Key investment points:
Special topic: Maotai’s path of increasing the proportion of direct sales + upgrading of product structure to promote performance growth has been very clear, and the reform has helped open the space for direct price increase. The market generally expects that the amount of base liquor available for Maotai liquor will increase in 2022, and the certainty of “volume rise” is high. And the expected changes in the price of the direct flight are more frequent. The game of funds aggravates the fluctuation of the Baijiu plate. In this issue, we will focus on the “price rise” of Maotai liquor. We believe that although the direct price increase will promote the accelerated growth of the company’s profits, the company’s decision-making level will still consider the sustainability of growth momentum. The meaningful acceleration is the accelerated growth of performance on the basis of good price order and rationalized benefit distribution mechanism. At present, the company has a firm pace of reform and actively resolve the core contradictions, which will help to consolidate the stability of Maotai’s profit model and open the space for direct price increase. In addition to the direct price increase, increasing the proportion of direct sales + product structure upgrading is not only a powerful tool to improve the ton price of Maotai liquor and enhance the profitability of the company, but also a way to optimize the benefit distribution mechanism. The final result is that a few consumers with high consumption ability pay higher prices for Maotai liquor, and the rich channel profits are partially recycled to the distillery, Ordinary consumers have less pressure to pay for Maotai. Since the new round of reform, the market-oriented transformation, the increase in the delivery volume of Direct stores, the listing of non-standard new products and the direct price increase of non-standard wine have accelerated the implementation, and the certainty of the continuous improvement of the company’s profitability has been enhanced. Therefore, there is no need to game the specific time point of Maotai’s direct price increase, and it is more important to clarify that the company’s basic kinetic energy is increasing.
Baijiu: before the Spring Festival, the funds are actively stocked, and the price of the channel and inventory are healthy, and recommended Mau / five / Lu / Fen. All liquor enterprises started the Spring Festival payment, and the channels were generally optimistic about the market prospect of the Spring Festival, with high enthusiasm for payment and goods preparation. Subsequently, they entered the dynamic sales inspection period in the peak season of the Spring Festival. Combined with feedback from the channel, the demand for high-end Baijiu Spring Festival gift banquet is rigid, and the price of high-end liquor companies has been raised one after another, and the inventory remains at a normal low level, and the first quarter results are expected to have solid guarantee. Baijiu China has been spreading in recent years. Whether it affects the consumption of Baijiu and other high-end liquor consumption scenarios needs to be tracked. Considering the improvement of China’s epidemic prevention and control ability, the speed of vaccination is accelerating, and the protective barrier is constantly strengthened. It is predicted that the new round of epidemic will have a great impact on liquor consumption. At present, the Baijiu is still active, and the main product structure of liquor enterprises is continuously optimized. Overall, the current Baijiu boom continues, channel price and inventory health, demand is still strong, optimistic about the Baijiu market. The recent market is increasing the game of Moutai’s direct increase in price. The fluctuation of Baijiu plate is increasing, and the expected acceleration of the pace of accelerated interest rate hike is falling. In the early stage of our strategic report, “offensive and defensive, and the second blooming”, we have put forward the determination of the high-end baijiu. We believe that the valuation will bring about good allocation opportunities, and suggest that the choice of sub high end Baijiu should consider the matching degree of growth, certainty and valuation. The first is Kweichow Moutai Co.Ltd(600519) with a deep moat and accelerated performance release by reform. It is suggested to dilute the game on the time point of Maotai’s direct price increase and pay attention to the long-term impact of reform on the company’s profitability. Other Baijiu recommended price rise landing, stable demand, management is expected to improve, valuation is expected to repair Wuliangye Yibin Co.Ltd(000858) ; Recommend equity incentive, enhance internal vitality, raise price and control goods, and perform well Luzhou Laojiao Co.Ltd(000568) ; It is recommended that Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) with continuous upgrading of product structure, stable market advantages of the base, rapid growth in South China and East China market and continuous improvement of brand potential. The capital confidence was affected by the news of chairman change in the early stage, and the cost performance improved after the valuation fell.
Popular products: dairy products, beer and other foods with good segmentation pattern are recommended during price increase transmission. Dairy products: the completion of tasks in 2021 is good, the growth rate of high-end products such as Yili Jindian and Mengniu terensu is high, and the upgrading of dairy consumption structure is obvious. After the epidemic, the demand for dairy products has increased, and the channel is confident in the dynamic sales of dairy products in the peak season of the Spring Festival. The dairy industry has entered a stage of stable development, and the slowing down of industry competition is conducive to the improvement of profitability of leading companies. In this cycle, the demands of leading dairy enterprises for profits have increased. Yili’s management requires the net interest rate to increase by more than 0.5 percentage points every year. Mengniu’s management also said that the target EBIT margin in 2022 will increase by more than 50 basis points year-on-year. At the same time, the products are high-end Diversification has laid the foundation for the optimization of competition pattern. On the cost side, the recent high price of raw milk has remained stable, the year-on-year increase has narrowed, and the output of overseas raw milk has decreased. It is expected that the price of raw milk will still increase by a small single digit year-on-year in 2022. The leading companies with stronger control over upstream raw milk resources have less cost pressure, and can indirectly raise prices to offset cost pressure by upgrading product structure and reducing promotion. Continue to recommend Inner Mongolia Yili Industrial Group Co.Ltd(600887) . Beer: the annual tasks of major beer brands will be completed normally in 2021. The upgrading of product structure driven by high-end products is still the main theme, and the sales volume of low-end products continues to shrink. On the cost side, the prices of glass and corrugated paper are down, the prices of aluminum have picked up, and the prices of barley continue to rise. In the short term, there is still some pressure on the cost side. In the early stage, the industrial price increase has been started. At present, the price increase is being actively transmitted, which is expected to effectively hedge the cost pressure. The high-end trend of the beer industry is obvious, the profit elasticity brought by the large volume of high-end products is large, the main players in the industry actively pursue efficiency improvement and high-quality growth, and the competition pattern has been optimized. The recent outbreak of local epidemic has a certain impact on the sales volume of ready to drink channels, but the direction of demand improvement in 2022 is clear, the high-end potential of the industry is strong, the transmission of price increase is relatively smooth, and the cost of packaging materials is expected to fall in 2022. It is highly uncertain to judge the performance improvement of head beer company, so Tsingtao Brewery Company Limited(600600) is recommended. Condiment: the industry is in the transmission stage after the price increase. As the terminal demand is still weak, the price increase of most condiment companies except the leading Haitian has not been fully transmitted to the terminal. In the peak season of the Spring Festival, most brands have certain promotional activities to help the terminal ship, and the impact of community group buying continues to weaken. Looking forward to 2022, inventory is gradually being digested, and the price increases continue to be transmitted. At present, the driving force of the cost continues to weaken. It is expected that the seasoning company’s profit elasticity will be larger after the follow-up catering demand is warmer. It is suggested that Foshan Haitian Flavouring And Food Company Ltd(603288) , Qianhe Condiment And Food Co.Ltd(603027) , Jiangsu Hengshun Vinegar-Industry Co.Ltd(600305) and Jonjee Hi-Tech Industrial And Commercial Holding Co.Ltd(600872) should be actively concerned. For other foods, it is suggested to focus on the leading segments Angel Yeast Co.Ltd(600298) , Chacha Food Company Limited(002557) , Chongqing Fuling Zhacai Group Co.Ltd(002507) with smooth price increase transmission, excellent competition pattern and strong demand.
Risk warning: epidemic control is not as expected; Industry competition intensifies; The downward pressure on the macro economy has increased; Food safety risks.
