Market review last week:
Last week (February 28-March 4, 2022), the food and beverage sector (Shenwan) fell 1.96%, the Shanghai Composite Index fell 0.11%, the Shenzhen Component Index fell 2.93%, the Shanghai and Shenzhen 300 fell 1.68%, and the food and beverage sector lost 1.85 percentage points to the Shanghai Composite Index, ranking ninth in the weekly rise and fall of Shenwan's 31 primary sub industries.
Core view: the boom of the director general on the left has not changed, and the valuation falls into the reasonable allocation range
Baijiu: the industry has no worries, and the valuation has fallen into a reasonable allocation. Since 2022, the PE of liquor sector has been declining, mainly due to the impact of repeated epidemic, geopolitical factors and consumption tax expectations. The valuation callback stems from the increase of its industry attributes and liquidity relevance, and the reconstruction of Baijiu Baijiu liquor value system in the new stage is vulnerable to the global financial risk factors and the fluctuation of capital. In the long run, Baijiu industry has no worries. The industry is still in a business cycle, and the structural differentiation driven by consumption upgrading may continue under the trend of volume reduction and price increase. The high-end famous liquor has sufficient toughness. Under the multiple reforms of production capacity, corporate governance and product structure, Maotai has absolute brand advantages superimposed on the good expectations of marketization, and has strong certainty of steady growth in performance Wuliangye Yibin Co.Ltd(000858) personnel changes are implemented, and the superimposed later volume control and price support may support the upward rating. The valuation has been discounted, so there are layout opportunities. The layout on the left focuses on the elastic space brought by the growth of secondary high-end. The performance of sub high-end liquor enterprises will achieve high growth in 2021, and the market is expected to be under pressure in Q2 or growth in 2022. However, from a longer perspective, the epidemic will eventually stabilize, the consumption scene will be replenished and the consumption will be upgraded. There is a large elastic space under the continuation of the growth rate of sub high-end capacity expansion.
Condiment: equity incentive is full of vitality and pays attention to the marginal recovery of demand scenario. According to the data of Muding, the offline supermarket data in January 2022 was better, and the sales of soy sauce / vinegar / cooking wine increased by 21.34% / 21.33% / 28% year-on-year. The cost side pressure of the condiment sector was basically relieved with the price increase adopted by leading companies last year. The price increase in the fourth quarter affected dealers to increase inventory, and the revenue is expected to increase slightly month on month. Haitian has the experience of raising prices and balancing high inventory in 2015. In January, Haitian has increased cost investment promotion and gradually digested inventory. The subsidies for community group buying have gradually weakened. In addition, condiment enterprises have launched special products for community group buying to distinguish products. The impact of community group buying on the price system has gradually dissipated. Recently, Qianhe Condiment And Food Co.Ltd(603027) and Sichuan Teway Food Group Co.Ltd(603317) have announced equity incentive plans, bound the core management, unlocked the goal, pragmatic and conservative, and the internal vitality is expected to continue to be stimulated.
Beer: the ton price is on the way to increase, and pay attention to the liquor enterprises with peak season sales or exceeding expectations. During the Spring Festival in 2022, the sales of beer enterprises are smooth, and the transmission of price increase is relatively smooth; The price of glass and corrugated paper on the cost side is still high compared with the same period last year. Affected by the situation in Russia and Ukraine, the price of imported barley continues to rise. However, considering that Tsingtao Brewery Company Limited(600600) , China Resources beer and other companies have locked the price of some barley and packaging materials at the beginning of the year, and the enterprise side has the expectation of raising the price at any time in 2022, the pressure on the overall cost side is slowing down. On the cost side, leading liquor enterprises will continue to invest in product promotion fees, the cost rate is expected to maintain a stable or slight growth, and the gross sales difference will expand steadily. The overall fundamentals of the industry continue to improve, and the high-end trend is highly deterministic. The leading liquor enterprises will also benefit from the ton price increase brought by the price increase and the upgrading of product structure. The potential profit elasticity brought by the repair of liquor enterprises' sales volume under the passivation of the epidemic situation. It is recommended to pay attention to the leading enterprises whose sales volume in the peak season or exceed expectations.
Investment advice
Plate allocation: Baijiu beer dairy products snack food condiment;
Baijiu: we should pay attention to the high potential Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , Anhui Gujing Distillery Company Limited(000596) , Shede Spirits Co.Ltd(600702) and Anhui Kouzi Distillery Co.Ltd(603589) of high-end liquor enterprises Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Luzhou Laojiao Co.Ltd(000568) and sub high end wine enterprises.
Beer: it is suggested to pay attention to Tsingtao Brewery Company Limited(600600) with optimized product structure and Chongqing Brewery Co.Ltd(600132) ; Dairy products: it is suggested to pay attention to Inner Mongolia Yili Industrial Group Co.Ltd(600887) , which makes concerted efforts in production capacity, channels and products.
Risk tips:
Baijiu price rise less than expected, terminal demand fell, food safety issues.
