Key investment points
Weekly News Express
Industry news: 1) in 2022, 1-2, the total output of Baijiu Enterprises above Designated Size reached 126.6 million liters (+5.4%). The cumulative output of beer enterprises is 5.309 million kiloliters (+ 3.6%); 2) Luzhou: Luzhou Baijiu exported 9 million 80 thousand yuan (+19.8%) in 1-2 months, mainly including 1573 of the national cellar and Qinghua Lang.
Company news: 1) Shede Spirits Co.Ltd(600702) : the company will speed up the national layout of the brand according to the strategy of “focusing on Sichuan, Hebei, Shandong and Henan, improving northeast and northwest, and breaking through East and South China”; 2) Langjiu: Hejiang Huayi ceramics phase I phase II kiln was ignited, and the annual production capacity of high-grade ceramic wine bottles increased to 40 million; 3) China Resources beer: Snowflake: it is planned to build a 400000 kiloliter / year production project in Xichang, which is more than three times the existing capacity.
Key information feedback this week
Jiugui Liquor Co.Ltd(000799) : in 2021, the nationalization was steadily promoted, the number of customers increased by about 600, and the number of alcoholic and internal reference stores reached 600; The proportion of internal reference remained 30%, the proportion of transparent clothes, red altar and inheritance increased, and the prototype of large single products appeared; The team of internal reference and drunkard has been increased to 300 and 700 people. 2022: 1) increase investment in brand publicity, strengthen communication with consumers, and pay attention to cultural connotation and team culture; 2) The core store will be built into a cultural communication platform, promoted at different levels and standards, 1000 exclusive stores for drunkards and internal staff, and 30000 core terminals will be built; 3) Product development, promotion and brand promotion focus on the fragrant tulip and build it into an industry benchmark. Spring sugar launched 54 degrees of unique fragrant tulip.
Shanghai Milkground Food Tech Co.Ltd(600882) : 1) actively promote family table series products, the normal temperature cheese stick will develop healthily, and the proportion of liquid milk business will gradually decline. Cheese market accounts for the first. 2) E-commerce and other new retail are important channels for the company. At present, there are 5363 distributors with channels covering Shanghai Pudong Development Bank Co.Ltd(600000) terminals, covering 96% of prefecture level cities and 85% of county-level cities in China. 3) Mengniu will inject the cheese business into the company and conduct multi-dimensional business cooperation within 2 years. 4) It is planned to arrange Chinese milk sources to cope with rising costs. 5) In the future, the cost will be put more accurately, and the cost rate will gradually decline.
Bestore Co.Ltd(603719) : in 2022, the sales scale maintained double-digit growth, and the profit growth rate was higher than the sales growth rate, so as to improve the profitability of a single store, make high-end snacks and activate the organization. 1) The cost investment in 2022 will not be radical, so as to ensure better growth in 2022. 2) The offline target in 2022 is higher than that in 2021; Group buying business maintained growth; Focusing on community stores, the growth rate will be faster. 3) Pork preserved meat is planned to be 1 billion yuan, which will be distributed in meat products, bread, cakes, candy and nutritional nuts in the future. 4) South China focuses on key cities and business districts, and Nanjing, Jiangsu, East China, has high development quality and will be distributed in places with good profits.
Chongqing Fuling Zhacai Group Co.Ltd(002507) : in 2022, the work will focus on category and market expansion, complete the upgrading of pickled mustard, breakthrough and expansion of radish, and extend the development of leisure snacks and sauces.
1) add 25000 tons of pickle production capacity, with a total production capacity of about 230000 tons. 2) The company launched a trial sale of 200 million packages of light salt pickled mustard and placed more than 100 million packages at the press conference. 3) The sales expenses are planned to be reduced this year. The county-level market has been covered as planned, and the overall growth of the county-level market last year was 20% – 30%. Set up the second sales department for catering channels and develop them with professional teams. 4) This year, the acquisition of qingcaitou was completed, and the overall price is about 800 yuan / ton. The new acquisition is generally used in May of that year. 5) At present, the transmission of terminal prices has been completed.
Yihai Kerry Arawana Holdings Co.Ltd(300999) : 1) the raw materials of rice noodles have completed 80% of the annual procurement volume in 2022. The company is cautious about the procurement of raw materials. 2) The epidemic has an impact on the sales of medium and high-end edible oil. The sales of blended oil has declined, the market share has increased, and the new variety of rice oil has grown rapidly; The epidemic has little impact on rice noodles. 3) The goal of central kitchen is to build 100, which has the scale advantage of comprehensive processing base. 4) Condiment is the key business. At present, the volume is small, the goal is to ensure the rapid growth of the volume, and the requirement for profit margin is not high. 5) E-commerce has established an e-commerce business department with the fastest development, and the to C end accounts for about 15%. The company continues to promote the online o2o store and chain, aiming to achieve the same share of online business as offline business.
Foshan Haitian Flavouring And Food Company Ltd(603288) : the company’s revenue and profit target in 2022 is + 12% year-on-year. At present, the country, industry and company are stable and good, the fundamentals remain unchanged, and the Growth Logic of the company remains unchanged. In 2022, the company will accelerate the transformation of market, technology, intelligence and product innovation. 1) Vinegar, cooking wine and compound seasoning are expected to become major categories. The volume of compound condiment is small and is still in the cultivation stage. 2) At present, the price of raw materials is still high, there is no lock price, and there is no consideration of raising the price again. 3) The price increase was basically completed.
China Resources beer: from January to February, the sales volume and secondary high-end increased well, and the growth rate of high-end wine is fast. After mid April, the beer is expected to usher in the peak season. The cost rise was transferred through price rise, and the annual profit maintained double-digit growth. 1) Above the second highest level, maintain the goal of reaching 4 million kiloliters by 2025, of which Heineken accounts for 15% – 20%. This year’s secondary high-end growth is higher than last year, and the sales growth rate of 20-25% is the bottom line. 2) the non beer industry has achieved the mutual empowerment of beer and baijiu. The 2-3 Baijiu enterprises have achieved the value explosion in three years, forming beer and non beer listed companies. 3) to achieve the unification of the three meetings of the 100 Chinese, 1000 Chinese and 3000 Chinese, to build the sales and channel models of snow beer, super high-end liquor, high-end Baijiu and thousand yuan beer.
2022q1 performance Outlook:
Baijiu sector: Kweichow Moutai Co.Ltd(600519) : 15%-20%, profit 20%; Wuliangye Yibin Co.Ltd(000858) : revenue 10% – 15%, profit about 15% Luzhou Laojiao Co.Ltd(000568) : revenue 20% – 25%, profit 25% – 30% Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) : revenue 20% – 25%, profit 25% – 30% Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) : more than 30% of revenue and more than 50% of profit Shede Spirits Co.Ltd(600702) : about 80% of revenue and 52% – 85% of profit Jiugui Liquor Co.Ltd(000799) : more than 80% of revenue and more than 90% of profit Anhui Gujing Distillery Company Limited(000596) : revenue 25% – 30%, profit 25% – 30% Anhui Kouzi Distillery Co.Ltd(603589) : income 20% – 25%, profit 20% – 25% Anhui Yingjia Distillery Co.Ltd(603198) : 40% – 45% of revenue and more than 50% of profit Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) : revenue 25% – 30%, profit 25% – 30% Jinhui Liquor Co.Ltd(603919) : revenue 20% – 25%, profit 20% – 25%.
Popular products: Zhe Jiang Li Zi Yuan Food Co.Ltd(605337) : revenue 15% – 20%, profit 0% – 5% Yanker Shop Food Co.Ltd(002847) : revenue (5)% – 0%, profit 0% – 10% Chacha Food Company Limited(002557) : revenue 0% – 5%, profit 5% – 10%.
Investment view
Baijiu sector: at the end of 3, we will give a forecast for the first quarter. At present, the market is affected by the epidemic, and the mood is cautious. It expresses concern about the sustainability of the two quarter. But from the past quarter, fundamentals are the important underpinning factors. Once the epidemic is improved, the subsequent valuation is only a matter of time. We hope the subsequent Baijiu sector will rebound.
Popular products: this week Bestore Co.Ltd(603719) , Shanghai Milkground Food Tech Co.Ltd(600882) , China Resources beer, Yihai Kerry Arawana Holdings Co.Ltd(300999) and Foshan Haitian Flavouring And Food Company Ltd(603288) released their annual reports for 2021, and the overall trend is good. At present, the popular products sector is in the verification period of the annual report and will welcome the verification of the quarterly report. For Volkswagen products, we also give a forecast of the performance in the first quarter. At present, under the background of rising raw materials and weak demand, the market is worried about the performance of overvalued stocks. We still suggest to actively pay attention to enterprises with undervalued and declining cost side, continue to pay attention to the transmission progress of price increase of beer and condiments, and actively pay attention to the structural opportunities of snack food.
On the whole, our view remains unchanged: at this stage Baijiu sector we recommend three high-end wine giants ( Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Luzhou Laojiao Co.Ltd(000568) ), three high-end three swordsmen ( Shede Spirits Co.Ltd(600702) , Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , Jiugui Liquor Co.Ltd(000799) ), real estate wine, four gentlemen ( Anhui Kouzi Distillery Co.Ltd(603589) , Anhui Yingjia Distillery Co.Ltd(603198) , Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) and Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) ). We recommend Juewei Food Co.Ltd(603517) , Chongqing Fuling Zhacai Group Co.Ltd(002507) , Chacha Food Company Limited(002557) , Inner Mongolia Yili Industrial Group Co.Ltd(600887) , etc. in the popular products sector, and continue to pay attention to the structural opportunities in the food sector. Give the food and beverage industry an “overweight” rating.
Risk tips
Risk of epidemic fluctuation; Macroeconomic fluctuation risk; Recommend the risk that the company’s performance is less than expected; Industry competition risk; Food safety risks; Risk of changes in industrial policies; Consumption tax or production risk; Raw material price fluctuation risk.
