Key investment points
Characteristics of the last Baijiu industry and market? China's Baijiu 20032012 years, first, from the industry characteristics: 1) the main driving force of Baijiu is economic investment, rapid economic development, China's fixed investment continues to increase, business demand has become the main source of liquor demand. 2) Driven by political and business demand + inflation, the price of high-end wine continues to rise, which is an important manifestation of the prosperity of the industry; 3) In the stage of simultaneous rise of volume and price in the industry, the channel is the king, and enterprises can obtain better volume by finding the right channel; 4) The real inflection point of the industry is more the changes brought about by the impact of policies, such as the three public consumption restrictions at the end of 2012. The demand side has the greatest impact on the industry. Second, from the perspective of market performance: 1) liquidity has a great impact on valuation. Loose liquidity raises valuation, while marginal tightening leads to downward valuation. From 2003 to 2012, the valuation center of the sector was about 35x. 2) under the leading factor of investment, the inflection point of performance is two to three quarters later than the inflection point of valuation; 3) The price of high-end liquor will keep rising, and the prosperity will be gradually transmitted downward, and the relay performance of sub high-end and real estate liquor will continue.
Where does this Baijiu industry and market go? The industry began to recover in 2016. First, from the perspective of industry characteristics: 1) mass consumption replaced government consumption, the core driving factor of the industry changed to consumption upgrading, and the consumption upgrading continued to increase on the existing rate track; 2) The industry has entered the stage of stock competition. Consumption upgrading promotes structural prosperity, and the expansion of high-end and sub high-end is accelerated. Wine enterprises with brand power and long-term consumer cultivation are expected to gain better market acceptance; 3) Maotai's wholesale price has stood at more than 2000 yuan / bottle. Driven by consumption upgrading + inflation, it has opened sufficient price space for other price segments. The prosperity of the industry is still, and there is a large space for price increase. 4) Baijiu demand structure is benign and policy cycle is weakening. We think that consumption tax will not become the turning point of the industry. The overall risk is still controllable, and the market of structural volume and price will continue to rise. Second, from the performance of the sector: 1) the epidemic is the catalyst for the transition of the short-term valuation system. With the tightening of liquidity, the current valuation has returned to a reasonable range of 30-40x. It is expected that the company's performance this year will be the leading factor in the market performance; 2) Steady growth in performance and steady progress towards the goal of the 14th five year plan. Consumption upgrading has a more stable consumption scenario and space than investment driven. The demand side is stable and periodically weakened. The fine control of wine enterprises is strengthened, the performance will still maintain steady growth, and the objectives of the 14th five year plan are still being achieved step by step.
Deduce the future development of the industry? First, what do you think of 2022? It may be difficult to improve the valuation side greatly. We believe that we should adhere to the performance certainty of high-end wine + actively embrace the performance elasticity of secondary high-end wine throughout the year, and pay attention to the dividends brought by the promotion of national reform. Second, from a long-term perspective, driven by consumption upgrading, we are more optimistic about the simultaneous rise of volume and price in the high-end and sub high-end price bands in the future.
Risk tips: macroeconomic weakness, lower than expected price increase at the factory end, food safety problems.
