Key investment points
Baijiu week tracking: Kweichow Moutai Co.Ltd(600519) 1) contract for the custom wine has been signed: feedback from the recent channel research, Moutai dealers have begun to sign the contract for the custom wine, and the volume and price of the customized wine are unchanged. At the same time, it is expected that the signing of Feitian contract is approaching, and the specific content of Feitian contract has not been determined. We believe that the signing of customized wine contract does not mean that the possibility of price increase / marketing system reform has completely failed. In the medium and long term, Maotai has strong dominance over the channel, the channel is profitable, and still has strong potential for price increase. 2) Increase in the cost of non-standard Maotai for dealers: non-standard Maotai mainly includes high-quality products, Chinese zodiac, vintage wine, etc. from this year, dealers’ non-standard Maotai basically take goods through their own stores, and the price is close to the guide price. Therefore, the cost of non-standard Maotai dealers has increased this year. 3) The new batch of quota of Maotai treasures increased revenue, and the growth was guaranteed in March: according to the channel feedback this week, each Maotai dealer added a quota of 40 boxes of treasures. Based on the ex factory price of 4299 yuan and about 1500 Maotai dealers, it is expected to contribute about 1.37 billion statement revenue (40 6 4299 1500 / 1.13) after deducting consumption tax. According to the business briefing from January to February released by the company, it can be estimated that the revenue in March of 21 years will be 11.265 billion yuan. Considering this treasure quota alone, it can contribute about 12.2% revenue growth in March. At the same time, based on the 20% revenue growth announced by the company from January to February, the first quarterly report of the company can be expected to start well.
Kweichow Moutai Co.Ltd(600519) : there is no need to be overly pessimistic about the price decline. Historical experience has proved that Maotai’s demand is supported: 1) the week-round weakening of the price: according to today’s wine price data, the whole box / bulk bottle price of Feitian Maotai fell by 150 / 60 yuan to 2950 / 2680 yuan this week, which is mainly due to the easing of supply tension after the last batch of goods were delivered after the festival. At the same time, the channel feedback shows that the demand has weakened due to the dual effects of off-season and epidemic situation. However, we believe that Feitian Maotai has a unique brand strength and strong support, and there is no need to worry too much about the demand. 2) Referring to the experience of the epidemic in 2020, Feitian’s rating is not more worrying than excessive concern: first, under the epidemic in 2020, Feitian’s rating once fell from the high of 2400 yuan at the beginning of the year to about 2000 yuan, but the rating recovered significantly after the epidemic eased. Second, the bid price has increased significantly year-on-year, and the short-term correction is also normal. Since 2020, Feitian Maotai has been in short supply, and the wholesale price of whole boxes / bulk bottles has continued to rise. At present, the aggravation of the epidemic has weakened the wholesale price, which is also a normal correction. Third, the whole box price is affected by supply, and the bulk bottle reflects the real demand. In the same period last year, the wholesale price of Feitian whole box / bulk bottle was 3230 / 2465 yuan, and now it is 2950 / 2680 yuan. The year-on-year decline in the whole box wholesale price is mainly due to the implementation of Feitian all unpacking policy in 21 years, and the box grass is highly scarce. The wholesale price of bulk bottles still increased significantly year-on-year. From the perspective of month on month, despite the strong demand impact of the Spring Festival peak season, compared with the end of the last light season (early December of 21), the wholesale price was only about 2600 yuan at that time. Therefore, from the perspective of year-on-year and month on month, the wholesale prices of bulk bottles have not weakened significantly.
Baijiu week tracking: Wuliangye Yibin Co.Ltd(000858) : feedback from channel research, this week, Pu five has not yet resumed delivery, and the price of Pu five has been around 965970 yuan. The off-season accounts for a relatively small proportion of the whole year. It is expected that the control of goods and price will not have a significant impact on the performance of the whole year. We are optimistic about the valuation repair brought by the upward breakthrough of wholesale price this year Luzhou Laojiao Co.Ltd(000568) : the price of 1573 high-grade national cellar is maintained at 920 yuan around the ring, and the price of 640 low-grade national cellar is about 640 yuan. According to channel feedback, low-grade national cellars grew well, especially in North China. The proportion of low-grade national cellars continued to increase during the Spring Festival.
Chongqing Fuling Zhacai Group Co.Ltd(002507) : price increase will drive revenue growth, and the profit elasticity in 2022 can be expected. In 2021, the company achieved a revenue of 2.519 billion yuan, a year-on-year increase of 10.82%; The net profit attributable to the parent company was 742 million yuan, a year-on-year increase of – 4.52%; The net profit attributable to the parent company after non deduction was 694 million yuan, a year-on-year increase of – 8.49%. Among them, 2021q4 achieved a revenue of 563 million yuan, a year-on-year increase of 18.74%; The net profit attributable to the parent company was 238 million yuan, a year-on-year increase of 45.75%; The net profit attributable to the parent company after non deduction was 209 million yuan, a year-on-year increase of 32.41%. (1) The price increase promoted the annual income growth, and the Q4 price increase was significantly driven. In 2021, the revenue of mustard, radish, pickle and other categories was 2.226 billion yuan, 69 million yuan, 159 million yuan and 62 million yuan respectively, with a year-on-year increase of 12.73%, – 30.77%, 3.35% and 48.10% respectively. In 2021, the sales volume of the core category mustard decreased by 1% year-on-year to 134800 tons, and the average price increased by 13% year-on-year to 16500 yuan / ton. According to the channel research, it mainly benefited from the indirect price increase of reducing the specification in 2020. The revenue growth rate of 2021q4 company was 18.74%, which was significantly faster than that of Q2 and Q3. The main reasons are as follows: first, according to the announcement, the company adjusted the ex factory prices of some products on November 12, and the increase range of each category was 3% – 19%, which promoted the faster increase of Q4 average price; Second, the effect of early air advertising gradually appeared, driving the growth of sales; Third, the company’s new low salt products also contributed to some sales growth. By region, the revenue of North China, Northeast China, East China, central China, southwest, northwest, central China and South China in 2021 was 293 million yuan, 108 million yuan, 420 million yuan, 304 million yuan, 210 million yuan, 215 million yuan, 244 million yuan and 692 million yuan respectively, with a year-on-year increase of 9.85%, 13.80%, 23.19%, 13.16%, – 10.49%, 2.95%, 6.15% and 15.15% respectively. In 2021, the company continued to promote the sinking of channel construction, with a net increase of 382 to 3030 dealers, a year-on-year increase of 14%.
(2) the gross profit margin is under pressure due to the rise of costs, and the decrease of Q4 sales expense rate releases the profit elasticity. Affected by market supply and demand, the prices of the company’s main raw materials, green vegetable head and pickled mustard semi-finished products, increased by about 80% and 42% year-on-year respectively in 2021, resulting in a year-on-year increase of about 13% in the cost of the company’s main business. In 2021, the company’s comparable gross profit margin was 55.97%, a year-on-year decrease of 2.29 PCT; The gross profit margin of 2021q4 comparable caliber was 52.23%, a year-on-year decrease of 7.49 PCT. Under comparable standards, the company’s sales expense rate increased by 6.28 PCT to 22.47% in 2021, mainly due to the investment of 240 million yuan in strengthening brand publicity; In 2021q4, the sales expense rate of comparable caliber decreased by 7.59 PCT to 8.28%, which promoted the release of profit elasticity in the fourth quarter. Affected by the pressure of gross profit margin and the increase of sales expense rate, the net profit margin of the company decreased by 4.73 PCT year-on-year in 2021; In the fourth quarter, the net profit margin of 2021q4 increased by 7.84 PCT year-on-year due to the sharp decline of sales expense rate. (3) In 2022, the price increase will drive the revenue growth, the cost will fall, and the profit elasticity can be expected.
According to the financial budget announcement of the company in 2022, it is estimated that the revenue in 2022 will increase by 15% year-on-year to 2.896 billion yuan, and the gross profit margin will increase by 6.64 PCT to 59% year-on-year. The revenue growth will mainly come from the contribution of direct price increase at the end of 2021. At the same time, the effect of early product promotion investment is expected to gradually appear, and the release of production capacity of northeast radish base also contributes to some increment. At the beginning of 2022, the price of green vegetable head acquired by the company fell back to the normal level, superimposed with the contribution of price increase, and the annual profit elasticity is expected to be greatly released.
Beer: from January to February, the production and sales volume recovered to the pre epidemic level, and it is expected to be under pressure in the short term in March. According to the data of the National Bureau of statistics, the output of the beer industry from January to February was 5.309 million kiloliters, a year-on-year increase of 3.6%, an increase of 0.1% compared with the same period in 2019, returning to the pre epidemic level. According to the party construction of state-owned enterprises in Guangzhou, Guangzhou Zhujiang Brewery Co.Ltd(002461) from January to February, beer sales increased by 8.78% year-on-year, with good sales performance. We believe that the total performance of the beer sector from January to February was excellent, mainly due to the good recovery of catering. From January to February, the catering industry achieved an income of 771.78 billion yuan, a year-on-year increase of 8.9%, an increase of 4.7% compared with the same period in 2019. Compared with the median single digit growth before the epidemic, the effect of accurate and scientific prevention and control is obvious. Since March, the national epidemic has shown a strong repeated trend. It is expected that the production and sales volume of the beer industry will be under pressure in the short term. We continue to emphasize that we should focus on the logic of industry price increase and be optimistic about the high-end development of the sector.
Toly Bread Co.Ltd(603866) : the performance has gradually stabilized, and the momentum in East and central China is good. 1) The demand for bread in Q4’s main business has recovered significantly, and the momentum in East and central China is good. 21q4 revenue was 1.672 billion yuan, a year-on-year increase of + 5.08%; The net profit attributable to the parent company was 195 million yuan, a year-on-year increase of -0.95%; Deduct non net profit of 186 million yuan, a year-on-year increase of – 1.02%. In terms of regions, the revenue of North China, Northeast China, East China, central China, southwest, northwest and South China in the whole year of 21 years was + 2.3%, + 2.8%, + 16.9%, + 48.4%, + 6.7%, – 0.1% and 15.5% respectively year-on-year. The growth momentum of central China, East China and South China is good, which is the main engine of growth. Among them, the year-on-year growth rate of 21q4 was + 4.1%, – 2.1%, + 24.9%, + 16.3%, + 7.2%, + 5.9%, + 10% respectively. The decline in Northeast China was mainly due to the influence of 21q4 weather and epidemic situation. East and central China maintained stable growth and accelerated month on month compared with Q3. By product: the revenue of 21q4 bread was 1.67 billion yuan, a year-on-year increase of + 6.9%, a month on month increase of 3.8pct, and the demand for bread recovered significantly, mainly because the revenue recognized at the wrong time of the Mid Autumn Festival affected the overall revenue performance of Q4. 2) The epidemic relief of Social Security + low return rate lead to high profit base + rising raw material prices lead to pressure on the profit side of the company. The net interest rate attributable to the parent company in 21q4 was 11.66%, with a year-on-year increase of -0.71pct and a month on month increase of + 0.11pct; Among them, the sales expense rate is 8.48%, and the gross sales difference is 17.93%, with a year-on-year difference of -0.75pct. Considering that it is mainly caused by the impact of phased social security relief policies in the same period last year + the rise in the price of some raw materials + the increase of promotion efforts in the current period and the increase of discount rate. According to the feedback of channel research, the company raised the price of some products at the end of last year. The transmission speed of price increase in different regions is different. On the whole, we expect that the price increase of 22q2 can be transmitted in place and reflected on the statement end. The management expense rate was 2.3%, with a year-on-year increase of -0.04pct. 3) The medium and long-term logic of the short-term insurance track is clear, the company’s new production capacity has been put into operation, and the moat of the supply chain has been deepened. Short term bread meets the consumption trend of consumers’ health needs and is a track with medium and long-term growth. At the same time, the company’s China insurance products are still being distributed this year, and it is expected to make new incremental contributions on the revenue side. In terms of production capacity, the layout of the company’s production bases across the country has been improved. It is expected that the production capacity of Liaoning Shenyang, Jilin Changchun, Zhejiang, Shandong, Fujian, Guangxi and other places will be released in succession in 22-23 years.
Chacha Food Company Limited(002557) : Q1 has good dynamic sales volume and business toughness. According to the feedback of channel research, the current channel inventory is benign and the dynamic sales are in good condition. Q1 is expected to maintain positive growth as a whole under the pressure of high base. At the same time, we believe that the epidemic has a positive effect on Qiaqia terminal digestion inventory, and the delivery rhythm has not been greatly affected by the epidemic at present. At the same time, considering that the market of the company’s raw material sunflower and the oil sunflower planted abroad are independent of each other, and nearly 70% of the procurement was completed years ago, it is less likely that the raw material of sunflower seeds will rise sharply in the future. After the price increase of sunflower seeds last year, the price has been sorted out, and the profits of factories and merchants have increased slightly. We expect the company’s annual performance growth to be supported and its business toughness to be prominent.
. The rise and fall in the month were Kweichow Moutai Co.Ltd(600519) (- 4.61%), Wuliangye Yibin Co.Ltd(000858) (- 11.63%), Chongqing Fuling Zhacai Group Co.Ltd(002507) (- 13.30%), Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) (- 14.90%), Anhui Gujing Distillery Company Limited(000596) (- 15.84%), Juewei Food Co.Ltd(603517) (- 17.04%) respectively, and the portfolio yield was – 12.89%. Over the same period, the Shanghai Composite Index fell 6.10%, and the portfolio was 6.79% lower than that of the Shanghai Composite Index.
Investment strategy: warm spring flowers bloom, active layout. After the year to date adjustment, some industry leaders took the lead in showing good achievements from January to February. Combined with the steady growth of the two sessions and the policies of subsidizing some industries, we believe that the follow-up catering industry is also expected to usher in improvement. Considering that the valuation of core leading enterprises is relatively reasonable or slightly low, we suggest an active layout. Baijiu mainly pushed the strong, strong and strong Moutai, Wuliangye Yibin Co.Ltd(000858) and Luzhou Laojiao Co.Ltd(000568) . The second high-end companies mainly promoted the Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) and the regional high-end high-end Chinese dragon makers, and suggested that Jiugui Liquor Co.Ltd(000799) , Anhui Yingjia Distillery Co.Ltd(603198) and sacrifice that the potential energy had already been built up. Yili, pickled mustard, Chacha, Tsingtao Brewery Company Limited(600600) , China Resources beer, heavy beer, Anji, Ligao, Haitian, juewe, Yuanzu, Ganyuan, etc. are also recommended.
Risk tips: the risk of global and Chinese epidemic spread, the risk of large outflow of foreign capital, sauce and wine inventory and policy.
