Key investment points
Continue to pay attention to the opportunities of hoarding goods and home consumption under the catalysis of the epidemic. We believe that since the beginning of the second quarter, home consumption has become the main axis under the influence of the epidemic. At present, many places in China have strengthened the control of people flow, advocated home office, and residents have spontaneously hoarded goods to strengthen material reserves. We believe that at the moment of consumption at home, prefabricated vegetables, pickled mustard tubers, frozen, dairy, high-end Baijiu, snack foods and other consumer goods are expected to maintain a good growth. With the support from the top down policy, the catering industry chain and related industries are expected to improve. The first main line of recommendation is that under the policy of dynamic clearing, the flow of people is controlled, home consumption becomes the main axis, the demand for goods storage is expected to continue to benefit, and the demand for products such as pickled mustard, dairy products, melon seeds, instant foods and composite seasonings remains high Chongqing Fuling Zhacai Group Co.Ltd(002507) a batch of suppliers’ shipments continued to rise, benefiting from the positive growth of epidemic sales in March and the marginal improvement in April; Normal temperature white milk has strong terminal demand due to its healthy consumption attribute, and Yili may further benefit from the easing of logistics in April; The shipment of quick-frozen rice noodles accelerated in March, the price war slowed down, and actively paid attention to the performance of Anji and Sanquan; Qiaqiaguokui rose sharply in March, and its inventory was at a historical low, which is expected to continue in April; Barbie has benefited from the surge in retail demand of government guaranteed supply + community group purchase + business super new. At the same time, the price of government guaranteed supply orders and community group purchase orders is excellent and the cost is low; Yihai East China’s terminal demand for convenient fast food and composite seasonings maintained high growth. The second main line of recommendation is that the inflection point of new cases in Shanghai is approaching. Under the vigorous control of the flow of people, the victory of the epidemic is in sight. Consumption is expected to recover in an all-round way. It is suggested to lay out beer, catering, stewed flavor, quick freezing, condiment and other sectors on the left. After the epidemic situation is repaired, on the one hand, beer can fill the gap of current drinking, on the other hand, the recovery of scenes such as night show will accelerate the process of high-end; The catering industry has been further cleared up. After the outbreak, the demand for foreign food has warmed up, and the profits are expected to be repaired Zhengzhou Qianweiyangchu Food Co.Ltd(001215) , legao mainly focus on catering and chain baking customers, and there is great flexibility for the recovery of end customers after the epidemic is repaired; It is expected to maintain a good momentum of opening shops and shops in the community after the epidemic situation is repaired, and it is expected to maintain a good momentum of opening shops in the community; The downstream catering of condiments accounts for the majority, and the repair of the epidemic situation will bring about the recovery of catering demand.
Baijiu week tracking: Kweichow Moutai Co.Ltd(600519) : according to today’s wine price data, the Flying Box / bottle is 28202625 yuan, the Moutai 1935 price is 1410, and the ring week is basically unchanged. The wholesale price of products above Feitian continues to decline, treasures have declined by 50 yuan to 4700 yuan, and the year of the tiger Zodiac has declined by 30 yuan to 3690 yuan. However, it is observed that Maotai has remained stable at 6270 yuan for 15 years, and the e-commerce supply of main new products is expected to increase. According to the channel tracking feedback, Maotai’s demand side is least affected by the epidemic, and the supply reform continues to make efforts. Under the dual pressure of the epidemic and the slowdown of economic growth this year, it is a rare core asset target that can accelerate growth, and still has strong growth potential in the next 2-3 years Wuliangye Yibin Co.Ltd(000858) : according to the feedback of channel research, the goods continued to be stopped in April, and most regions of the general five rating rose to about 980. In low-cost regions such as Henan and Sichuan, the rating rose by about 10 yuan, and there are still 970 + goods in Guangdong. At present, the dealer’s inventory is 1 month and the social inventory is 0.5-1 month. In terms of other core products, the low-grade Wuliangye Yibin Co.Ltd(000858) is basically consistent with the progress of the general five-year plan; 1618 affected by the price increase, the progress has been dragged down to a certain extent. At present, the rated price has rebounded to 975, and the upside down has been alleviated; Classic Wuliangye Yibin Co.Ltd(000858) is in the stage of repurchasing and digesting channel inventory, and it is expected that this year’s delivery will be less than that of last year. Previously, the price support plan of puwu was delayed due to the impact of the epidemic on demand. It is expected that after the epidemic in East China is alleviated, the wholesale price is expected to continue to rise, driving the valuation repair Luzhou Laojiao Co.Ltd(000568) : the price of 1573 high-grade national cellar is maintained at 920 yuan around the week, and the price of low-grade national cellar is also stable at 640 yuan. It is expected that the payment will start at the new cost in April, but the large-scale payment collection has not yet started.
Beer: the repeated epidemic situation put pressure on the total amount in March, and adhered to the medium and long-term ASP promotion logic. According to the data of the National Bureau of statistics, the output of beer industry in March 2022 was 2.849 million kiloliters, with a year-on-year increase of – 10.3% and – 6.1% compared with March 2019. From January to March 2022, the industrial output was 8.16 million kiloliters, with a year-on-year increase of – 1.5%, and an increase of – 1.7% compared with January to March 2019. When the total amount of the industry was flat from January to February and the same period in 2019, there was a significant decline in March, mainly due to the repeated and obvious epidemic in Shanghai, Shandong, Jilin and other places, which affected the sales volume of current drinking channels. In March 2022, the revenue of the catering industry increased by – 16.4% year-on-year and – 14.8% compared with the same period in 2019. From January to March 2022, the revenue of the catering industry increased by 0.5% year-on-year and – 1.6% compared with the same period in 2019. In the context of repeated severe outbreaks in East China, the sales volume of beer highland markets in East China and other regions has been significantly damaged, and the national control has been strengthened. It is expected that the total amount of the industry will be under pressure in the short term. It is suggested to actively pay attention to the structural upgrading and the implementation of price increase in 2022, and adhere to the medium and long-term logic of promoting the profit release of beer ASP.
Nongfu mountain spring: sales are stable and new products continue to be launched. Channel tracking shows that since the beginning of the new fiscal year, both old products and new products have continued to maintain a strong strength. In addition to the epidemic situation, the regional achievement in China is good. It is still necessary to observe the impact of the epidemic from April to May and the performance in the peak season. According to channel feedback, farmers continue to reap shares, while the performance of Yibao and Jingtian regions is relatively unbalanced, and the share improvement lags behind farmers. We believe that the main reason is that farmers take the lead in sales mode, set up amoeba unit centered on dealers, give dealers more autonomy, and the company has sufficient industry representatives and strong execution. At the same time, the water business SKU is perfect, the gross profit of the beverage business is sufficient, there are many new products and the survival rate is high, so it can provide higher value to the channel and be more resilient in an uncertain environment. New products continue to be launched and continue to show the advantages of farmers’ raw material system. 1) Pure new products: three flavors of steam tea, with tea as the core and catering to the explosive growth trend of bubble drinks, and the price system is consistent with the mainstream price band (5 yuan / bottle). 2) There are two new flavors of Oriental leaves and tea π, both of which are obviously innovative. The raw materials are high-quality and the taste test is outstanding (Xinhui orange peel, NFC green juice, Longjing new tea, etc.). 3) The taste of bubble water is innovative. We believe that nongnongshan spring has the broadest moat among listed beverage companies, the advantages of upstream raw materials continue to promote product fission and innovation, and the brand and sales model are also ahead of their peers. It is suggested to pay special attention to it.
Angel Yeast Co.Ltd(600298) : the short-term operation is under pressure, and the follow-up improvement is expected. The company achieved a revenue of 3.032 billion yuan in 2022q1, a year-on-year increase of 14.14%; The net profit attributable to the parent company was 313 million yuan, a year-on-year increase of – 29.30%; The net profit attributable to the parent company after non deduction was 265 million yuan, a year-on-year increase of – 36.09%. The profit in the first quarter decreased significantly, mainly due to the increase in the cost of molasses and main raw materials and the increase in expenses during the period. (1) Price increases affect short-term sales and actively respond to the situation in Russia and Ukraine. In 2022q1, the company achieved a main business income of 3.002 billion yuan, a year-on-year increase of 14.08%. In terms of products, in 2022q1, the revenue of yeast and deep-processing products reached 2.207 billion yuan, a year-on-year increase of 4.16%, mainly due to the certain impact on short-term sales after the price increase of Chinese products. The company has focused on major industrial customers, strengthened application technology services, and achieved more than 20% growth in microbial nutrition, plant nutrition and other fields.
The income from sugar making, packaging, dairy products and other main industries was RMB 363 million, 107 million, 16 million and 309 million respectively, with a year-on-year increase of 160.76%, 8.85%, 23.87% and 17.96% respectively. By region, in 2022q1, China and foreign countries achieved revenue of RMB 2.167 billion and 834 million respectively, with a year-on-year increase of 13.23% and 16.38% respectively. The company gave full play to the role of local employees of six overseas business units, deeply integrated into regional markets and actively responded to the tension between Russia and Ukraine. 2022q1 has a net increase of 175 to 20380 dealers. (2) The gross profit margin of raw materials is under pressure, and the increase of superimposed expense rate affects the profit. The gross profit margin of 2022q1 company decreased by 6.56 PCT to 26.68% year-on-year, mainly due to: first, the cost of molasses and main raw materials increased; Second, the proportion of sugar business income with low gross profit margin in the current period increased significantly. In 2022q1, the company’s sales, management, R & D and financial expense rates were + 0.50, + 0.23, + 0.06 and + 0.72 PCT respectively to 6.68%, 3.21%, 3.95% and 0.99% year-on-year. The increase of financial expense rate is mainly due to the increase of interest expense and exchange loss. Overall, the net profit margin of 2022q1 decreased by 6.46 PCT to 10.45% year-on-year. (3) Facing the pressure of the sharp rise in the cost of raw materials, the company timely adjusted its market strategy and adjusted the product price in a planned and step-by-step manner. The short-term price increase has a certain negative impact on the company’s product sales. With the gradual completion of digestion and transmission at the terminal, the marginal impact weakens. At the same time, the cost of molasses used in the first quarter was high, which had a great impact on the gross profit margin. Subsequently, with the gradual decline of molasses cost, the profit is expected to improve. It is suggested to continue to pay attention to the performance improvement.
Sanquan Food Co.Ltd(002216) : double optimization of product channel structure and continuous release of performance flexibility. The company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the revenue was 6.943 billion yuan, yoy + 0.25%; The net profit attributable to the parent company was 641 million yuan, yoy-16.55%; Deduct the non net profit of 551 million yuan, yoy-3.44%. 22q1 achieved revenue of 2.343 billion yuan, yoy + 0.49%; Net profit attributable to parent company was 261 million yuan, yoy + 48.36%; Deduct 240 million yuan of non net profit, yoy + 39.92%. (1) Revenue is in line with expectations, and new business continues to increase. The revenue of single Q4 company is 1.864 billion yuan, yoy + 8.24%; The net profit attributable to the parent company is 255 million yuan, yoy + 29.37%; Deduct 241 million yuan of non net profit, yoy + 39.02%. According to the split of the whole year, rice noodle food followed the contraction of supermarkets and channels and declined slightly. Quick frozen rice noodles, prepared food and refrigerated short-term food were – 3.2% / + 42.0% / + 40.1% year-on-year respectively. Among them, the traditional categories of Tangyuan dumplings and zongzi were – 8.1% year-on-year, and the pastry was + 10.4% year-on-year, which was mainly due to the company’s adjustment of product structure in supermarkets, cutting off low gross profit products and increasing high gross profit products. The company’s b-end business has developed well, accounting for 16.9% of revenue, with a year-on-year increase of 3.3pct. Direct channels accounted for 23.3% of the total revenue, with a year-on-year increase of -4.4pct. The proportion of direct channels continued to decline, significantly driving the improvement of profitability. (2) Product structure optimization + channel reform + price increase + cost decline jointly promoted the significant increase of non deduction net interest rate. The net interest rate of the company in 2021 was 9.22%, with a year-on-year increase of -1.75pct. In Q4 alone, the company’s net interest rate was 13.69%, a year-on-year increase of + 2.23pct; Deduct non net interest rate of 12.96%, year-on-year + 2.87pct. Among them, the gross profit margin is 30.02%, the sales expense rate is 10.32%, and the gross sales difference is 19.71%, with a year-on-year increase of + 0.74pct (the caliber is slightly different due to the change of accounting standards in 21 / 22). 22q1 net interest rate was 11.14%, year-on-year + 3.60pct; Deduct non net interest rate of 10.26%, year-on-year + 2.89pct. The gross profit margin was 31.03%, with a year-on-year increase of + 2.38pct; The sales expense ratio was 14.40%, with a year-on-year increase of -1.84pct. Considering that it is mainly caused by channel reform + product structure optimization, and the price of pork, the company’s main raw material, is down + Q4 price increase to alleviate the pressure of rising costs such as oil and rice noodles, the gross sales difference is significantly boosted. (3) Under the catalysis of the epidemic, Q2’s revenue performance is expected to increase by double. According to the channel research feedback, since the epidemic, the company has a strong demand for storing rice flour products, and the delivery side is stable as a whole. The growth rate of the revenue side still increased month on month in April, showing a bright performance. Under the dual optimization of channel + product structure (new categories such as air fryer, microwave oven instant rice and so on will be continuously arranged this year), the net interest rate is expected to maintain a double-digit level, the superimposed 21q2 net interest rate base is relatively low (7.79% net interest rate), and the performance end is expected to continue to release elasticity. The annual income is expected to reach the incentive target (about 10% growth), and the net interest rate is still expected to reach the level of 9% +.
Toly Bread Co.Ltd(603866) : the income is stable and the profit is under pressure due to the disturbance of multiple factors. The company released the first quarterly report of 2022: 22q1 achieved a revenue of 6.336 billion yuan, yoy + 6.24%; Net profit attributable to parent company: 763 million yuan, yoy-13.54%; RMB 1.67 billion, net profit of non yoy RMB 1.67 billion. 1) Income grew steadily, and East China may benefit from the outstanding catalytic performance of the epidemic. 22q1 bakery achieved a revenue of 1.449 billion yuan, yoy + 9.2% revenue performance in line with the previous expectations. From a subregional perspective, East China may benefit from the catalysis of the epidemic, with a rapid growth rate. East China + 33.6%, northwest + 19.2%, central China + 14.4%, South China + 11.1%, North China + 5.5%, southwest + 4.6%, northeast + 2.2%. Considering the different market development stages between East China and Northeast China, East China is still in the stage of rapid penetration of peaches and plums. After continuous layout in recent years and the launch of factories in Jiangsu last year, the growth is faster under the catalysis of the epidemic. The mature market in Northeast China is relatively stable. In terms of the number of dealers, by the end of Q1, the company had 903 dealers, a net increase of 8 dealers over the end of last year. Except for the net decrease of 3 in South China, the number of dealers in other regions remained flat or increased slightly. 2) The profit of raw materials + sealed freight for epidemic control still disturbs the profit. The net interest rate attributable to the parent company in 22q1 was 10.88%, with a year-on-year increase of -1.39pct; Deduct non net interest rate of 10.31%, year-on-year -0.80pct. In terms of spin off, the gross profit margin was 25.62%, with a year-on-year increase of -0.95pct, which was mainly affected by the rise of raw material cost and freight, including the negative effect of the rise of freight in the sealed area under the epidemic; In addition, the obstruction of product structure optimization under the epidemic also has an impact on the gross profit margin. The sales expense rate was 8.45%, with a year-on-year increase of -0.77pct, mainly due to the suspension of some expenses and activities promotion under the epidemic situation in Northeast and East China. The management fee rate was 2.22%, with a year-on-year increase of + 0.21pct; The R & D expense rate was 0.52%, a year-on-year increase of + 0.32pct, mainly considering the impact of salary adjustment of some personnel. The financial expense rate was 0.13%, year-on-year + 0.70pct, mainly because the company’s exchange income and financial management income in the same period last year were higher than that in the current period. 3) Expect Q2 price increase transmission to reduce performance pressure. According to the feedback from channel research, the repeated outbreaks in East China and Northeast China at the end of March and early April had a certain impact on the company (the two regions accounted for nearly 50% of the company’s revenue). On the one hand, consumer demand is strong and channel inventory digestion is fast; On the other hand, the repeated policies at the logistics end of the production and supply chain have a certain impact on the product structure and freight at the delivery end. In addition, the price increase is still in transmission, and the pressure on raw material cost needs to be alleviated by raising prices and adjusting product structure. It is expected that Q2 will alleviate the pressure on gross profit margin after the price increase is further transmitted.
Recommended combination in April: Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Chongqing Fuling Zhacai Group Co.Ltd(002507) , Juewei Food Co.Ltd(603517) , Anhui Gujing Distillery Company Limited(000596) , Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) . Maotai and Wuliangye Yibin Co.Ltd(000858) , which have stable dynamic sales under the epidemic situation, and Anhui Gujing Distillery Company Limited(000596) , Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) , which are less affected by the epidemic situation and whose payment and dynamic sales continue to exceed expectations, are recommended. In terms of food, it is recommended to actively pay attention to Juewei Food Co.Ltd(603517) , the layout of restaurant stewed flavor, and Chongqing Fuling Zhacai Group Co.Ltd(002507) , where the profit elasticity can be expected. The rise and fall in the month were
