Take history as a mirror: in 2020, the popular goods sector rebounded rapidly after the epidemic, and the valuation continued to improve
In 2020, the trend of most Volkswagen sub sectors was stronger than that of Shanghai and Shenzhen 300. Among them, quick-frozen products and condiments benefited from the epidemic, leading the rise of Volkswagen sub sectors, with an increase of 151% and 121% respectively in 20 years. Specifically:
1) 20q1: the sectors of home hoarding consumption scene benefited, while the relevant sectors of catering industry suffered. In January 2020, the epidemic broke out, the country achieved strict control, and the consumption scene of home office benefited the sectors of quick freezing, condiments and snacks; They increased by 32.5%, 17.2% and 19.2% respectively in 20q1; At the same time, due to the short-term suspension of catering enterprises, the drinking scene around the Spring Festival disappeared, beer and other related sectors were damaged, and 20q1 fell 9.6%.
2) 20q2: the sector continues to recover, and the catering consumption demand begins to make up. In April, the epidemic situation was effectively controlled, social activities began to recover, and catering consumption demand was replenished. For example, halogen products stores resumed operation, with an increase of 35.7% in 20q2; The beer sector increased by 46.2% with the arrival of the peak consumption season and the recovery of catering; The catering at the b-end of the condiment sector began to recover, and the C-end entered the inventory replenishment stage after inventory digestion, with an increase of 24.8% in the sector; Other sectors also have compensatory consumption, all of which have achieved a large increase.
Q3) catalytic sector: continued upward demand, and Q3) continued to repair. Although the epidemic of 20q3 broke out in scattered places, it had a relatively small impact on social activities. All sectors of popular products continued to rise, but the increase was less than that of 20q2 (except the quick-frozen sector). Among them, quick-frozen 20q3 increased by 46.6%, mainly due to the continuous recovery of catering scene and the acceleration of epidemic situation, which cultivated the consumption habit of quick-frozen food at the C-end.
4) 20q4: the valuation fell, and the required consumption performed well. After the epidemic became normalized, social activities returned to normal, the valuation of the sector increased, the dividend period subsided, and the popular goods sector began to callback. During this period, the mandatory consumer goods sector, such as condiments and dairy products, performed strongly, with an increase of 19.6% and 14.7% respectively in 20q4; Secondly, the upgrading of product structure and high-end process of the beer sector were further deepened, with an increase of 20.7%.
Foresee the future: in 2022, the mass products sector needs to observe the opportunities brought by subsequent multi factor improvement
The number of provinces affected by this round of epidemic has increased, the scope has expanded, the number of people has increased, and the impact time is also slightly different; Therefore, after comparing with 20 years, we predict the trend of subsequent sub sectors. Specifically:
1) beer sector: compared with 20 years: ① epidemic impact: the epidemic is close to the peak beer season, showing a multi-point distribution trend, and the affected areas and number of people are increasing; ② Industry background: in the past 22 years, the upgrading of high-end beer industry has accelerated, but the cost side is significantly under pressure compared with that in the past 20 years, and the industrial price rise tide is coming.
At present, the two major observation points of the beer industry are [inflection point time of the epidemic in April] and [number of provinces continuously affected by the epidemic after April]. If the epidemic situation is well controlled in April and gradually relaxed nationwide, and the consumption peak season is normal in May, it is expected that the impact of the epidemic on the annual sales of beer enterprises is limited. It is suggested to pay attention to the opportunities for post epidemic sector repair.
2) condiment sector: compared with 20 years: ① cost: the cost in 22 years is higher than expected; ② Price increase: 21q4 industrial price increase, and price transmission has been completed in early 22; ③ Demand: the explosive demand of C-end in 20 years can make up part of the loss of b-end; 22 years’ C-end is not enough to make up for the loss of catering end; ④ Competition: in the past 22 years, the industry competition has intensified, the leading enterprises have expanded their production aggressively, the competition at the C-end has intensified, and the big b-end has risen.
The observation period from May to June is an important inflection point. 21q2-q3 is affected by the impact of community group purchase + high channel inventory + sluggish demand and other factors, and the base number of report end is low. In 2022, the cost continued to rise + the channel inventory level was high, the superimposed demand improved slowly, the cost of each enterprise may exceed the expectation, and there is still pressure in 22h1. Q3-q4 is the peak season for seasoning demand. If the epidemic is controlled from May to June, the sector is expected to improve significantly from 22q3.
3) dairy products sector: compared with 20 years: ① epidemic impact: the challenge of supply chain interruption in 22 years is great. Firstly, the logistics and transportation of raw materials and finished products are not smooth, and the terminal passenger flow is greatly reduced, which tests the flexibility of dairy enterprises Wuxi Online Offline Communication Information Technology Co.Ltd(300959) all channels; ② Industry background: the price of raw milk fluctuates at a high level, the demand for liquid milk is strong, and the high-end demand is resilient. We believe that in the liquid milk business, the impact of the epidemic on national dairy enterprises is relatively limited, and the impact on regional dairy enterprises depends on the main business area; In the milk powder cheese business, the industry concentration is expected to further improve.
4) leisure and snack sector: compared with 20 years: ① cost: the cost of 21 years is rising, and the enterprise cost of 22 years is facing higher cost pressure; ② Price: 21q4 industry generally raises prices, which has been conducted at present; ③ Demand and supply: in the past 22 years, dealers have been cautious in preparing goods, and the channel inventory is low; The sealing control has affected the channel demand of supermarkets.
At present, the inventory level of the leisure and snack sector is low, and the 21q2 industry is in a low base. If the subsequent epidemic situation can be alleviated, the demand is expected to make up. It is suggested to pay attention to the layout opportunities of high-quality leaders in the leisure and snack sector in the near future.
5) halogen products: compared with 20 years: ① outbreak time: this round of epidemic broke out after the Spring Festival, which is expected to have a great impact on the sales in the traditional peak season of 22q2; ② Outbreak area: the epidemic has a wider impact in 22 years, and the recovery time of offline business is expected to be prolonged; ③ Company strategy: the head company’s expansion strategy has changed from radical to conservative, from high potential energy channels to street community stores, and from the first and second tier to sinking the market.
Therefore, it is suggested to pay attention to the inflection point of the epidemic and the development of the sinking market. At present, the bittern chain sector is at a historical low, the short-term epidemic disturbance does not change the leading Juewei Food Co.Ltd(603517) long-term growth logic, and pay attention to the layout opportunities.
6) quick freezing sector: compared with 20 years: ① epidemic impact: the central area of the epidemic was frustrated at end B and increased at end C, and the penetration rate of prefabricated vegetables increased significantly; ② Industry background: the cost of raw materials continued to be under pressure, and major enterprises completed price increases at the end of 21.
On the one hand, the follow-up opportunities come from the restoration of b-end catering channels brought about by the deregulation of the epidemic, on the other hand, prefabricated dishes benefit from the deepening of consumer education and the improvement of penetration during the epidemic. It is suggested to pay attention to the sector repair opportunities brought by the release of performance elasticity under the subsequent [establishment of B + C end demand trend] and [establishment of cost inflection point].
7) baking sector: compared with 20 years: ① cost: palm oil temperature and rise in 20 years, but palm oil price has continued to rise since 21 years, and it is still high in 22 years, with great cost pressure; ② Price: in the second half of the year, the industry began to raise prices. At present, the transmission is basically completed, and the possibility of further price increase will not be ruled out in the future; ③ Demand and supply: in the past 22 years, the demand has been seriously damaged, but some short-term guarantee baking products have the nature of staple food, and the demand for stock has soared.
At present, the two major observation points of baking sector are [cost inflection point] and [post epidemic terminal demand index]. 20 years after the epidemic, the industry has entered a bonus period for new stores. We believe that if the terminal demand improves after the current epidemic, the industry will resume the pace of opening stores; At the same time, with the price increase or cost decline of the industry, the sector will have new layout opportunities.
Investment advice
Previously, the market believed that the superposition of cost inflection points and price increases in 2022 + improved demand, and the simultaneous rise of volume and price brought sector opportunities, but at present, we believe that this logic cannot be fully realized due to changes in the external environment.
Current time point: 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) .
1) compared with the past 20 years, a major problem faced by the popular products sector is the greater pressure on the cost side. Due to the continuous rise of raw materials in the past 21 years and the impact of international geopolitical conflicts in the past 22 years, the cost of most raw materials and packaging materials of popular products is still at an all-time high. Therefore, priority should be given to [mandatory consumer products with relatively high performance certainty]. At the current time, we suggest to pay attention to [ Chongqing Fuling Zhacai Group Co.Ltd(002507) ], [ Zhongyin Babi Food Co.Ltd(605338) ], where the price increase is conducted smoothly and the cost has an inflection point.
2) at the same time, we also suggest paying attention to the leaders of optional consumer goods with the logic of improving profitability and reasonable valuation after the post epidemic demand is repaired: [ Chongqing Brewery Co.Ltd(600132) ], [ Chacha Food Company Limited(002557) ].
3) in addition, the value of defense allocation of leading dairy enterprises is prominent. It is expected to promote double-digit income growth through volume increase + category structure adjustment + product structure upgrading, and improve profit margin through cost rate optimization: [ Inner Mongolia Yili Industrial Group Co.Ltd(600887) ].
Looking forward to the follow-up: we need to observe the multi factor improvement opportunities of cost inflection point, demand repair and epidemic recovery.
In 22 years, with the improvement of many factors such as the gradual resolution of the epidemic, the recovery of consumer demand and the decline of cost pressure, the sub sector is expected to usher in marginal improvement. It is suggested to pay continuous attention to Fu Jian Anjoy Foods Co.Ltd(603345) , Juewei Food Co.Ltd(603517) , Ligao Foods Co.Ltd(300973) , etc.
