The recent epidemic, geopolitics, liquidity and other multiple factors are superimposed, and the market pessimism is constantly fermenting, resulting in a significant correction in the sector. The valuation of many high-quality companies has been relatively reasonable. For example, the high-end Wuliangye Yibin Co.Ltd(000858) is in its early 20s, and the valuation of the leaders of Yili, Haitian, Anji, Juewei, Tsingtao beer and other sub circuits has reached a lower level. The industry fundamentals are still strong. The data from January to February are generally higher than expected. Although there are repeated outbreaks in March, the probability of annual profit forecast does not need to be reduced. In addition, the recent introduction of various friendly policies has gradually reversed the pessimistic expectations.
There is still some uncertainty in the external environment, and it is difficult to figure out the short-term trend. At the current time, we suggest looking for value in the long term and giving priority to companies with strong competitive advantages and strong performance certainty. When the market is pessimistic, it is easy to expand negative emotions and even ignore the underlying logic of industry competition. In the recent communication, we found that there are not a few investors who lowered the profit expectation of the core target, based on a few words or short-term phenomena tracked by the channel, such as anxious scene blockade affecting the sales of Tsingtao beer, anxiety about the epidemic situation in Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) Nanjing, entanglement with the performance pressure of Jue Wei in the first quarter, doubt about the contribution of new products of Anji to profits, and molasses with uncontrollable cost will drag angel. All concerns are mostly focused on the short term. Such companies have their own core competitiveness in their respective fields. There are many callbacks at present, and the value is prominent from a long-term perspective.
Investment strategy: the short-term epidemic situation is disturbed, but we still adhere to the scenario recovery logic. We believe that precise control can remove the constraints on consumption, make consumption an important starting point for restoring and stimulating the economy, and drive the recovery of demand. The pessimistic moment is just now, and the dawn is at hand. At the same time, the market also has full expectations for rising costs, and the logic of raising prices and reducing costs is still tenable. At the moment, we will enter the performance disclosure period, and recommend the following high-end Shede Spirits Co.Ltd(600702) , Sichuan Swellfun Co.Ltd(600779) , Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , Jiugui Liquor Co.Ltd(000799) , etc., high-end Wuliangye Yibin Co.Ltd(000858) , regional Baijiu, Gujing, etc. In terms of popular goods, the cost is rising, the scene is weakened, and there may be pressure in the short term. However, in the long term, the logic of “price increase and cost reduction” is still tenable. 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) , Angel Yeast Co.Ltd(600298) , etc.
Risk warning: the impact of the epidemic may be repeated; Demand recovery is not strong enough; Food safety issues, etc
