Baijiu: expected to stabilize, leading valuation repair can be expected. 1-2 months of operating earnings report, Baijiu company’s debut is beautiful, laying the foundation for growth throughout the year, Kweichow Moutai Co.Ltd(600519) 12 month revenue and profit growth of double 20%, exceeding the market expectations, Baijiu consumption season, the market price as the core point of view, Wuliangye Yibin Co.Ltd(000858) recently vigorously promote the implementation of marketing strategy, put price control to a higher position, the main brand takes the core five as the core, and the control volume is very high. The launch of cultural and creative products and non-standard products will increase, restore channel profits, boost channel confidence, classic Wuliangye Yibin Co.Ltd(000858) optimize quota control, create group purchase direct sales channels and form effective circle marketing. The price rise of general five is expected to boost the overall price of Baijiu and drive the recovery of confidence in channels and funds. From January to February, the revenue of sub high-end Fen Liquor increased by more than 35% and the profit increased by more than 50%. From January to February, the revenue increased by about 120% and the profit increased by about 130%. From January to February, the revenue increased by about 25% and the profit increased by about 26%. After the upgrading of Yanghe’s new products, the market recognition of dream 6 + is high, the crystal version of dream 3 starts to speed up, and the channel enters the stage of virtuous circle. Meanwhile, the stabilization and recovery of external environment has positive effect on the enhancement of liquor consumption demand. At the present time, we will continue to focus on the definition of PEG and the low Wuliangye Yibin Co.Ltd(000858) dimension, and continue to push the high-end Baijiu Wuliangye Yibin Co.Ltd(000858) (22 year valuation 24x) and Laojiao (22 year valuation 30x). We suggest that we should pay attention to Moutai, attack and defense, and look at the old wine, the Fen, the Baijiu, the alcoholic, etc.
Beer: the cost of raw materials began to fall, and the epidemic began to improve before the peak season. The recent sharp rise in aluminum prices under the influence of geopolitics has triggered concerns about the pressure on beer costs. From the cost side, the beer industry has basically completed the annual / semi annual price locking of barley, and the price locking of packaging materials such as glass bottles and aluminum cans for about 1-2 quarters. From the semi annual dimension, the sharp rise in aluminum prices will not have a great impact on the cost side in the short term. From the marginal slope, glass bottles account for a large proportion of the cost of raw materials, and the price of glass bottles has fallen to a low level. Aluminum accounts for about 10% – 15% of the cost of raw materials (depending on the canning rate of different enterprises). It is estimated that the upward pressure on the cost in 22 years will be slower than that in 21 years. From the perspective of sales volume, the impact of the epidemic in 22 years has passivated the beer consumption scene day by day. From the perspective of ton price, major beer enterprises in 21h2 announced price increases, and the price increase effect is expected to be reflected in 22q2. In the whole year of 22, we are still optimistic about the rise of gross profit margin under the smooth conduction of price increase. From the perspective of high-end, China Resources beer / Tsingtao Brewery Company Limited(600600) / Chongqing Brewery Co.Ltd(600132) / Beijing Yanjing Brewery Co.Ltd(000729) has set relatively high growth requirements for the sales volume of more than 8 yuan, and the high-end trend of beer is expected to be further strengthened in 22 years. On the whole, we believe that the beer industry is expected to continue to enjoy the price increase dividend in 22 years. The ton price of the industry will increase by about 5% – 7%, and the marginal upward slope of ton cost will slow down, which is expected to be about 3% – 4%. Before the peak season in April, we should actively look forward to the layout opportunities of the beer sector.
Condiments: watch the trend of the epidemic and the implementation of price increases, and watch for long-term recovery. Looking forward to 2022, the epidemic situation is disturbed repeatedly, the price of soybean raw materials may be difficult to fall, and the pressure of demand and cost needs to be released. However, with the de inventory of channels, the impact of superimposed community group purchase has weakened, and the industry is expected to show a weak recovery. At the current time point, the suppression of condiment fundamentals in this round of epidemic may be the main factor, including the suppression of consumption demand at the catering end and the suppression of consumption power at the residents’ end. The condiment demand under the epidemic may be difficult to be substantially improved. In addition, it is necessary to continuously track the price increase landing and channel inventory. In terms of price increase, Haitian has made good progress in price increase, and the price increase time window of other brands is late. It is expected that the transmission of price system is still in progress. In terms of inventory, some companies took the initiative to remove inventory in 2021. Before the price increase, the industry inventory has tended to be benign. In the follow-up, under the influence of the price increase policy and Spring Festival stock preparation, it is normal for the inventory to rise. After the Spring Festival, the dynamic sales are expected to gradually fall back to a benign level. In the long run, the epidemic will eventually end, the negative impact does not have long-term sustainability, and it is difficult for the condiment industry to have a large impact similar to that brought by 2021h1 community group purchase. Fundamental repair is the general trend.
Dairy products: the trend of centralization continues to evolve, and the leading dairy industry continues to benefit. Recently, the infant formula industry committee of China Nutrition and health food association has approved a project and plans to discuss and develop group standards in relevant fields such as children’s milk powder, which is conducive to the further standardization of children’s milk powder categories. In the process of industry standardization and elimination of backward production capacity, leading enterprises continue to benefit. Yili announced this week that the offeror holds 59.17% shares of Aoyou. This offer has been closed and will not be revised or postponed. The acquisition of Aoyou will be further promoted; Mengniu announced that it plans to sell 48.66% equity of Ainiu cattle to modern animal husbandry for 187 million yuan. While expanding market share, leading enterprises continue to integrate and optimize the industrial chain and consolidate their competitive advantage through capital advantages. Due to the continuous production of new upstream production capacity and the increase of raw milk supply, although the milk price is still high, the pressure on the cost of raw milk this year is expected to be weaker than last year. In the production cost of dairy products, raw milk accounts for a relatively high proportion, and the impact of the rise in the price of packaging materials is less than that of other popular drinks. Although the epidemic has an impact on demand, it has also improved consumers’ health awareness to a certain extent. Yili’s business briefing from January to February also verified that the demand is still stable and optimistic about the 22-year dairy product allocation opportunity.
Snack food: the disclosure season of the annual report has arrived, focusing on the recovery of high-quality leading performance. The recent epidemic situation in many places has repeatedly affected terminal consumption, and the sector is still under pressure in the short term. However, since 21q3, companies in the leisure food sector have actively adjusted the investment of products, channels and expenses in response to the pressure of rising costs, fragmented channels and weak terminal consumption, and have achieved preliminary results. The performance disclosure period of 2021 annual report has expired, and the performance of Chacha Food Company Limited(002557) performance forecast is outstanding. It is suggested to pay attention to the performance improvement of leisure food leaders.
Frozen baking: channel diversification is the focus of this year, and cost pressure has been paid attention to for 22 years. Affected by the epidemic in the first quarter, the purchase intention of bakeries and other channels may be suppressed to a certain extent, the price of palm oil rises, and the price trend of raw materials in the later stage deserves attention, which may affect the profit performance of the company. We believe that Ligao’s growth is not afraid to worry. Looking forward to 22 years, the supply side capacity will continue to fall, and the sales will gradually get rid of the capacity constraints; On the channel side, except Sam, the company will conduct diversified layout in baking and catering channels; On the product side, there is still great room for improvement in cassava and frozen cake; The price increase on the profit side can offset the pressure of rising costs.
Investment suggestion: Baijiu sector: the value of high-end liquor is obvious, the secondary high-end is still in the upward cycle, adhere to the growth leader, the real estate Baijiu benefited from epidemic situation, and focus on Kweichow Moutai Co.Ltd(600519) Wuliangye Yibin Co.Ltd(000858) Luzhou Laojiao Co.Ltd(000568) Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) Jiugui Liquor Co.Ltd(000799) Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) Anhui Gujing Distillery Company Limited(000596) Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) / Sichuan Swellfun Co.Ltd(600779) Anhui Kouzi Distillery Co.Ltd(603589) Beijing Shunxin Agriculture Co.Ltd(000860) . Beer sector: high-end continues to accelerate, short-term sales fluctuations do not change the upward trend of performance, focusing on Chongqing Brewery Co.Ltd(600132) / Tsingtao Brewery Company Limited(600600) / Beijing Yanjing Brewery Co.Ltd(000729) / China Resources beer / Guangzhou Zhujiang Brewery Co.Ltd(002461) , etc. Condiment sector: focus on Foshan Haitian Flavouring And Food Company Ltd(603288) / Qianhe Condiment And Food Co.Ltd(603027) / Jonjee Hi-Tech Industrial And Commercial Holding Co.Ltd(600872) / Chongqing Fuling Zhacai Group Co.Ltd(002507) / Jiangsu Hengshun Vinegar-Industry Co.Ltd(600305) etc. Dairy products sector: focus on Shanghai Milkground Food Tech Co.Ltd(600882) / Inner Mongolia Yili Industrial Group Co.Ltd(600887) / Bright Dairy & Food Co.Ltd(600597) / New Hope Dairy Co.Ltd(002946) / Mengniu Dairy industry, etc. Snack food sector: we should still focus on the main line of growth, pay attention to channel driven, and focus on Chacha Food Company Limited(002557) / Ganyuan Foods Co.Ltd(002991) / Juewei Food Co.Ltd(603517) / Zhou black duck / Yanker Shop Food Co.Ltd(002847) , etc. Frozen baking sector: under the background of rising labor costs and store rents, catalytic frozen baking dough is widely used, and the track is booming, focusing on Ligao Foods Co.Ltd(300973) / Namchow Food Group(Shanghai) Co.Ltd(605339) / Zhengzhou Qianweiyangchu Food Co.Ltd(001215) , etc. Special liquor and beverage sector: pre mixed liquor and energy drinks are good tracks in Changpo, focusing on Shanghai Bairun Investment Holding Group Co.Ltd(002568) (improved quarterly) / Eastroc Beverage (Group) Co.Ltd(605499) (exceeding the expectation in the annual report), etc.
Risk warning: macroeconomic downside risk; Food safety issues; Intensified market competition; The price increase was less than expected
