1. In 2021, the food and beverage sector digested the overestimated value in the highly deterministic expectation and structural prosperity, and the industry’s comparative investment income ranked lower. Looking forward to 2022, the sector will usher in “dawn”:
We believe that industry research is the basis of industry fundamentals research, and the catering and creation of the demand side of the consumer industry is our program of concern. At present, the “bottom-up” close tracking of the food and beverage sector can basically be realized by looking at the daily market survey of pricing, fixed sales and inventory. The symmetry of information has significantly improved the efficiency and efficiency of market decision-making. It is objectively difficult to select stocks based on short-term “poor expectation”. We believe that we should base ourselves on the internal elements of the enterprise’s “fundamental triangle” and make industrial value discovery, Make investment decisions in combination with the triangle of “certainty”, “prosperity” and “valuation” and market style preference.
2. In 2022, we recommend to grasp the three main lines of “high quality, structure and scene repair”
The trend is judged: Baijiu enters the “third growth” stage, consumption upgrading is a long-term trend, strong differentiation, high concentration characteristics are significant, big cycle weakening, small cycle and industrial policy is more relevant, we are optimistic about the rapid expansion of the high-end price and the thousand yuan price segment, the second high-end price position is further divided into 500-800 yuan new high-end high-end, 300-500 yuan traditional high-end.
Principles and methods for the selection of 2022 targets: demand is the program. Under the expectation of weakening epidemic constraints, verify the transmission factors of consumption scenario recovery and price increase, and select high-quality leaders and high growth tracks around the triangle of landscape, certainty and Valuation:
Liquor and Spirits:
(I) we know that Baijiu “change” and “unchanged” can only know the way forward: the social attributes of Baijiu have not changed in essence, and the trend of concentration (upgrading to dominant brand, dominant producing area and dominant channel) has not changed. What has changed is the overall jump in consumer prices brought about by the increase in residents’ disposable income, as well as the optimization and improvement of marketing model.
（2） Adhere to the decision-making method of “brand, good business and management efficiency” in the fundamental triangle, in which the improvement of management efficiency is an important support for judging the inflection point of enterprise fundamentals, and pay attention to the equity incentive, employee shareholding and other high-quality development driving factors brought by the empowerment of enterprise governance improvement and the three-year action plan for state-owned enterprise reform (2020-2022);
（3） For soy sauce wine: we believe that soy sauce wine fever has accelerated the structural expansion and differentiation of the industry, especially the growth of 300 + times of high-end prices. Soy sauce fever originated from Maotai fever, which is an internal requirement for the upgrading of consumer demand. Relying on the standardized discourse system and channels of production areas, high gross profit, we have completed the brand echelon of “one super multi strong + new head camp” in three years with the support of capital; Sauce wine has changed from “channel fever” to “consumption fever”, and the regional “sauce” will continue in the future.
（4） Historically, the consumption tax has drawn profits from some industries in the short term, accelerated the clearing of backward production capacity in the long term, and fully benefited brands with high bargaining power, and increased the concentration.
Beer: the industry consensus has been reached in the competitive stage from “gauge modulus” to “profit price”. The high-end trend of beer remains unchanged. It is optimistic that the scene repair will bring a phased recovery of sales volume, and pay attention to the thickening of the price increase on the gross profit per ton price.
Popular products: the demand inflection point is upward, grasp the price transmission and consumption scenario repair elasticity, pay attention to the sub industries with significantly damaged demand in 21 years, and relevant companies in the catering industry chain such as quick-frozen food and prefabricated vegetables will benefit.
Condiment: the sector fluctuates weakly with four factors: demand, cost, inventory and price increase. After the marginal cost is improved, the leading companies will get out of undervaluation faster and release the performance elasticity brought by price increase.
Dairy products: demand recovers, the marginal of cost side is better, and the gross sales difference meets the inflection point.
Snack food: large industry, small company, preferably companies with product innovation ability.
Recommended object:
Baijiu: recommend Kweichow Moutai Co.Ltd(600519) , Luzhou Laojiao Co.Ltd(000568) , Wuliangye Yibin Co.Ltd(000858) , Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , Shede Spirits Co.Ltd(600702) , Anhui Gujing Distillery Company Limited(000596) , Anhui Yingjia Distillery Co.Ltd(603198) , Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) , and pay attention to Anhui Kouzi Distillery Co.Ltd(603589) and Jiugui Liquor Co.Ltd(000799) .
Beer: recommend Chongqing Brewery Co.Ltd(600132) , Tsingtao Brewery Company Limited(600600) , and pay attention to China Resources beer.
Popular products: recommend Angel Yeast Co.Ltd(600298) , Inner Mongolia Yili Industrial Group Co.Ltd(600887) , Foshan Haitian Flavouring And Food Company Ltd(603288) , Fu Jian Anjoy Foods Co.Ltd(603345) , Chacha Food Company Limited(002557) , Zhe Jiang Li Zi Yuan Food Co.Ltd(605337) , Ganyuan Foods Co.Ltd(002991) , Juewei Food Co.Ltd(603517) and pay attention to Ligao Foods Co.Ltd(300973) , Sanquan Food Co.Ltd(002216) .
Risk tips: 1) the recovery progress of offline consumption scenarios such as catering due to epidemic constraints is lower than expected; 2) The adjustment of industrial policies such as consumption tax exceeded expectations; 3) The impact of intensified industry competition and continuous rise in cost side exceeded expectations; 4) Food safety incidents.
