Some growth stock targets represented by secondary high-end stocks have been deeply adjusted with the market recently, and their valuation and market value have been cost-effective. We have prompted the logic of secondary high-end month on month recovery and recommended them since the weekly observation point at the beginning of the month. In the view of last week, we re emphasized the recommendation of such targets. This week, Fenjiu, drunkard and other companies disclosed their operating data from January to February, and their performance exceeded market expectations, driving the stock price to rebound, which was in line with our early prediction. We believe that in the case of weak market, performance is the key, the valuation of sub high-end and other targets has fallen more, and there are deterministic repair opportunities under the catalysis of performance.
The secondary high-end is the amplifier of the industry boom. When the market weakens, the pessimistic expectation leads to the undervaluation of the sector. Secondary high-end enterprises mostly rely on channel expansion to achieve growth. In addition to single point volume and price growth, they also rely on the expansion of dealers or outlets. Such growth mode can amplify the boom and depression of the industry. Therefore, such companies fluctuate greatly when the industry boom changes. During the Spring Festival, due to the weakening of the marginal wealth effect and the impact of the epidemic (the epidemic spreading area is the main market for the expansion of the secondary high-end), the secondary high-end market showed a flat performance in local market research, the subsequent market weakened, macroeconomic concerns were increasing, and the market expressed concern about the achievement rate of the performance of the secondary high-end enterprises, resulting in the sector being seriously underestimated. In addition to the secondary high-end, other stocks with differences are also undervalued, such as Wuliangye Yibin Co.Ltd(000858) etc.
The growth of secondary Baijiu is still a high growth after the return of normal growth, and its performance is highly volatile. Therefore, we need to pay attention to rhythm. On the basis of low base in 2020, sub high end Baijiu achieved super fast growth in 2021. In 2022, the base factor faded and the growth rate returned to normal. After the transition, the growth rate of medium and high-end liquor stocks has slowed down to about 600 times, and the growth rate of medium and high-end liquor stocks has been fully adjusted. For example, the growth rate of medium and high-end liquor stocks has still jumped to about 600 times, which has been fully reflected in the current market. However, it is a fact that the secondary high-end performance fluctuates greatly, the rhythm of performance release is the key, and the first quarter performance is worry free. It is suggested to focus on the layout.
Investment strategy Baijiu Baijiu Baijiu is a strong investment company. We think that Baijiu enterprise has strong performance, and the early stage is pessimistic and adjusted more. Now it enters the period of performance disclosure. Many valuations fall down and the key can be focused on, such as Shede Spirits Co.Ltd(600702) , Sichuan Swellfun Co.Ltd(600779) , Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , Jiugui Liquor Co.Ltd(000799) , etc. in high-end liquor, Wuliangye Yibin Co.Ltd(000858) in high-end liquor, Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) in the regional liquor, and Gujing. In terms of popular goods, the cost is rising, the scene is weakened, and there may be pressure in the short term, but the logic of “price increase and cost reduction” is still tenable in the long term. Beer, condiments, quick freezing and other tracks are mainly recommended, such as Tsingtao Brewery Company Limited(600600) , Foshan Haitian Flavouring And Food Company Ltd(603288) , Fu Jian Anjoy Foods Co.Ltd(603345) , Beijing Yanjing Brewery Co.Ltd(000729) , Qianhe Condiment And Food Co.Ltd(603027) , etc.
Risk warning: the impact of the epidemic may be repeated; Demand recovery is not strong enough; Food safety issues, etc
