Ping An View:
The first round of strict control period (January 22, 2020 to March 28, 2020): the risk resistance of high-end liquor represented by maowulu is relatively good. In 2020, the outbreak of the Spring Festival epidemic broke out. Strict control measures made the consumption scenario of Baijiu liquor Limited. The segregation of household resulted in a decrease in population flow, and the demand for terminal and the selling of the mobile terminal were greatly suppressed. From the perspective of fundamentals, 1) the demand for high-end liquor is in the forefront, which is least affected by the epidemic, and the inventory level is reasonable. The payment is basically completed before the Spring Festival, and the revenue / net profit of 20q1 increased by an average of 4.34% / 15.24% year-on-year; 2) The overall performance of secondary high-end liquor revenue is poor, with differentiated performance. The average revenue / net profit of 20q1 decreased by 17.90% / 5.22% year-on-year. Only Fenjiu and Jiugui Liquor Co.Ltd(000799) achieved positive growth in net profit; 3) Due to the lack of banquet and drinking scenes, the demand side of local wine shrank rapidly and the digestion of inventory was blocked. The average revenue / net profit of 20q1 decreased by 22.27% / 24.02% year-on-year; 4) The cash pressure of Dazhong liquor intensified, and the liquidation of small and medium-sized liquor enterprises accelerated. The average revenue / net profit of 20q1 decreased by 31.00% / 50.65% year-on-year (excluding Anhui Golden Seed Winery Co.Ltd(600199) ). In terms of stock price performance, the scale of social finance decreased in February, and the capital was tight. The high-end wine / sub high-end wine / real estate wine / popular wine sectors all fell, with the cumulative rise and fall of – 8.98% / – 17.90% / – 19.60% / – 13.36% (the cumulative decline of Shanghai and Shenzhen 300 was 10.21%).
Relaxation period (2020.3.282020.5.10): the rise of high-end liquor stock price continues to lead. From the perspective of fundamentals, 1) high-end liquor was strictly controlled, and the channel inventory was benign. The average revenue / net profit of 20q2 increased by 8.62% / 13.75% year-on-year; 2) The performance of sub high-end liquor was differentiated, and the average revenue / net profit of 20q2 decreased by 9.98% / 25.43% year-on-year. Among them, Fenjiu and shede recovered strongly, and Sichuan Swellfun Co.Ltd(600779) performance was under pressure; 3) The terminal promotion of real estate liquor was strengthened, the inventory decreased, and the performance was still under pressure. The average revenue / net profit of 20q2 decreased by 12.14% / 10.12% year-on-year; 4) Dazhong liquor benefited from the gradual liberalization of catering and distribution channels, and the average revenue / net profit in 20q2 increased by 14.83% / 43.74% year-on-year. From the perspective of stock price performance, the decline of main economic indicators narrowed significantly. Driven by the marginal recovery of demand and abundant liquidity, the high-end liquor / sub high-end liquor / real estate liquor / popular liquor sector recovered comprehensively, with the cumulative rise and fall of 20.79% / 16.48% / 15.03% / 3.38% (the cumulative rise of Shanghai and Shenzhen 300 was 7.88%).
The second round of strict control period (2020.5.112020.9.2): secondary high-end fundamentals and stock prices rebounded rapidly. With the continuous increase of cases in May, the situation of epidemic prevention and control was grim again, and the strict control period of “external defense input and internal defense rebound” was opened again. Since then, various high-quality liquor enterprises have successively carried out product price increases to realize the upgrading of product structure. From the perspective of fundamentals, 1) high end liquor continued the steady trend in the second quarter, with benign channel inventory, and the average revenue / net profit of 20q3 increased by 13.58% / 24.48% year-on-year; 2) The secondary high-end revenue and net profit increased significantly, with an average year-on-year increase of 29.69% / 133.19% in 20q3 revenue / net profit; 3) The decline of real estate liquor in the first half of the year was changed. The performance of the Mid Autumn Festival National Day peak season rebounded comprehensively. The average revenue / net profit of 20q3 increased by 12.57% / 14.56% year-on-year, and the channel inventory is still under pressure; 4) Dazhong liquor continued to recover, and the revenue / net profit of Dazhong liquor in 20q3 increased by 8.01% / 18.60% on average year-on-year (excluding Beijing Shunxin Agriculture Co.Ltd(000860) ). From the perspective of stock price performance, Baijiu enterprise has increased differentiation, and market share has gradually moved closer to the top companies. The recovery rate of high-end liquor / secondary high-end liquor / real estate wine / popular wine sector has been accelerated, and the cumulative increase in the interval is 60.40%/91.98%/47.83%/39.99% (CSI 300 has risen 22.27%).
Recurrent period (September 2, 2020 to December 31, 2020): secondary high-end and local liquor continued to strengthen. After repeated upgrades, the price of Baijiu Baijiu rose and stabilized. The price of Moutai’s bulk bottles (53 degrees) dropped to 2680 yuan, and then stabilized at around 2830 yuan. The price of liquor prices increased in the national cellar, the Yanghe River, Sichuan Swellfun Co.Ltd(600779) and Beijing Shunxin Agriculture Co.Ltd(000860) . From a fundamental point of view, 1) high-end liquor sales are good. Since September, gift giving and business demand have recovered steadily, inventory is at a low level, 20q4 revenue / net profit has increased by 14.48% / 23.76% on average year-on-year, and the revenue growth rate is the highest in the whole year; 2) The average growth rate of high-end liquor is 24% times and net profit 24% times higher than that of 14% times qfen, with a year-on-year increase of 54% and 7% times 3) Real estate liquor benefited from the recovery of catering banquets, the acceleration of dynamic sales and the benign inventory. The average revenue / net profit of 20q4 increased by 9.71% / 18.02% year-on-year; 4) Dazhong liquor was repeatedly impacted by the epidemic and its performance was differentiated. The average revenue / net profit of 20q4 was + 10.49% / – 66.95% year-on-year. From the perspective of stock price performance, it benefited from the Baijiu market price increase and volume, high price stability, accelerated performance recovery, Baijiu sector continued to strengthen, high-end liquor / high-end liquor / estate liquor / popular wine sector recovery accelerated, the cumulative decline was 29.75%/77.98%/31.54%/93.26% (CSI 300 rose 7.58%).
The core conclusion: after the overall analysis and analysis of the Baijiu sector in 2020, we concluded the following conclusions: 1) from the sales volume, the Baijiu liquor sales volume declined in 2020. 2) the trend of Baijiu sector is greatly influenced by the gold face, and when the interest rate is down, Baijiu stock price rebound is higher than that of Shanghai and Shenzhen 300 index. 3) the Baijiu’s 2022 callbacks and duration were all larger than those of 2020, mainly on the basis of the epidemic and overlooked worries about the economic and consumption downturn. 4) The safety cushion of high-end liquor dealers’ inventory has a relatively small impact on the performance. 5) During the stock price rebound, Jiugui Liquor Co.Ltd(000799) rebounded the fastest in the year. 6) The epidemic has a great impact on local wine, and the performance is affected by the fluctuation of consumption scenarios.
Investment suggestion: in the short term, the epidemic situation has repeatedly impacted on the consumption scene, but in the long run, the inventory safety of high-end liquor dealers has been padded up, which has relatively little impact on the performance, has sustained growth and performance certainty, and the industry will still focus on high-quality head brands in the future. At present, the valuation of high-end liquor is cost-effective, the industry fundamentals are stable and positive, and it is expected to rebound after the epidemic fades. We suggest paying attention to the national high-quality leading liquor enterprises represented by Kweichow Moutai Co.Ltd(600519) , recommending Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , and Luzhou Laojiao Co.Ltd(000568) .
Risk tips: 1) policy risk. Baijiu industry demand and tax rate are greatly influenced by policies, such as changes in relevant policies, which may have a greater impact on the company’s revenues and profits. 2) Baijiu industry downturn risk. Baijiu industry and the price trend is highly correlated, if Baijiu prices decline, may lead to a substantial slowdown in corporate revenue growth. 3) Industry competition intensifies. There is a problem of intensified competition in the Baijiu industry. We should guard against the adverse effects of price war and fleeing goods brought about by the deterioration of competition. 4) The risk of epidemic aggravation. The Baijiu consumption scenario is reduced when the epidemic intensifies, which may impact the Baijiu industry boom.
