According to the reporter of Securities Daily, the quality report of China's dairy industry (2020) shows that the price of domestic brand infant formula milk powder has increased by 17.4% in five years, and the price of Chinese infant formula milk powder still maintained a slight upward trend in 2021.
According to the data of the Ministry of Commerce, as of December 24 this year, the spot retail price of domestic brand infant milk powder in China was 218.83 yuan / kg, with a cumulative increase of 4.41% during the year, and the cumulative increase of foreign brands during the same period was 4.39%, with a moderate increase.
Song Liang, head of the economic expert group of China Agricultural Reclamation dairy alliance, said in an interview with the Securities Daily that the main reason for the rise was the rise in commodity prices during the year, which led to the rise in the prices of milk powder raw materials and raw and auxiliary materials, making the cost rise. Dairy enterprises generally choose to raise the price slightly to calm the upward pressure on the cost.
For the price trend of infant formula milk powder next year, song Liang believes that it will still be the market positioning with the price war as the core. Because the formula registration system will be implemented in 2023, the listing of new products means the use of the new national standard, so the old products that fail to meet the standard cannot be listed. Therefore, major enterprises will deal with the inventory next year, so the situation of price war is still severe.
"A number of enterprises and products will be lost in the registration of new formula in 2023, and the whole market will be further concentrated. I think the market share of the top ten enterprises will reach more than 80% - 85%." Song Liang said.
Bai Wenxi, chief economist of IGP China, added that although the revision of the measures for the administration of the registration of formula foods for special medical purposes (Exposure Draft) released in October this year will make many milk powder enterprises give up their registration and lower the price before the expiration, and concentrate on clearing the inventory, which will have a price reduction impact on the whole infant formula market next year, However, this impact is short-term. After the consumption of commercial inventory, the whole industry will still return to the original basic trend.
At the same time, the reporter of Securities Daily noted that the operation of Chinese dairy enterprises has been greatly improved due to the mild price rise of infant milk powder during the year and the stimulation of birth liberalization policy.
According to the data of East Money Information Co.Ltd(300059) choice financial terminal, 16 listed companies in the dairy sector of the A-share market (classified by Citic Securities Company Limited(600030) industry) achieved a total net profit attributable to the parent company of 9.952 billion yuan in the first three quarters of 2021, a year-on-year increase of 33.74%, of which 11 achieved a year-on-year increase.
In this regard, ye Yindan, a researcher of Bank Of China Limited(601988) Research Institute, told the Securities Daily that under the premise of last year's low base, the dairy sector achieved restorative growth in the first half of the year, and the increase of raw milk price slowed down in the second half of the year, which was good for the profit growth of enterprises. In 2022, it is expected that the rising price of raw milk will become more stable, creating good conditions for corporate profits.
As for the investment value analysis of dairy products in 2022, ye Yindan believes that it is expected to maintain a good performance.
Ye Yindan analysis: "On the supply side, it is expected that the rise of milk prices will be gentle in 2022, the cost side of enterprises will stabilize, and the profitability of enterprises is expected to return to the rising channel. With the gradual deepening of cooperation between downstream dairy enterprises and upstream pastures, the cyclical fluctuation of raw milk prices will be gradually weakened, providing good conditions for the profitability of dairy enterprises. On the demand side, China's per capita dairy consumption is only 1 / 2 of that of Japan and South Korea About 1 / 4 of that in Europe and America. In the long run, the development space of the industry is still very broad. In the future, driven by the accelerated recovery of domestic brand confidence and the trend of consumption upgrading, the main businesses of dairy enterprises are expected to maintain a high growth rate, and the competition of dairy enterprises is more multidimensional, which is conducive to the benign development of dairy industry and the improvement of enterprise profitability. "
Song Liang believes that compared with the operation of the year, the valuation of leading enterprises in the A-share dairy sector is still low. For non leading enterprises, although the performance may not be good, it is mainly due to the price war. It is expected that the price war will slow down significantly next year, the profitability of these enterprises will improve, and their valuation still has room to improve.
(Securities Daily)
