Core view
Looking forward to 2022, there is still uncertainty in the overall macro environment, and the tide of cost driven price increase has come. Under this background, we suggest paying attention to 1) enterprises with good competition pattern, and the transmission of price increase is relatively smooth; 2) At present, enterprises with low penetration, high terminal demand and high industry prosperity. In the food and beverage sector, Baijiu business model is best, the industry continues to upgrade, Baijiu maintains a relatively high growth rate. We recommend that we pay attention to the steady high-end high-end and high resilient sub high end liquor companies.
Baijiu: the trend of steady growth of high-end liquor is guaranteed. The rapid expansion and nationalization of the secondary industry is advancing smoothly, and jointly promote the competition of sub high-end liquor enterprises, and the differentiation is intensified. Double section dynamic sales show that the strong demand trend of high-end wine remains unchanged, maowu Luzhou dynamic sales perform well, and the inventory level remains low. At present, high-end liquor enterprises have become the main tone of controlling volume and price. At the same time, they strengthen channel control and crack down on channel hoarding and fleeing, so as to lay a solid foundation for good performance growth in 2022. The demand for high-end liquor is strong, the inventory level is low and good fundamentals support the price increase of liquor enterprises. In terms of secondary high-end, liquor enterprises compete around product structure upgrading and national layout. In the sub high-end price belt, liquor enterprises with profound layout and strength in product structure upgrading and nationalization have obvious competitive advantages. Regional leaders will continue to increase under the support of product structure upgrading and nationalization.
Beer: price increase + product upgrading + scenario recovery, and the profit is expected to increase sharply in 2022. In the third quarter, under the negative effects of repeated epidemic, extreme weather and upward cost pressure, the sales volume of high-end products increased significantly, driving the overall gross profit margin to grow against the trend, and the logic of high-end industry was clear. Since January 2021, the upstream raw materials of beer have continued to rise, prompting liquor enterprises to transfer the pressure on the cost side through price increase. Since the first half of the year, the head liquor enterprises have arranged price increase one after another. Looking forward to 2022, it is expected that under the cost pressure and the logic of high-end industry, the head liquor enterprises with strong ability to raise prices will have high certainty of subsequent price increases. Condiment: pay attention to the conduction velocity under the background of price increase. Since 2021, the price of bulk commodities has increased, resulting in great cost pressure. Driven by the cost, Haitian, the leader of soy sauce, took the lead in raising the price, and then the prices of competitive products have been raised one after another. We expect the industrial price increase to be conducted relatively smoothly, and pay attention to the transmission speed of price increase and terminal demand of various companies.
Dairy products: the overall prosperity of the industry is upward, and the optimization trend of competition pattern continues. At present, the policy orientation and the development of the industry itself are promoting the optimization of the competition pattern of dairy products, and the industry concentration will increase rapidly. Under the rising trend of raw milk prices in the upstream, dairy leading enterprises with core milk source advantages and perfect product matrix in the downstream will have greater development space. We expect that the gross sales difference of dairy products is expected to improve in 2022, and we are optimistic about the low-temperature milk and cheese industry.
Investment advice
Plate allocation: Baijiu > beer > condiment > dairy products > snack food. Baijiu: we should pay attention to high-end liquor enterprises Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Luzhou Laojiao Co.Ltd(000568) , and Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , Anhui Gujing Distillery Company Limited(000596) and Jiugui Liquor Co.Ltd(000799) with high potential development. Beer: it is recommended to pay attention to Tsingtao Brewery Company Limited(600600) with high growth expectation in future performance; Dairy products: it is suggested to focus on Inner Mongolia Yili Industrial Group Co.Ltd(600887) in the three aspects of production capacity, channel and product; Other popular foods, benefiting from Chacha Food Company Limited(002557) , Juewei Food Co.Ltd(603517) , Ligao Foods Co.Ltd(300973) , etc.
Risk statement
Macroeconomic slowdown, poor transmission of price increase, weak end consumption, intensified industry competition, food safety, etc.
