Market performance
Last week, the food and beverage sector index fell by 3.47% as a whole, ranking 25th in the Shenwan sub industry, 1.33% behind the Shanghai and Shenzhen 300 index and 2.28% behind the Shanghai Composite Index. Snack (0.61%) and meat products (2.72%) rose in sub sectors. Beer (-7.01%), health food (-4.81%), dairy (-4.35%), baked food (-4.29%), Baijiu (-3.74%), soft drink (-2.65%), flavoring fermented products (-1.74%) and other alcoholic drinks (-1.56%) all showed a downward trend.
Investment recommendation
Popular products: this week we focus on the cheese industry in dairy products. China’s cheese consumption is still in its infancy. If the proportion of liquid milk consumption is 30%, the cheese consumption will have more than six times the growth space. Driven by supply and demand potential and channel thrust, the cheese stick market has grown rapidly. The short-term competition intensifies and the industry enters a reshuffle period. Quality differentiation has become an opportunity to break the situation. Leading enterprises have accelerated the development of low-line market and normal temperature terminal. Combing the development of cheese in Japan and South Korea, we believe that cheese snacks will still be the most important track in China’s cheese industry, and both processed cheese and natural cheese have the potential to produce large retail items. In terms of catering, the combination of cheese and Chinese cuisine needs to be explored. Family meals or the second growth opportunity of Chinese enterprises. Individual stocks continue to recommend Inner Mongolia Yili Industrial Group Co.Ltd(600887) , Zhongyin Babi Food Co.Ltd(605338) , Toly Bread Co.Ltd(603866) .
Baijiu: affected by the disturbance of the epidemic, macroeconomic pressure, and overseas geopolitical conflicts, the valuation level of Baijiu sector continued downward. We believe that under the short-term multiple factors disturbance, Baijiu consumption scenario is under pressure, but considering that the liquor companies in the off-season are mainly targeted at price control, steady volume and channel carding, the short term impact of the performance is limited, and the epidemic situation before the Dragon Boat Festival should be paid attention to. The supply and demand pattern of high-end Baijiu is stable and the consumption rigidity is strong. In addition, the current round of epidemic mostly occurs in first tier cities, the impact of local famous wine epidemic is relatively small, and the main line of consumption upgrading still exists. It is expected to release profit elasticity after the economy stabilizes in the second half of the year.
Key industry data
Baijiu: this week Moutai wine wholesale price declined compared with last week, this week’s price is 2870 yuan. In terms of loose bottles, the price this week decreased compared with last week, and the rated price this week was 2620 yuan The Wuliangye Yibin Co.Ltd(000858) lot price was stable at 965 yuan / bottle, and the Guojiao 1573 lot price was stable at 920 yuan / bottle. Food: on March 25, the price of wheat was 321278 yuan / ton, the price of corn was 282883 yuan / ton, and the price of soybean was 550474 yuan / ton. On March 25, the price of white granulated sugar was 5.80 yuan / kg. On March 18, the prices of piglets, pork and hairy pigs were 14.40 yuan / kg, 18.12 yuan / kg and 15.60 yuan / kg respectively. On March 16, the price of raw and fresh milk was 4.19 yuan / kg. On March 18, the retail price of milk powder remained basically unchanged.
Industry highlights
With the progress of material society and the enhancement of public health awareness in modern society, people pay more and more attention to the negative impact of sugar on the body. Therefore, the sugar free beverage market has grown rapidly in recent years. According to the 2021 China sugar free beverage market trend insight report released by the Key Laboratory of big data mining and knowledge management of the Chinese Academy of Sciences, the scale of sugar free beverage market will reach 11.78 billion yuan in 2020, a seven fold increase over 2014 and 22.74 billion yuan in 2025. Among them, the market scale of sugar free carbonated drinks (including bubble water) reached 6.69 billion yuan in 2020, accounting for half of the country. In terms of brand, 82.1% of consumers tend to choose Yuanqi forest. In terms of sugar substitutes, natural sweeteners have become the preferred choice for more “sugar free” products, and the market share has increased from 8.16% in 2010 to 29.41% in 2020. Due to its natural safety and zero calorie properties, erythritol has shown an obvious trend to replace aspartame and other artificial sweeteners, becoming the first choice for the “Zero sugar” target of healthy food, and there is still much room for improvement in consumption in the future. In addition, due to consumers’ pursuit of health, reducing or eliminating the use of preservatives will become the key point of competition in the sugar free beverage market in the future.
Risk tips
The risk of long-term epidemic prevention and control in China; Risks of major food safety incidents; Major agricultural epidemic risk.
