Key investment points
The change of the leader of the double dish: the change of the leader is not only the change of the flavor, but also the change of the core competitiveness. 1) Before 1988, in the era of material shortage, production capacity was the king, and the volume of fragrant Fen Liquor became the leader; 2) From 1990s to 2013, in the process of rapid economic improvement, gradual enrichment of product types and gradual matching of product supply and demand, the industry realized the simultaneous rise of volume and price, and channel is the most important factor; Luzhou flavor prevails, Wuliangye Yibin Co.Ltd(000858) relying on large-scale commercial system and OEM to achieve rapid growth; 3) Since 2013, there has been overcapacity. The development of the industry is driven by consumption upgrading. The brand is the logo that can best identify high-quality products. Maotai’s strong brand strength and the identity of sauce and wine leader have become the double benchmark of industry brand + price.
Competition pattern: Maotai has significant advantages, and the competition pattern in the 1000 yuan price segment is relatively stable. Driven by the upgrading of consumption, the high-end price belt is in the expansion stage of both volume and price. As the most important competitiveness of high-end wine, the brand will maintain a relatively stable competition pattern, and the strong will remain strong. In terms of price bands, 1) Maotai stands firm in the super high-end price band of more than 2000 yuan, and its advantages are still being strengthened; 2) In the 1000 yuan price segment, on the one hand, Wu, Lu and Lang are the main oligarchic competitors, and the long-term stable operation can be expected. On the other hand, the competition pattern of 1000 yuan price with oligarchs is difficult to change in the short term, but the products still have the basis of foreign exchange growth. The advantages of Maotai 1935 and Fenjiu’s Qinghua 30 revival version are more significant.
Future space: both volume and price can be expected to rise. In the long run, the market space of high-end wine is about 300 billion yuan, with a tight balance between supply and demand. 1) On the demand side, with the increase of high net worth people, the proportion of high-end consumers willing to pay premium for high-quality products has been expanding in recent years, that is, the proportion of high-end consumers is also increasing. The main consumers of high-end wine are China’s high net worth people and the upper middle class. We estimate that the number of high-end wine consumers will be 590 million by 2025. With the upgrading of consumption, the consumption concept will be improved, Consumers’ demand for high-end wine is expected to continue to increase. We conservatively predict that the total demand for high-end wine will be 107000 tons and the ton price of high-end wine will reach 2.86 million yuan / ton by 2025. It is estimated that the market scale of high-end wine will be 306.2 billion yuan in 2025 and CAGR = 17% in 20202025. 2) From the supply side, the existing high-end liquor enterprises are on the way to complete their 14th five year plan step by step, maintaining steady growth and stable high-end pattern; At the same time, there will also be high-end products successively launched by famous and high-quality brand liquor enterprises in the 1000 yuan price belt. The exchange volume will increase in the 1000 yuan price belt and continue to assist in expanding the space of the high-end price belt. Through our calculation, we expect that the market scale of high-end liquor will be close to 300 billion yuan by 2025, and the compound growth rate from 2020 to 2025 will be 15% +.
From the perspective of the company: the rating is the observation index of prosperity, which is optimistic about the development of high-end liquor enterprises for a long time. In terms of quantity, there is a tight balance between supply and demand; In terms of price, consumption upgrading will continue to drive up the price. Therefore, the price is very important. The change of the price of the core products of liquor enterprises is a vane to observe the operation and stock price trend of the enterprises. The current price of Moutai is stable at more than 2000 yuan, and the price of high-end Baijiu keeps stable, and the industry boom is still there. We recommend Kweichow Moutai Co.Ltd(600519) , and look forward to Wuliangye Yibin Co.Ltd(000858) , Luzhou Laojiao Co.Ltd(000568) , from the perspective of brand strength, profit elasticity of the company, month on month improvement of internal efficiency and performance certainty.
Risk tips: weak macro economy, less than expected reform, food safety problems
