Core view:
Macro: from January to February, the consumption data picked up comprehensively. The total consumption of social zero was significantly improved month on month: from January to February 2022, the total consumption of social zero was + 6.7% year on year, and the catering revenue was + 8.9% year on year, both month on month and year on year. Bottom improvement of consumer confidence: in January 2022, the consumer confidence index was 121.5, a slight increase of 1.7 compared with December 2021. CPI rose slightly year-on-year and month on month: affected by seasonal factors, rising costs and epidemic outbreaks, CPI rose by 0.6% month on month and 0.9% year-on-year in February 2022.
Baijiu: 22Q1 can start a good start. Many factors lead to Moutai’s short price adjustment. Combined with the Bureau of statistics and company announcements, the overall demand for Baijiu industry increased steadily from 1 to February. Although the spread of the epidemic has hit the terminal consumer market since March, the impact of the off-season fluctuations is relatively small in the first quarter. 22Q1 has a good start, with a focus on the 21Q4&22Q1 performance expected to exceed expectations. In addition, Maotai’s wholesale price correction was obvious in March. We believe that it is mainly due to the increase of supply side (new e-commerce platform) + the inhibition of investment demand by unpacking policy + the impact of the spread of the epidemic on terminal demand in March.
Beer: the price lock part hedges the cost pressure and pays attention to the improvement opportunities in the peak season. On the demand side, the 22q1 epidemic spread or suppressed the consumption of catering and night show, resulting in the pressure on the fundamentals in the first quarter. However, we believe that with the reduction of the impact scope of the current epidemic and the recovery of per capita income, consumer confidence is also increasing, and the demand is expected to be further repaired. Superimposed with the world cup to stimulate consumption, the demand side may usher in a systematic improvement in the peak season; On the cost side, the price increase of raw materials and packaging materials in February exceeded expectations, or eroded part of the price increase effect, but many Chinese beer enterprises have locked prices to hedge part of the cost pressure.
Catering supply chain: 22q1 industry continued to recover, and the cost pressure in February exceeded expectations. We expect that the seasoning channel is expected to achieve a high double-digit growth before the Spring Festival, but the growth rate of 22Q1 listed companies is relatively stable. In addition, the cost side pressure is higher than expected, and the soybean price has remained high since the beginning of the year, or diluting the price increase dividend at the end of 21. Looking forward to the future, we expect 22h2 industry to usher in a fundamental inflection point.
Dairy products: supply and demand remained tight and loose, the raw milk cycle saw an inflection point, and the price increase in February further fell back to – 2%. The demand for white milk continues to be strong. The top two companies have reduced their promotion efforts, superimposed on the high decline of raw milk prices in February. It is expected that the milk price in 2022 is expected to continue the downward trend, and the gross sales difference of the industry is expected to further improve, releasing more performance flexibility.
Investment suggestion: Baijiu sector, from the angle of brand competitive value, suggests paying attention to Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Luzhou Laojiao Co.Ltd(000568) and Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) . For the popular products sector, it is suggested to pay attention to Inner Mongolia Yili Industrial Group Co.Ltd(600887) , which benefited from the decline of raw milk price and the expansion of gross sales difference, and Tsingtao Brewery Company Limited(600600) .
Risk warning: the impact scope of the epidemic exceeded expectations; The recovery of terminal demand is less than expected; The increase of cost price is higher than expected; Food safety issues.
