Baijiu is still optimistic, and the bottom is the public product.
From March 21 to March 25, the food and beverage index fell by 3.5%, ranking 25th in the primary sub industry, about 1.4pct lower than Shanghai and Shenzhen 300. Among the sub industries, meat products (2.7%), snacks (0.6%) and other foods (0.0%) are relatively leading. We see that two factors in the industry are changing beyond expectations. One is that the epidemic continues to affect demand; Second, the price rise of bulk raw materials brought cost pressure, which affected the share price of food and beverage sector. The Baijiu Baijiu Baijiu sector is affected by these two factors less. On the one hand, liquor demand is strong, especially high-end and sub high end liquor. When the epidemic is effectively controlled, Baijiu liquor usually has compensatory consumption. On the other hand, Baijiu gross profit rate is more related to price and product structure, and raw material price has little effect. Nationwide, most Baijiu enterprises returned money in the first quarter, and there were great differences between the dynamic sales areas, strong and less epidemic areas. Baijiu Baijiu is the first priority. We have a strong demand for toughness and low cost. We can still make optimistic prospects in the future. We will rank the top Baijiu and the top liquor enterprises. The industry has entered a period of intensive disclosure of annual reports, and Foshan Haitian Flavouring And Food Company Ltd(603288) released the annual report this week. In addition to the performance itself, we are more concerned about the judgment of listed companies on the annual consumption environment and countermeasures The annual growth target of Foshan Haitian Flavouring And Food Company Ltd(603288) revenue and profit of 12% is the target low in recent years, which reflects the pressure of the industry. In this context, the company proposes four changes to speed up market transformation, technology transformation, intelligent transformation and product innovation to meet the current challenges. We can summarize the ideas: on the one hand, reduce costs and increase efficiency at the production end, and flush out the cost pressure through efficiency improvement; On the other hand, more detailed market operations are carried out around consumers, including product innovation and transformation of new retail channels, so as to meet more consumer demand. This also means that the industry is gradually evolving to stock competition. At this time, the advantages of leading enterprises will be more obvious and enjoy more industry concentration and improved dividends. Other mass goods industries have similar logic. We still suggest that after the stock price adjustment, the leader of mass goods industry with high prosperity of bottom layout and reasonable valuation.
Recommended combination: Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , Foshan Haitian Flavouring And Food Company Ltd(603288) , Cabio Biotech (Wuhan) Co.Ltd(688089)
(1) Kweichow Moutai Co.Ltd(600519) forecasts 1-2 months of revenue and profit of 20% over expected growth, showing the Spring Festival high-end Baijiu sales trend, but also reflects the obvious effect of sales reform. Considering the supply of base liquor, it is expected that the planned revenue target rate will accelerate in 2022. The company has room to move calmly in terms of volume and price, and the logic of simultaneous rise of volume and price in the future is smooth. (2) Wuliangye Yibin Co.Ltd(000858) forecast 2021q4 to achieve revenue growth of 11% and net profit growth of about 11%. During the Spring Festival, the inventory of movable sales is good. After the management of the company is stable, it is expected to carry out the work of raising prices. It is estimated that the double-digit growth rate will be completed in 2022. (3) Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) it is estimated that the revenue and profit from January to February will increase by more than 35% and 50%, mainly due to the significant improvement of product structure, the growth momentum under the epidemic situation remains unchanged, and the annual performance is still possible to exceed expectations. (4) Foshan Haitian Flavouring And Food Company Ltd(603288) released the annual report. In 2021q4, the revenue benefited from the price increase to achieve accelerated growth, but the increase of cost price put pressure on the profit. In 2022, the planned revenue and profit will increase by 12%, which will be realized by reducing cost and increasing efficiency, accelerating market transformation and product innovation. It is suggested to lay out the bottom and hold it for a long time. (5) Cabio Biotech (Wuhan) Co.Ltd(688089) : equity incentive is implemented. After the implementation of the new national standard, the milk powder industry will start a new round of formula upgrading to accelerate the medium and high-end of the milk powder industry. The company is expected to fully benefit from the dividend of the new round of formula upgrading. At the same time, the second growth curve of SA is opened, and the cosmetics market is expected to relay.
Risk tips: economic downturn, food safety, fluctuations in raw material prices, lower than expected recovery in consumer demand, etc.
