The price increase beyond the plan of the general five year plan will break the “glass plate” suppression of the price of 1000 yuan in the industry
The significance of industry indicators of puwu price will be gradually strengthened. The so-called “glass plate” refers to the repressive power of Wuliangye Yibin Co.Ltd(000858) brand in price. The enterprise vitality compressed by the market wholesale price hovering below 1000 yuan may be gradually released. We believe that the price increase of high-end brands will drive the structural expansion of the price belt of RMB 1000 and below at the industry level, and prolong the structural prosperity cycle of the industry; For the company, in terms of brand competition strategy, Wuliangye Yibin Co.Ltd(000858) “looking up” will lay a solid foundation for the future development of classic clothing and other products. Guojiao 1573 products closely follow the pace of puwu, adjust the supply price of core terminals, guide the market expectation of price increase, stabilize the basic market in the short term, promote channel payment collection, and consolidate the brand position in the medium and long term.
The transaction price of 5000 yuan + has become the norm. Under the volume price balance strategy, the price is expected to continue to rise after the Spring Festival
Puwu (the eighth generation) will implement the “quota system” in 2022. The contract price is planned to remain 889 yuan / bottle, and the unplanned increase is 90 yuan / bottle, from 999 to 1089 yuan / bottle. The proportion of planned and unplanned quota is 6:4, and the comprehensive cost is 969 yuan / bottle, an increase of 5.1% at the same time (calculated according to the 21-year planned 889 yuan / bottle, unplanned 999 yuan / bottle, the ratio of planned and unplanned quota is 7:3, and the average cost price is 922 yuan / bottle). After the comprehensive purchase cost of the channel rises to 969 yuan / bottle, the channel profit narrows in the short term, and also promotes the recovery of the approved price. At present, it is generally five years old (the eighth generation) the market transaction price is about 1050-1080 yuan / bottle, and the first batch price is 970-980 yuan / bottle. We believe that the company’s volume price balance strategy is appropriate, considering the restrictive factors of the scarcity of high-quality production capacity and the increase of channel purchase price, in order to maintain the channel basic profit margin of 5% – 8%, the wholesale price of puwu may exceed 1000 yuan after the Spring Festival in 2022.
The 2022 dealer conference of Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) and other brands was held intensively to convey the positive signals of “14th five year plan” and “high-quality development”
Recently, Baijiu enterprises, such as Guizhou Jiu Jiu, Jiugui Liquor Co.Ltd(000799) , Wuliangye Yibin Co.Ltd(000858) , Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) and so on, have been holding the 2022 annual national distributor conference to plan the key marketing work in 2022. All of them have put forward the requirements of high quality development, including focusing on core single products, strengthening consumer training and maintaining vendor relationship. Taking Fenjiu as an example, the conference summarized the reform achievements in the past five years, It also puts forward the development goal of “three points of the Baijiu“. “Fenjiu’s 100 million yuan market in China has increased from 8 in 2017 to 28 in 2020. The number of distributors has increased from less than 1000 in 2017 to 2944 at present, and the number of terminal controls has increased from less than 10000 in 2017 to 1 million. The growth rate of Fenjiu’s markets outside the Province has greatly caught up with that in the province, of which the average growth rate of the market south of the Yangtze River has reached 60%. The cumulative growth rate of Qinghua Fenjiu in the past five years has exceeded four times, and the growth rate of Fenjiu outside the province has increased from The sales proportion of the top 10 products increased to 86.61%. ” In the future, it will also further focus on East China, South China and large base markets, and deliver positive signals of high-quality development during the “14th five year plan” by focusing on the three indicators of “Qinghua Fen Liquor sales index, Qinghua 20 terminal index and Qinghua Fen Liquor opinion leader group index”. Due to the Spring Festival ahead of 2022, the stock market of Baijiu has entered the peak season. Although the outbreak of some epidemic areas in the region has affected, the channel outlook is generally optimistic, and the enthusiasm for stock preparation is higher. The price hike is also expected to promote the channel repayment, and the spring Festival is a good start.
Investment advice
The trend of industrial structural expansion remains unchanged, The price of Baijiu five is conducive to the growth of thousand yuan and the second high-end price band (such as Fen Liquor, blue and white 30 revival edition, alcoholic drink, internal reference, taste, sacrifice, the Yanghe River M6+ and so on). The short-term price increase also accelerated the business rush payment. The “start” can be expected to continue. It is recommended to configure high-end liquor Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Luzhou Laojiao Co.Ltd(000568) , sub high end Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , Shede Spirits Co.Ltd(600702) , Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) and regional high-end. Anhui Gujing Distillery Company Limited(000596) and others will also continue to benefit.
Risk statement
1) The reform of state-owned enterprises and marketing mechanism is significantly lower than the expected risk; 2) Risk of insufficient support at the demand side; 3) The scattered outbreak of the epidemic exceeded expectations and affected the recovery rhythm of offline consumption scenes.
