In the first year, mingmenchun with a large volume of 500 tons is expected to be listed. Mingmenchun is a new product of wuliangchun (the first strategic brand of series of liquor), which is expected to be launched in Wuliangye Yibin Co.Ltd(000858) advantageous markets such as Sichuan, Jiangsu, Zhejiang and Shanghai. The advent of mingmenchun will further enrich the matrix of Wuliangye Yibin Co.Ltd(000858) series wine and create a new growth pole of Wuliangye Yibin Co.Ltd(000858) Luzhou flavor series wine.
2) Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) – the market of Fen Liquor with 100 million yuan has increased to 22, and the southern market has developed rapidly. Jiuquan held four sessions of five employee congresses and three sessions of five trade union member congresses. It was revealed at the conference that the Fen Liquor Market with a billion yuan increased to 22, the sales of Zhuyeqing liquor in the southern core market increased by more than 120% year-on-year, and the liquor export ranked among the top three in the industry. The number of dealers outside the province increased by 30.5% year-on-year, and the number of controllable terminals increased to 1.05 million.
3) Jiugui Liquor Co.Ltd(000799) – the northwest region has a scale of 200 million, and the inheritance and price increase of drunkards are in progress. According to the seminar on the value of neishen liquor, the sales scale of the two brands Jiugui Liquor Co.Ltd(000799) has reached 200 million yuan in Northwest China in 2021. In February 2022, neishen liquor accounted for nearly 50% of the sales in the Great Northwest theater. 54 ° neishen liquor also cooperated with core merchants to build an alliance shareholder. In addition, from May 31, 2022, the strategic price of 52 degrees 500ml Jiugui Liquor Co.Ltd(000799) (inheritance), 39 degrees 500ml Jiugui Liquor Co.Ltd(000799) (inheritance) and 42 degrees 500ml Jiugui Liquor Co.Ltd(000799) (inheritance) (1987) will be increased by 10 yuan / bottle respectively.
4) Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) – promotion in peak season, and the upgrading of sky blue is smooth. On February 28, the activity of “opening bottles of sky blue and winning good gifts in the Spring Festival” in Yanghe across the Spring Festival ended. 20 Wuling Hongguang minievs, 3368 Huawei p50pro mobile phones, 622403 xufuji huhuhushengwei gift boxes and 2788746 cash red envelopes were sent out. The total number of prizes reached 3.4145 million, with a total value of more than 954651 million yuan. We believe that tianzhilan can pass the exam in the peak season of the Spring Festival. In addition to the routine upgrading measures, it is inseparable from the promotion in the peak season to promote the growth of dynamic sales, so as to ensure the excellent performance of markets outside the province.
5) Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) – the growth rate of the fourth open in 21 years is excellent, and V9 is expected to contribute significant increment in 22q1. The company’s post holiday replenishment is in progress, and the replenishment volume in March is expected to be higher than that in the same period last year. Specifically – 1) V Series: V9 shows an upward trend under all-round promotion, and V3 market adjustment is in progress; 2) Guoyuan series: the volume of four opening is larger than that of opposite opening, but the increase speed is slower than that of opposite opening; Sikai’s price rise basically reached the expectation / elegant Guoyuan is the third largest single product of the company. The growth sources of the company’s post 10 billion: 1) under the guarantee of stable growth of the basic market (high base), the V series is growing rapidly; 2) Focus and refocus outside the province (by selecting key markets and focusing on the development of opening systems), and do not pursue foreign exchange growth.
6) Anhui Yingjia Distillery Co.Ltd(603198) – dynamic sales performance is strong, which is the preferred target for 22q1 performance exceeding expectations. Benefiting from the continuous release of Dongzang series brands + high channel profits, more and more high-end liquor dealers have joined. The dynamic sales performance of main sales areas such as Hefei, Lu’an and some northern Anhui regions is better than that in previous years, and the structure has been steadily upgraded to one of the liquor enterprises with the best dynamic sales performance observed at present. Considering the dealers’ active payment in January, the current channel inventory is at a low level and is about to enter the stage of price increase and goods control, the revenue of 22q1 company is expected to reach 2 billion and the profit is expected to reach 650 million.
7) Vats Liquor Chain Store Management Joint Stock Co.Ltd(300755) – high priced customized new products have been launched one after another, and lotus capacity expansion has increased profits Vats Liquor Chain Store Management Joint Stock Co.Ltd(300755) recently, the performance of high-end standard products has been stable, and the successive launch of high-priced customized products is expected to contribute to profits. In the steady expansion of lotus wine, it is expected that the profit growth may have excellent performance under the condition of stable income end of 22q1. We expect the net profit in 22 years to reach 950 million.
Eternal Asia Supply Chain Management Ltd(002183) : the profit performance in 21 years is in line with expectations, and the net profit in 22 years is expected to achieve high growth
[performance express] in 2021, the company achieved an operating revenue of 71.228 billion yuan, a year-on-year increase of 4.35%; The net profit attributable to the parent company was 512 million yuan, a year-on-year increase of 314.95%; Deduct the net profit not attributable to the parent company of 513 million yuan, with a year-on-year increase of 533.89%, turning losses into profits; 21q4 achieved an operating revenue of 18.094 billion yuan, a year-on-year decrease of 26.45%; The net profit attributable to the parent company was 97 million yuan, a year-on-year increase of 129.79%; Deduct 107 million yuan of non parent net profit and turn losses into profits.
The main reasons for the substantial growth of the company’s performance this time are as follows: 1) the company’s operating revenue increases, while vigorously promoting the adjustment of business structure, and the proportion of brand operation and marketing business continues to increase; 2) The company completed the non-public offering of new shares in July 2021, optimized the financing structure and effectively reduced the financing cost. We are based on: 1) the company’s brand operation business (sauce and wine related business) will continue to contribute high profit elasticity and has strong potential; 2) The bottom of profitability has passed, and expense control has helped the net interest rate rise; 3) The business model continues to be optimized, and the profit side of the company continues to perform strongly. It is expected that the overall profit of the company in 22 years is expected to exceed 650 million.
2021 Baijiu industry data: 21 years, the above scale Baijiu enterprises production price reduction
In March 1st, Song Shuyu, director of the China Baijiu Association, said that in 2021, the output of liquor industry above scale enterprises was about 716 million liters, an increase of 0.6% over the same period last year. The accumulated sales revenue was about 603.3 billion yuan, a year-on-year increase of 18.6%; The total profit was about 170.2 billion yuan, a year-on-year increase of 28.74%. Last week, the Federation of light industry and the Sichuan provincial trust agency released data showing that the Baijiu (65 fold, commodity volume) and Sichuan liquor in 2021 showed a downward trend in volume. We believe that the Baijiu industry will continue to expand its development with the theme of upgrading.
Data update: the Kweichow Moutai Co.Ltd(600519) rating performance was stable this week, and the overall inventory performance was healthy
Kweichow Moutai Co.Ltd(600519) : the wholesale price of Feitian loose bottles is about 2780 yuan, and the wholesale price of the whole box is about 3160 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 The approval price of this week is about 1800 and about 9808 in this week 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.
Investment suggestions: it is recommended to pay attention to 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)
Under the high frequency feedback of information, the current Baijiu sector is expected to be relatively large, the high-end liquor is stable, the brand high-end liquor continues to be strong, and regional wine is benefited from the demand expansion and strong replenishment stock demand. In general, Baijiu basically faces the good trend. We think that the sector catalyst is held for spring sugar (postponed to April) and the 22Q1 quarterly results are fulfilled. We are optimistic about the high growth of 22q1 performance & marginal change & Valuation with cost performance targets, 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]: Q1 dynamic sales are good + profit margin can be improved. Continue to be optimistic about the beer sector
Plate review: this week’s sector correction is related to the peripheral market, and the fundamental trend has not changed
From February 28 to March 4, the CSI 300 index fell by 1.68% in five trading days, the food and beverage sector fell by 1.96%, and the beer sector rose by 2.48% higher than the CSI 300. Specifically, for the beer sector, Beijing Yanjing Brewery Co.Ltd(000729) (+ 7.82%), Tsingtao Brewery Company Limited(600600) (+ 4.73%), China Resources beer (+ 1.39%), Budweiser Asia Pacific (+ 1.01%), Chongqing Brewery Co.Ltd(600132) (- 1.36%), the sector fluctuated significantly this week: 1) the sector rose significantly on Tuesday: mainly due to the positive feedback from the main liquor enterprises in January and February, the smooth transmission of price increase, which can cover the rise of the cost side, and the improvement of profit margin can be expected; 2) In the second half of the week, there was a significant correction in the sector: related to the fluctuation of peripheral markets, the international situation has not been eased, resulting in the tightening of market risk appetite, and the fundamental trend has not changed.
Update of beer sector: smooth transmission of price increase (better dynamic sales) + slower cost growth = expected increase in profit margin
Q1 dynamic sales are good, price increases are on the ground + cost growth slows down = profit margin improvement can be expected. 1) The dynamic sales of beer from January to February are good: the dynamic sales of beer in January and February are good, the price increase is smooth, and the start is promising. Tsing beer sold 550000 tons in February, which is expected to achieve double-digit growth year-on-year, with the growth rate increasing month on month, and the growth rate in Heiji Liaoning and Yunnan is rapid; Tsingtao beer and China Resources expect the sales volume to achieve medium unit growth in January, the sales volume of heavy beer in January is expected to increase by double digits, and the beer enterprise Q1 has a promising start. 2) The price increase will be implemented before the peak season, and the price increase range will be about 4% – 10%. Considering the measures such as price locking and hedging, it is expected that the cost increase of raw materials and packaging materials will lead to the number of units in the rise of comprehensive costs. Due to the impact of the low base of 21q1 cost price, the price increase may be reflected in the income end of 21q1, The certainty of profit margin improvement in 22 years is high.
Chongqing Brewery Co.Ltd(600132) update: volume and price can rise together, and multiple measures can be taken to hedge cost pressure
The feedback of moving sales is positive, and the upward pressure of price increase + price lock hedging costs. 1) Movable sales: the feedback of movable sales in January is good, and the growth rate is expected to reach 10% – 20%. 2) Wusu: the overall growth rate of Wusu in 21 years is 34%, of which the high growth outside Xinjiang is expected to exceed 50%, and the growth in Xinjiang is expected to be within 20%. If the growth rate of Wusu in 22 years remains stable, the sales volume of Wusu this year may reach 1.1 million tons. In addition, the price of hongwusu increased by 5% – 6% in February this year, and the price increase is expected to be completed from March to April. 3) Cost control: the company takes price locking and other measures to control the cost. Among them, the price locking cycle of barley is long (the company does not purchase barley from Russia and Ukraine). This round of price locking cycle of packaging materials continues until March to June this year. It is expected that the cost increase this year will slow down compared with 21 years. 4) Expenses: it is expected that under the easing of the epidemic, the sales expense rate this year will rise slightly compared with that in 21 years. On the whole, Wusu, a large single product, still maintains a strong growth trend. The price increase can cover the upward trend of the cost side, and the volume and price increase + profit margin increase can be expected.
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. We pay attention to the 22-year profit margin improvement + industry pattern optimization brought by price increase. We recommend paying 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.
[food sector]: waiting for food improvement opportunities
Sector review: the food sector rose as a whole this week, led by meat products
Plate growth: food processing sector rose 2.62%, of which seasoning sector fell 0.19%, dairy sector fell 0.04%, meat sector rose 3.49%.
On the rise and fall of individual stocks: Qinghai Spring Medicinal Resources Technology Co.Ltd(600381) (+ 17.51%), Zhejiang Huatong Meat Products Co.Ltd(002840) (+ 16.21%), Beijing Scitop Bio-Tech Co.Ltd(300858) (+ 7.51%) ranked among the top three in the sector. In the meat products sector, Zhejiang Huatong Meat Products Co.Ltd(002840) (+ 16.21%) led the rise, while Longda food (+ 4.24%) and Henan Shuanghui Investment & Development Co.Ltd(000895) (+ 3.90%) followed the rise; In the condiment sector, Foshan Haitian Flavouring And Food Company Ltd(603288) (+ 4.88%), Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) (+ 4.25%) led the rise, and Qingdao Richen Food Co.Ltd(603755) (+ 2.59%) led the rise; In the dairy sector, Lanzhou Zhuangyuan Pasture Co.Ltd(002910) (+ 2.41%), Xinjiang Tianrun Dairy Co.Ltd(600419) (+ 2.35%), Royal Group Co.Ltd(002329) (+ 1.85%) led the increase; In the comprehensive food sector, Qinghai Spring Medicinal Resources Technology Co.Ltd(600381) (+ 17.51%) led the rise, while Beijing Scitop Bio-Tech Co.Ltd(300858) (+ 7.51%) and maizeer (+ 3.03%) followed the rise.
Updated this week: Zhongyin Babi Food Co.Ltd(605338) , Zhe Jiang Li Zi Yuan Food Co.Ltd(605337) , Inner Mongolia Yili Industrial Group Co.Ltd(600887) , By-Health Co.Ltd(300146) , etc
Zhongyin Babi Food Co.Ltd(605338) : comment on the announcement on the proposed purchase of land use right for the construction of Wuhan intelligent manufacturing center
Event: in order to expand the production capacity layout in Central China, if the company plans to set up a wholly-owned subsidiary, it will use its own or self raised funds to purchase the land use right of the land plot located in Dongxihu District of Wuhan for investment in the construction of “Wuhan intelligent manufacturing center project”: the intelligent manufacturing center project integrates the functional international pasta R & D center, It is planned to build the company into a smart factory with deep integration of food industrialization, informatization, intelligence and digitization in Central China, as well as an industrial tourism demonstration base with a high combination of food industry and cultural tourism industry. The total investment is about 750 million yuan, and the land area is about 120 mu. The land is provided at one time for the construction project in two phases.
The company will complete the acquisition of breakfast brands “Haolike” and “zaoyidian” in Central China (Wuhan) in 22h1, and the establishment of factories in Central China will further lay the cornerstone of the company’s expansion, and the company’s nationalization logic will not be changed. (at present, the company has factories in Shanghai, Tianjin, Guangzhou and Shenzhen, and South China)
