The performance of the sector is relatively low in 2021, and the development trend is good in 2022. From the beginning of 2021 to December 21, the food and beverage sector increased by 1.70%, PE decreased by 17.1% compared with the beginning of the year, and the fund position decreased continuously from 1 to 3 quarters, mainly because the sector experienced three difficulties: lower consumer demand, higher cost and channel reform. After experiencing the trough of demand and profitability, we judge that the development environment of the industry will be improved in 2022. It is expected that the demand will gradually increase, the consumption upgrading will continue, and the price increase will also improve the profitability of the food manufacturing industry.
The worst time point has passed. Pay attention to consumption upgrading and price transmission. We believe that the worst time point for food and beverage companies has passed, and the industry fundamentals will be improved in 2022. Superimposed on the current overall valuation level of the sector, some sub sectors with good fundamentals recovery are expected to usher in a new era. It is suggested to look for layout opportunities around the following two main lines: 1. Continue to focus on the main theme of consumption upgrading and look for targets to attack the middle and high-end; 2. Pay attention to price transmission and advance layout will usher in the subject of reversal. According to the current industry boom, we suggest that we focus on the two sub sectors of Baijiu and beer and actively follow the fundamentals of dairy products, condiments and frozen foods.
Baijiu, we think that upgrading of structure and concentration is still the main driving force for the development of the industry. The stronger structural boom of the stronger will continue, and the reform will continue to deepen in all directions. We believe that the comprehensive strength of famous liquor enterprises will continue to grow. Baijiu Baijiu, Moutai, Wuliangye Yibin Co.Ltd(000858) and Luzhou Laojiao Co.Ltd(000568) , which have high elasticity of performance, are the main products of the reform. They are the second highest quality liquor Baijiu and alcoholic spirits with the elasticity of performance. They hope to release the regional liquor of low base number, gujinggong and Anhui Yingjia Distillery Co.Ltd(603198) .
In terms of beer, the industry has entered the era of Oligarchic Competition, the upgrading of product structure has entered the acceleration period, and the sales volume of high-end single products has increased rapidly against the trend under the epidemic situation. Superimposed with the off-season price increases at the end of 2021 and the beginning of 2022 and the year-on-year decline in the price of raw materials expected in the second half of 2022, we expect the performance of leading companies to be accelerated next year. It is suggested to pay attention to the local beer leading company Tsingtao Brewery Company Limited(600600) with high-end gene and clear strategy.
Risk tip: the epidemic situation outside China has changed beyond expectations, resulting in the recovery of consumption less than expected; Food safety issues; The intensification of industry competition leads to the decline of industry profitability; The change of consumption tax collection policy leads to the rise of industry tax rate; Major adjustments in relevant industry policies affect the company’s performance; The company’s performance growth was lower than expected due to the decline of sales growth and the poor promotion of reform; Secondary market risk outside China; The macroeconomic situation outside China has deteriorated sharply.
(Guokai securities)
