Baijiu: suggest active layout: 1) optimize the layout of the epidemic impact on the performance of small / have the risk of high-end liquor; 2) The target with strong certainty of 22q2 performance growth, good marginal change and reasonable valuation is preferred. The specific elements include: strong business strength and anti risk ability & the main base market is less affected by the epidemic situation & the performance driving force comes from mature products rather than investment promotion & 22q2 still performs well compared with 22q1. Recommended targets: Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , Anhui Gujing Distillery Company Limited(000596) , Shede Spirits Co.Ltd(600702) , Anhui Yingjia Distillery Co.Ltd(603198) , etc.
Popular goods sector: the popular goods sector rebounded this week. We believe that it is mainly due to the release of information such as standard reduction at the macro policy level to hedge the negative impact of the epidemic on the economy. At the same time, the epidemic prevention and control in Shanghai and other places is close to the later stage, and there is an emotional response. We suggest that we should continue to pay attention to the layout opportunities of post epidemic rebound in the near future. At the current time, priority should be given to the required leading targets & optional high-quality leading with continuous improvement of profitability: Chongqing Fuling Zhacai Group Co.Ltd(002507) , Chongqing Brewery Co.Ltd(600132) , Chacha Food Company Limited(002557) , Zhongyin Babi Food Co.Ltd(605338) , Inner Mongolia Yili Industrial Group Co.Ltd(600887) .
April 11th ~4 16, 5 trading days, the Shanghai and Shenzhen 300 index fell 0.99%, the food and beverage sector rose 4.40%, the Baijiu sector rose more than the Shanghai and Shenzhen 300, or 3.68%. Specifically, the increase of Chongqing Brewery Co.Ltd(600132) (+ 13.77%) and Gansu Huangtai Wine-Marketing Industry Co.Ltd(000995) (+ 13.14%) in the beverage sector this week was relatively large, and the decrease of Jinhui Liquor Co.Ltd(603919) (- 0.07%) and Beijing Shunxin Agriculture Co.Ltd(000860) (- 0.52%) in the beverage sector was relatively large; The increase of Shandong Huifa Foodstuff Co.Ltd(603536) (+ 27.27%) and Suzhou Weizhixiang Food Co.Ltd(605089) (+ 22.57%) in the food sector this week was the top, while the increase of Jinzi Ham Co.Ltd(002515) (- 9.94%) and Zhejiang Huatong Meat Products Co.Ltd(002840) (- 10.17%) in the food sector were the bottom.
This week’s view
[Baijiu]: the wind is coming, and the Baijiu will rebound after epidemic.
Plate review: this week Baijiu sector fever rises, optimistic about the rebound after the epidemic opportunity April 11th ~4 16, 5 trading days, Shanghai and Shenzhen 300 index fell 0.99%, food and beverage sector rose 4.40%, Baijiu sector rose more than Shanghai and Shenzhen 300, or 3.68%. Specifically, this week, the beverage sector Chongqing Brewery Co.Ltd(600132) (+ 13.77%) and Gansu Huangtai Wine-Marketing Industry Co.Ltd(000995) (+ 13.14%) led the rise and fall. Specifically, Baijiu sector is Gansu Huangtai Wine-Marketing Industry Co.Ltd(000995) , +13.14% ( Luzhou Laojiao Co.Ltd(000568) ) (+10.51%), Anhui Yingjia Distillery Co.Ltd(603198) (+10.21%), Xinjiang Yilite Industry Co.Ltd(600197) (+10.21%) and Anhui Gujing Distillery Company Limited(000596) (+9.70%). We believe that:
1) medium and long term: we think that the Baijiu industry is still in the weak cycle of growth stage, and the high-end and sub high end liquor expansion is faster than expected. In the 21 year, the high-end and sub high-end liquor is about 19001000+. We expect that the average annual compound growth rate of Baijiu is 8% in the 202024 years, of which the average annual compound growth rate of high-end liquor and sub high-end liquor can reach 18%/17%.
2) in the short term: under the influence of the epidemic, the performance of 22q2 high-quality wine enterprises may still exceed expectations. Fundamentals: following the four major characteristics of the 22Q1 Baijiu industry, we think that the importance of decision-makers’ capabilities is more prominent in the current environment. At the same time, as the epidemic stage is an important stage of investment, the volume of investment oriented enterprises is facing some pressure. To sum up, we think: we should choose the target with strong business strength and anti risk ability & the main base markets are less affected by the epidemic situation & the performance driving force comes from mature single products rather than investment promotion & the performance growth rate of 22q2 is still excellent compared with 22q1 (the payment situation is excellent / the inventory is low / the approval price is stable and upward. So far, the payment progress of main liquor enterprises has been excellent). 2. Valuation surface: the current / Kweichow Moutai Co.Ltd(600519) value of Baijiu sector is about 64.5/68.7 score in the past 5 years, considering the certainty of Kweichow Moutai Co.Ltd(600519) performance as anchor of the sector valuation. Emotional side: market sentiment is the key factor to decide the turning point of sector style. We expect that when the epidemic is turning into inflection point, the market sentiment will improve or the Baijiu sector will go up as a whole, and the chance of structural certainty will be strong.
To sum up: in the context of the prosperity of the industry, the current annual report quarter & the phased implementation of wine enterprise reform measures will be the main catalyst at this stage. Considering that the early sector has experienced a decline of “basically facing the good trend, mainly disturbed by the emotional side” & the valuation of the sector has also been cost-effective, and the epidemic may usher in an inflection point, which is expected to boost market sentiment, Positive layout is recommended: 1) select high-end liquor with little impact on performance / anti risk ability; 2) The target with strong certainty of 22q2 performance growth, good marginal change and reasonable valuation is preferred. The specific elements include: strong business strength and anti risk ability & the main base market is less affected by the epidemic situation & the performance driving force comes from mature products rather than investment promotion & 22q2 still performs well compared with 22q1.
