Market review last week:
From April 11 to April 15, 2022, the food and beverage sector (Shenwan) rose by 4.4%, the Shanghai Composite Index fell by 1.25%, the Shenzhen Component Index fell by 2.6%, and the Shanghai and Shenzhen 300 fell by 0.99%. The food and beverage sector outperformed the Shanghai Composite Index by 5.64 percentage points, ranking second among the weekly increases and decreases of Shenwan’s 31 primary sub industries.
Core view: good mood, consumption recovery on the way
Baijiu: the mood is good, and the recovery is on the way. The annual report disclosure season or boost confidence in the market, most liquor enterprises in 2021 achieved relatively bright results, the first quarter of 2022 has laid a solid foundation for the whole year growth. In the current situation of rebound, some regional consumer scenarios are missing or causing demand decline, and distributors’ confidence is frustrated. However, the two quarter Baijiu is selling low season, and the short-term epidemic situation is not changed. It is a highly selective and high-end Baijiu sector with risk resistance and supply and demand. Maotai had a bright growth rate in the first quarter, strong determination in Wuliangye Yibin Co.Ltd(000858) reform, volume control and price support, and the valuation was cost-effective. The highest growth rate of the second high Baijiu sector is affected by the epidemic spread to small, the advantage market, large single product volume potential strong strong growth wine enterprises. During the 2020 epidemic, the second high-end Baijiu was more severely frustrated in Q1, and Q2-Q3 realized consumption recovery. In terms of sub regions, the epidemic situation in Shandong is slowing down, and the epidemic situation in East China, South China, Jiangsu and Anhui may have a partial impact on sales Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) 2022 in the first quarter, it is estimated that the total operating revenue / net profit attributable to the parent company will be about 10.5 billion yuan / 3.7 billion yuan respectively, with a year-on-year increase of 43% / 70% respectively. The proportion of Bofen control volume and blue and white structure continues to increase. The company has sufficient growth, and it is expected that the short-term epidemic will be less affected.
Beer: the epidemic has impacted the short-term sales of beer. With the decline of valuation, the medium and long-term layout opportunities are highlighted. We look forward to the inflection point of the epidemic. Under the influence of the epidemic, Shanghai and other places have taken strict sealing and control measures, and the beer drinking channels have been seriously damaged. At the same time, the non drinking channels have also been affected by policies such as home isolation in many places, the offline passenger flow has decreased, and the mobile sales have declined. At present, Tsingtao Brewery Company Limited(600600) mainly distributes in Shandong market, and the operating revenue of Shandong market will account for 49.77% in 2021. In March, Shandong market was seriously affected by the epidemic, and Tsingtao Brewery Company Limited(600600) sales fell significantly. China Resources beer market is relatively scattered. On the whole, the impact of Tsingtao Brewery Company Limited(600600) is greater than that of China Resources beer Chongqing Brewery Co.Ltd(600132) . Beer manufacturers began to prepare goods in mid and late April. In the peak season from May to August, the overall valuation of the beer sector has fallen, and the opportunities for medium and long-term layout have become prominent. They look forward to the inflection point of the epidemic and the demand rebound.
Condiment: the performance in the second quarter is expected to improve marginally, and the performance rebound after the epidemic is highly uncertain. At the beginning of the second quarter, the revenue and profit of the condiment industry are under pressure, but the impact will gradually weaken with the improvement of the epidemic situation; The price increase and channel destocking in the second half of 2021 have accumulated potential for the performance rebound; In Q2 of 2021, the base of revenue and profit of condiment industry is low; Overall, the performance of condiment industry in the second quarter is expected to improve marginally, but the performance differentiation may be more obvious. When the current round of epidemic situation improves, the downstream demand for condiments will recover and the transmission of price increases will be more certain. When the inflection point of single condiment leading demand is approaching, the performance elasticity is strong; Companies with differentiated product positioning and better cost control in the compound condiment industry have more advantages. Related targets: Foshan Haitian Flavouring And Food Company Ltd(603288) , Sichuan Teway Food Group Co.Ltd(603317) .
Investment advice
Plate allocation: Baijiu dairy products beer snack food condiments; Baijiu: related targets: Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Luzhou Laojiao Co.Ltd(000568) and sub high end liquor enterprises, with great potential for development of Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , Anhui Gujing Distillery Company Limited(000596) , Jiugui Liquor Co.Ltd(000799) ; Beer: related target: Tsingtao Brewery Company Limited(600600) , Chongqing Brewery Co.Ltd(600132) , with high growth expectation in future performance; Dairy products: relevant subject matter: Inner Mongolia Yili Industrial Group Co.Ltd(600887) , which makes concerted efforts in production capacity, channels and products.
Risk warning: risk of tightening industrial policies; Risk of epidemic spread in China; Food safety issues.
