This week’s view
[Baijiu]: the wind is coming, and the Baijiu will rebound after epidemic.
Plate review: Baijiu sector fever this week picked up, optimistic about the opportunity to rebound after the epidemic.
April 18th ~4 22, 5 trading days, the Shanghai and Shenzhen 300 index fell 4.19%, the food and beverage sector fell 1.80%, Baijiu sector fell less than the Shanghai and Shenzhen 300, or 1.99%. Specifically, in terms of the specific details, it’s more likely to see that ‘ Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) atpresent, the market is affected by the epidemic as a whole, with limited marginal changes and smooth progress of payment collection.
Shede Spirits Co.Ltd(600702) : the performance is in line with expectations, and the channel quality has increased. We believe that the performance of Shede Spirits Co.Ltd(600702) 22q1 has the following two highlights: 1) the upgrading trend of product structure continues. In 2022q1, the revenue of medium and high-grade liquor (shede and Tuopai Tianqu) of the company was 15.75 (+ 90.98%), and the revenue of high-end liquor increased by 3.67 percentage points to 88.31% compared with the whole year of 2021, and the ton price increased steadily. Under the background of completing the performance target ahead of schedule, 22q1 stopped the goods in the national market in March to further digest the inventory. Therefore, 22q1 generally showed a good situation of upward rated price, low inventory and better than expected payment collection performance; 2) In the context of high performance growth, the channel has high quality and strong sustainability. The main growth source of 22q1 company is still the base markets such as northeast Sichuan, Hebei, Shandong and Henan: 22q1 company is 455 million yuan (+ 72.60%) inside / outside the province respectively / 1.202 billion yuan (+ 112.35%). In addition, the main sources of growth are still old merchants / big merchants, and the quality of dealers has been continuously improved: under the background that the number of big merchants above 5 million accounts for about 20% and the revenue accounts for about two-thirds, the number of 22q1 dealers has increased by 157 to 2409 month on month, realizing a small and steady increase in volume; The average size of a single dealer in 22q1 was 688000 yuan, an increase of 60.92% over the same period last year, and continued to achieve high-speed growth in quality.
Sichuan Swellfun Co.Ltd(600779) : 21 years ended smoothly, and 22q1 profit was under pressure in the short term. We believe that the performance of Sichuan Swellfun Co.Ltd(600779) 2122q1 has the following two highlights: 1) the trend of high-end is gradually deducting: in 2021, high-end achieved 45.19 (+ 54.33%), the revenue accounted for 0.15% higher than the same period last year, and the gross profit margin also increased steadily (the year-on-year growth of No. 8 + Jingtai + Jingtai ice and snow in 2021 was 55%; the year-on-year growth of essence, collection 2021, collection of ice and snow and collection of Sanxingdui was 58%); The proportion of high-grade liquor revenue of 22q1 company increased by 0.80 percentage points to 97.88% compared with the same period last year. 2) Rapid development of core markets: in 2021, the company’s eight core markets increased by 61% year-on-year (six markets continued to grow at a high speed, Henan was affected by the epidemic and flood / Hunan was affected by the active adjustment, and the overall growth rate was slightly lower), and other markets increased by 44% year-on-year. It is worth mentioning that the growth rate of net profit in 22q1 was lower than expected, mainly due to the increase of expenses (during the period, the expense rate / sales expense rate / management expense rate changed by 9.47/7.34/2.06 percentage points to 35.37% / 29.00% / 7.01% respectively compared with the same period last year). Under the epidemic, the company maintained performance growth under the epidemic by means of online press conference / small tasting / code scanning activities / strengthening group purchase.
Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) research update: excellent payment collection progress, low inventory and smooth upgrade. In the short term: 1) the progress of payment collection is higher than expected: at present, the progress of payment collection across the country has reached 63%. The “70 day storm” held on April 21 proposed to complete the goal of 70% payment collection by the end of the second quarter and the task of the whole year by the end of the third quarter. Despite the short-term impact of the epidemic, the 25% target of the whole year is highly achieved; 2) Inventory health is better than expected: under the background of upward rating, the national inventory of dream blue is lower than 16 points, and the inventory in the province is at the excellent level of 5-10 points; Haitian stocks also remain healthy; 3) Product upgrading exceeded expectations: since this year, M6 + has achieved stable and upward price through regional accurate control of quantity and price, and can be expected to reach 10 billion in the whole year; M3 crystal version has been successfully upgraded; The Spring Festival exam shows that sky blue has high market acceptance and is in the middle and late stage of upgrading; Sea blue is about to be upgraded (positioning the price band of 150 yuan). This year, the company has completed the upgrading of all main products, and next year will usher in a dividend release year; 4) Market development outside the province exceeded expectations: this year, the company divided the region into 61 business divisions, promoted young people and improved business efficiency, including solid performance in Henan / Shandong, accelerated performance in Anhui, brilliant performance in Jiangxi, dream series in Northeast China or facing the outbreak period. In the medium and long term: Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) as the leader of sujiu liquor with strong channel power, it has strong competitive advantage internally and the external market outside the province is the second growth curve. We are optimistic about the continuous release of the company’s reform dividend thereafter.
Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) research update: V series is still the key product, and Gaogou revival is in progress. Review 2021: 1) V Series: the fastest growth rate, with an average annual target of more than 50% during the 14th Five Year Plan period. Among them, V3 has completed the comprehensive layout in the province, and 22q1 continues to strengthen the order of V3 distribution channels and inventory control; 2) Guoyuan: the fourth open has achieved renewal and upgrading, and the growth rate of opposite opening at the beginning of the year is faster than that of the fourth open, mainly due to the upgrading of urban and rural mass consumption + the improvement of brand strength; 3) Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) : the new generation of planet series will be upgraded in 22 years, and the price band of 100300 yuan will be supplemented; 4) Gaogou: establish Gaogou liquor sales company to promote the revival of Gaogou brand / accumulate experience for the next implementation of sub brand substantive operation; 5) The province will deepen intensive cultivation and expand its high-end leading edge. There is still room for growth in all regions of the province, which can support the development requirements of the province in the 14th five year plan; 6) Dual brand layout, the strategy outside the province is comprehensive planning, key breakthrough, echelon development and rolling development. Four focuses: ① focus on strategic focus: form about 50 small model markets, 20 prefecture level markets, and 30 county and district level markets. ② Focus on products: V9 is distributed in the Yangtze River Delta and East China, and the national edge is opened in all directions. Explore the fragmented promotion mode of Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) brand. ③ Focus on core customers and focus on excellent business. ④ Focus on organizations outside the province: further empower the marketing center, stimulate the endogenous power of the front-line, and give the front-line soldiers more decision-making power. Looking forward to 2022: the company’s target revenue of 7.5 billion and challenge of 8 billion in 22 years; With a net profit of 2.25 billion and a challenge of 2.35 billion, we have high accessibility.
Data update: the Kweichow Moutai Co.Ltd(600519) rated price tends to be stable this week, and the overall inventory performance is healthy
Kweichow Moutai Co.Ltd(600519) : the pricing of Feitian Maotai / 1935 is stable at 2620 yuan and 1410 yuan this week. With the launch of e-commerce platform, the pricing of Feitian Maotai may be effectively controlled at different stages Wuliangye Yibin Co.Ltd(000858) : the wholesale price was stable at 980 yuan this week. Under the superposition of Wuliangye Yibin Co.Ltd(000858) rising retail price and accelerating market self inspection, the wholesale price rose slightly this week Luzhou Laojiao Co.Ltd(000568) : the wholesale price is about 910920 yuan. The growth target of Guojiao in 22 years is 30%. The overall performance of the wholesale price is stable.
Investment suggestion: the wind is coming. It is suggested to pay attention to the rebound opportunity of liquor enterprises that can maintain excellent growth in 22q1 / Q2
Intensive release of the next annual report and quarterly report & the phased implementation of the reform measures of liquor enterprises is the catalyst for important sectors. Considering that the sectors have experienced the decline of “basically facing the good trend unchanged, mainly disturbed by the emotional side” in the early stage & the valuation of the sector has also been cost-effective, and the epidemic may usher in an inflection point, which is expected to boost market sentiment, it is suggested to make a positive layout: 1) optimize the layout of high-end liquor with little impact on performance / anti risk ability; 2) The target with strong certainty of 22q2 performance growth, good marginal change and reasonable valuation is preferred. The specific elements include: strong business strength and anti risk ability & the main base market is less affected by the epidemic situation & the performance driving force comes from mature products rather than investment promotion & 22q2 still performs well compared with 22q1. Recommended objects: [ Kweichow Moutai Co.Ltd(600519) ], [ Wuliangye Yibin Co.Ltd(000858) ], [ Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) ], [ Anhui Gujing Distillery Company Limited(000596) ], [ Shede Spirits Co.Ltd(600702) ], [ Anhui Yingjia Distillery Co.Ltd(603198) ], etc.
[beer sector]: the sector is stable this week, focusing on post epidemic repair opportunities
Plate review: the sector was stable this week, focusing on the sector repair opportunities under the recovery of catering supply chain after the epidemic
From April 18 to April 22, the CSI 300 index fell 4.19% in five trading days, the food and beverage sector fell 1.80%, and the beer sector rose by 0.29% more than the CSI 300. Specifically, for the beer sector, Chongqing Brewery Co.Ltd(600132) (+ 2.39%), Budweiser Asia Pacific (+ 0.74%), Tsingtao Brewery Company Limited(600600) (+ 0.73%), China Resources beer (- 2.05%), and Beijing Yanjing Brewery Co.Ltd(000729) (- 2.31%), the performance of the board was stable this week. We believe that if the epidemic is well controlled in April, gradually relaxed nationwide, and the peak consumption season is normal in May, the impact of the epidemic on the annual sales of beer enterprises is expected to be limited. It is suggested to pay attention to the repair opportunities of the beer sector under the recovery of the catering supply chain after the epidemic.
Chongqing Brewery Co.Ltd(600132) update: the impact of the epidemic is generally controllable, and the high growth of USSR leads the large-scale production
The overall impact of epidemic situation and cost is controllable + Wusu high growth, thickening profits and driving the volume of waist products + big city plan & Channel sinking & accelerated development under the completion of Bu adjustment = performance or exceeding expectations. Specifically:
1) at present, the impact of the epidemic is controllable: Recently, the inventory of dealers in East China is high, the epidemic has little impact on the southwest and northwest of the strong market, and has a significant impact on the catering end. At present, Fujian has achieved normal shipment, and the overall impact of the epidemic is still controllable.
2) Wusu’s high growth drives the volume of waist products: Wusu is still expected to maintain rapid growth this year. In terms of structure, it is expected that 200000 tons of green Wusu, less than 100000 tons of Wusu pull cans and other products, and the rest are red Wusu. The ex factory price of 1664 is one of the highest priced brands in China. At present, Yancheng factory can produce 250ml products. Driven by Wusu, Lebao and heavy beer achieved rapid growth through bundling sales with Wusu + KPI assessment in the form of brand combination.
3) the cost under price increase + price lock is controllable: the price increase of Wusu outside Xinjiang in February is expected to be reflected to the report end in Q2. At present, Wusu in catering channels is higher than 12 yuan, the terminal and consumers have high acceptance of the price increase, and the prices of Fenghuaxueyue, Jiangsu Tianmu Lake Tourism Co.Ltd(603136) , Shancheng and other products have not been increased. Last year, the price of glass bottles, cartons and plastic bags was locked. At present, the cost pressure is mainly raw materials and transportation costs. Comprehensive price lock and price increase, the cost is controllable this year.
4) channel sinking promotes sales growth: at present, Shanxi, Shaanxi, Henan and other regions are provincial generation mode, while Fujian, Jiangsu, Shandong and other regions have gradually changed from provincial generation mode to prefecture level city generation mode, promoting the rapid growth of sales. At present, the beer industry accounts for 55% of current drinks, 30% of tobacco and alcohol convenience stores and less than 10% of Ka channels, of which Wusu catering channel accounts for 60% – 70% and 1664 night show accounts for about half.
5) the adjustment of big city plan + Bu is completed to promote the nationalization and accelerate the development: in the main sales market of USSR, the northwest is the first echelon, the southwest, South and East China are the second echelon, and the north and northeast are the third echelon. The big city plan aims at the development of Suzhou, Xuzhou, Baotou, Quanzhou and other large cities with economy and population (rather than provinces, focusing on resources), and recruits big businessmen with strong government resources, terminal resources and financial strength. More than 60% of the increment of Wusu last year came from the big city plan, which will allow big businessmen to develop other surrounding areas later. At present, the adjustment of Bu has been completed, CIB and Xinjiang Bu are relatively large, and Chongqing, Ningxia and Yunnan Bu only cover the surrounding markets. The person in charge of Bu has rich experience and has the authority of personnel, finance and supply chain.
Investment suggestion: pay attention to the repair opportunities of beer sector under the recovery of catering supply chain after the epidemic
We believe that if the epidemic situation ushers in the inflection point as soon as possible, the nationwide control is relaxed, and the peak consumption season in May is carried out normally, the impact of the epidemic on the annual sales of beer enterprises is expected to be limited. It is suggested to pay attention to the current two observation points [the inflection point time of the epidemic situation] and [the number of provinces continuously affected by the epidemic after April] to grasp the opportunity of sector repair after the epidemic situation. At the same time, considering the high-end upgrading trend of the beer industry in the past 22 years, it is highly certain that the price increase will lead to the improvement of the profit margin in the past 22 years + the optimization of the industry pattern.
Focus on recommending [ Chongqing Brewery Co.Ltd(600132) ], whose main market is less affected by the epidemic and Wusu is still expected to achieve high growth in 22 years; And focus on [ Tsingtao Brewery Company Limited(600600) ] with high valuation and cost performance, 22-year white beer is expected to maintain a rapid development speed, and there is a large space for pure production and long-term development.
II. [food sector]: pay attention to the layout opportunities brought by the rebound of the post epidemic sector
Plate review: the sector fell slightly this week, focusing on the layout opportunity of sector rebound after the epidemic
Plate growth: food processing sector fell 2.27%, of which seasoning sector fell 1.68%, dairy sector fell 1.06%, meat sector fell 0.31%.
In terms of the rise and fall of individual stocks: Anji Foodstuff Co.Ltd(603696) (+ 37.97%), Qingdao Foods Co.Ltd(001219) (+ 25.96%), Qingdao Richen Food Co.Ltd(603755) (+ 16.79%) ranked among the top three in the sector. In the meat products sector, Zhejiang Huatong Meat Products Co.Ltd(002840) (+ 4.22%), Henan Shuanghui Investment & Development Co.Ltd(000895) (+ 1.68%) and Jinzi Ham Co.Ltd(002515) (+ 1.64%) increased the most; In the seasoning sector, Anji Foodstuff Co.Ltd(603696) (+ 37.97%), Qingdao Richen Food Co.Ltd(603755) (+ 16.79%), Qianhe Condiment And Food Co.Ltd(603027) (+ 4.87%) rose the top three; In the dairy sector, Beingmate Co.Ltd(002570) (+ 1.08%) rose slightly, Beijing Sanyuan Foods Co.Ltd(600429) (- 0.37%) and Inner Mongolia Yili Industrial Group Co.Ltd(600887) (- 0.67) fell slightly; In the comprehensive food sector, Qingdao Foods Co.Ltd(001219) (+ 25.96%) led the rise, while Sanquan Food Co.Ltd(002216) (+ 15.42%) and Three Squirrels Inc(300783) (+ 6.40%) followed the rise.
This week’s view: focus on the layout opportunities brought by the rebound of sectors after the epidemic!
At present, we still suggest that we continue to pay attention to the layout opportunities of rebound after the epidemic in the near future. Welcome to our post epidemic special series report “who will take the lead after the epidemic? — Dazhong product 22q2 investment strategy”
The main points are:
[previous market view] in 2022, the cost of mass products will see the superposition of inflection points, the appearance of price increase + the improvement of demand, and the overall opportunity of the sector will be brought by the simultaneous rise of volume and price.
[actual situation] However, after entering 2022, the scattered outbreak of the epidemic has limited the consumption scene; The recovery of demand is slow, and the consumer demand has not been significantly improved. At the same time, the cost continues to rise, which makes the previous market expectations and logic for mass products unable to be fully realized. Therefore, we believe that:
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 defense allocation value of leading dairy enterprises is prominent, and it is expected to promote double-digit income growth through volume increase + category structure adjustment + product structure upgrading
