Baijiu has been in the layout area, and the government work report is conducive to consumption recovery.
From February 28 to March 4, the food and beverage index fell by 2.0%, ranking 21st in the primary sub industry, about 0.3pct lower than Shanghai and Shenzhen 300. Among the sub industries, health products (7.3%), meat products (4.2%) and beer (2.5%) are relatively leading. There was still a sharp correction in the food and beverage sector this week, mostly due to market risk aversion and the expected warming of interest rate hike in the United States. There was a large outflow of foreign capital, and there was no significant change in the fundamentals of the industry. Baijiu Spring Festival money back on schedule, the majority of wine companies in the first quarter should be a smooth start. Although Baijiu mobile sales are slightly differentiated by the situation, the overall growth rate is still showing a good growth momentum. Most of the liquor companies have been cost-effective after the share price adjustment. High-end Baijiu steady growth, Wuliangye Yibin Co.Ltd(000858) personnel landing, follow-up reform and marketing action straightened out, the expected price increases, the valuation is likely to quickly repair. The second high-end Baijiu still can maintain a fast growth momentum, and there are still room for the head enterprises to lay out. The Spring Festival of regional famous wines was less affected by the epidemic, and benefited from the consumption upgrading driven by the rapid economic development in the province. There is still a good performance prospect in the first quarter and the whole year. We still optimistic about the follow up market of Baijiu, and recommend Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) and Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) . The two sessions will be held this week, and the premier will make a government work report. The report summarizes the work in 2021 and looks forward to the work in 2022. In the consumption support policy in 2022, it is proposed that fiscal expenditure should continue to expand to promote consumption and expand demand. At the same time, promote residents’ income and consumption capacity through multiple channels. We believe that the idea of the work report is fundamentally conducive to the recovery of consumption, boost demand by increasing income, promote Wuxi Online Offline Communication Information Technology Co.Ltd(300959) integration and develop new consumption formats and models, so as to make the circulation of consumer goods smoother and create a good consumption environment. In addition, the work report once again emphasizes Rural Revitalization. We believe that rural revitalization is an important theme in the context of common prosperity. If the policy is appropriate, the per capita income level of the third and fourth tier cities and county-level markets will be improved, which will greatly improve the consumption of offline cities. The upgrading speed of the gift market is expected to accelerate, and the products with the attribute of township gifts may benefit.
Recommended combination: Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , Foshan Haitian Flavouring And Food Company Ltd(603288) , Cabio Biotech (Wuhan) Co.Ltd(688089)
(1) Kweichow Moutai Co.Ltd(600519) cancel the unpacking policy of Feitian Maotai liquor, and the price difference between the original box and the bulk bottle is expected to narrow, which is conducive to the development of marketization. The price increase of Maotai liquor is expected to rise. Considering the supply of base liquor, the planned revenue target is expected to accelerate in 2022. The company has room to move calmly in terms of volume and price, and the logic of simultaneous rise of volume and price in the future is smooth. (2) Wuliangye Yibin Co.Ltd(000858) recently, the wholesale price has rebounded, the channel inventory is low, and the shipment is stable compared with the previous period. Considering the changes of quotas inside and outside the plan, it is expected to achieve double-digit growth in 2022. (3) Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) in the fourth quarter, the goods were strictly controlled and the delivery of superimposed expenses was accelerated, resulting in a slowdown in revenue and a decline in net interest rate. In 2022, the company firmly pursues higher quality development. It is expected that the product structure will be significantly improved and the annual performance will maintain rapid growth. (4) Foshan Haitian Flavouring And Food Company Ltd(603288) the price increase has a positive impact on costs and channel profits. The condiment industry is slowly repaired, and the company also shows a recovery trend. Considering the price increase, it is expected to return to the normal growth level in 2022. Proposed layout and long-term holding. (5) Cabio Biotech (Wuhan) Co.Ltd(688089) : equity incentive is implemented. After the implementation of the new national standard, the milk powder industry will start a new round of formula upgrading to accelerate the medium and high-end of the milk powder industry. The company is expected to fully benefit from the dividend of the new round of formula upgrading. At the same time, the second growth curve of SA is opened, and the cosmetics market is expected to relay.
Risk tips: economic downturn, food safety, fluctuations in raw material prices, lower than expected recovery in consumer demand, etc.
