Investment advice
This week’s topic: how to view the fundamental improvement of food synthesis and condiments after the epidemic? Compared with 2021, this round of epidemic is large-scale and lasts for a long time, but it is mainly concentrated in Shanghai at present, which is expected to have a great impact on companies with high market share and high catering share in East China. The improvement opportunities after the epidemic focus on the recovery of b-end demand and the optimization of raw material costs and sales expenses. It is suggested to focus on companies that are greatly affected by the epidemic and have excellent quality, stable fundamentals and clear growth logic.
Food synthesis: 1) Jue Wei: under the epidemic prevention policy, the transportation hub stores (accounting for 10%) are the most severely damaged. It is expected that after the epidemic is relaxed, on the one hand, the subsidy is expected to be reduced, on the other hand, the price of duck is expected to decline. After the superposition of the price increase effect, the revenue of a single store is expected to gradually repair to the 19 year level. 2) Li Gao: the sales area is mainly concentrated in East and South China. Considering the high base of Q1 itself and the impact of the epidemic, the revenue growth rate of Q1 is expected to be about 20%. Considering the release of production capacity, the annual growth rate is expected to be more than 30%. It is expected to be repaired after the subsequent epidemic is stable. 3) Anji: the b-end catering channel has a negative impact, but in some cities with serious epidemic, it has increased the demand of C-end. Overall, the proportion of b-end is relatively high, which has a negative impact. Considering that it is a low season after the year, most of the demand has been released in the peak season of the new year. The company also actively arranges online platforms, community group purchases, wechat orders and other channels to supplement the C-end consumption scenario. It is expected that the impact of the epidemic on the annual income is limited.
Condiments: 1) during the epidemic period, the impact of the leader is controllable. The leading distribution network of condiments has basically realized the nationwide layout. The sales proportion in East China is even (about 20%), and the channels on the C-end line in the area with serious epidemic are vigorously supplemented, which is expected to have a limited impact. 2) Raw material cost improvement. At present, the cost of raw materials is still at a high level. It is expected that there will be opportunities for improvement in the new production season of Q3. Among them, the raw materials of composite seasoning are mainly purchased in China, and the certainty of cost improvement is strong. 3) Sales rate optimization. In 2021, the terminal demand is weak, and the entry of associations intensifies the market competition. Therefore, most condiment companies strengthen the cost investment. It is expected that after the epidemic, the new price will be stable and the cost will return to rationality.
Baijiu: the mood of the sector has recovered during the week, and is expected to be driven by the expected performance and the impact of epidemic control. From the current epidemic situation control, the impact of Baijiu sales, we expect that 3~4 month Baijiu sales accounted for about 12%~13%, relatively slow season under the influence of controllable. If the impact of the epidemic slows down in early May, we believe that it will have a limited impact on the recovery of consumer sentiment and the preparation of goods through channels and terminals in the peak season of the Dragon Boat Festival. In terms of high-end liquor, Maotai began to collect the payment in April, and the delivery is expected to be carried out in succession, Wuliangye Yibin Co.Ltd(000858) still under strong control; In terms of secondary high-end, we continued our previous judgment. The impact of fundamentals in the province is small, and the impact of decentralization outside the province is controllable. The collection of Fen Liquor in the second quarter began one after another, and Bofen has a strong determination to control the volume. Overall, we believe that the current sector correction has been relatively sufficient, and it is suggested to pay attention to the recovery of sector elasticity under the layout after the epidemic. At present, we are still the first to promote the deterministic high-end, focusing on the elastic sub high-end and the real estate wine with strong demand.
Beer: the recent rise in sentiment in the beer sector is mainly due to: 1) the marginal relaxation of epidemic policy in Shanghai; 2) Shandong individual channels came out of pure health price increase news. According to recent channel feedback, the overall sales decline of Tsingtao beer in the first ten days of April has not narrowed compared with that in the whole month of March. However, considering the marginal improvement of the epidemic situation in Shandong, it is expected that the overall month on month improvement in April is expected. We believe that beer is the top sector in the main line of epidemic repair (the demand rebound in the peak season in May is stronger, the inventory is benign, the transmission of price increase is smooth, and the competition has not deteriorated). It is suggested to pay close attention to the progress of epidemic prevention and control in the peak season.
Risk warning: macroeconomic downside risk / continuous and repeated epidemic risk / regional market competition risk.
