Market review last week:
Last week (March 14-march 18, 2022), the food and beverage sector (Shenwan) fell 3.63%, the Shanghai Composite Index fell 1.77%, the Shenzhen Component Index fell 0.95%, the Shanghai and Shenzhen 300 fell 0.94%. The food and beverage sector lost 1.85 percentage points to the Shanghai Composite Index, ranking 27th among the weekly rises and falls of Shenwan's 31 primary sub industries.
Core view: stick to the long boom track and pay attention to the poor market expectation
Baijiu: stick to the long and prosperous track, and the first quarter is a success. The Baijiu Industry Valuation center has experienced a relatively large valuation expansion since 2020, and now it has gradually dropped to a reasonable interval. Compared with 2021, it has obvious valuation digestion, and the performance is catalyzed as the leading driving factor in 2022. The first choice is the best fundamentals, and the high end Baijiu liquor with strong growth performance. The wholesale price of Maotai fell slightly this week, but in the long run, Maotai's rich channel profits and unique business model have built a solid moat. China's high net worth population has continued to grow in double digits to escort the demand side. The determination to reform and the optimization of product structure have continued to promote the rise of ton price. Secondary Baijiu liquor continued to increase during the Spring Festival, and the market potential is expected to have potential high growth targets. During the Spring Festival, the high-end liquor sales were robust, and dealers made positive contributions. Some of the Baijiu enterprises were slightly ahead of expectations. National sub high-end liquor enterprises pay more attention to maintaining the market price system and consumer terminal education in the process of national expansion. During the Spring Festival, the performance of willing to bid was strong, and the inventory was about 1.5 months Jiugui Liquor Co.Ltd(000799) , the revenue / profit of Fenjiu from January to February increased by 120% / 130% and 35% / 50% year-on-year, showing a bright performance. Under the long logic of consumption upgrading, the return of Spring Festival and the improvement of the epidemic situation, the strong local wine in Jiangsu and Anhui can start well in the first quarter.
Condiment: wait for the demand to boost, and performance repair is the long-term main line. From January to February, Alibaba online data showed that seasoning sales fell year-on-year, and the demand side is still weak. The price of raw materials such as soybeans continues to be high under the influence of geographical form, and may fluctuate at a high level in the short term. The industry has collectively raised the price in 2021. At present, the price transmission is still continuing, and the inventory of dealers in some regions is high. In the follow-up, we need to pay attention to the digestion of channel inventory. In the long run, the condiment industry has defensive attributes. After experiencing the double pressure of cost and demand this round, the leader strengthened its own advantages in adversity (for example, Haitian reduced the proportion of catering channels from 60% to 50%, and some turned to the family side). Under the Matthew effect, the industry concentration is expected to continue to improve.
Beer: the peak season of Q2 is coming, and we are optimistic about the opportunity of performance improvement and valuation cost performance of the section. At present, except for Chongqing Brewery Co.Ltd(600132) and Guangzhou Zhujiang Brewery Co.Ltd(002461) , there is still enough room to improve the net interest rate of Tsingtao Brewery Company Limited(600600) and China Resources beer. It is expected that the profit margin of China's beer industry will increase to 14.3% in 2025. Leading liquor enterprises are expected to raise prices at any time, which is expected to alleviate the pressure on the cost side. The industry's high-end logic is improved, the ton price is superimposed with good dynamic sales, and the performance growth momentum is strong; The advent of peak season and the good performance of historical sales data in Q2 boost market confidence. The high performance expectations of Tsingtao Brewery Company Limited(600600) and Chongqing Brewery Co.Ltd(600132) may drive the improvement of valuation. They still have a large space from the highest PE since 2017 and still have the valuation cost performance. Affected by the overall systemic risk of Hong Kong stocks, the valuation of China Resources beer has reached the safety margin and has great elasticity.
Investment advice
Plate allocation: Baijiu beer dairy products snack food condiment;
Baijiu: related targets: high-end liquor enterprises Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Luzhou Laojiao Co.Ltd(000568) and sub high-end liquor enterprises in the development potential of Fenfen, Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , Anhui Gujing Distillery Company Limited(000596) , Shede Spirits Co.Ltd(600702) , Jiugui Liquor Co.Ltd(000799) , Anhui Yingjia Distillery Co.Ltd(603198) ;
Beer: related targets: Tsingtao Brewery Company Limited(600600) with optimized product structure and Chongqing Brewery Co.Ltd(600132) with large amount of ussu;
Dairy products: relevant subject matter: Inner Mongolia Yili Industrial Group Co.Ltd(600887) , which makes concerted efforts in production capacity, channels and products.
Risk tips:
Baijiu price rise less than expected, terminal demand fell, food safety issues.
