From April 18 to April 22, 2022, the food and beverage sector (Shenwan) fell by 1.80%, the Shanghai Composite Index fell by 3.87%, the Shenzhen Component Index fell by 5.12%, and the Shanghai and Shenzhen 300 fell by 4.19%. The food and beverage sector outperformed the Shanghai Composite Index by 2.07 percentage points, ranking fourth in the weekly rise and fall of Shenwan’s 31 primary sub industries.
The core point: steady growth helps to raise valuations and focus on Baijiu liquor: steady growth helps to raise the bottom of valuation, and pays close attention to the marginal improvement of the epidemic inflection point.
Last week, Maotai’s approval price decreased slightly, and the eighth generation Wuliangye Yibin Co.Ltd(000858) approval price reached 980 yuan. At present, the epidemic situation has rebounded, superimposed on the off-season demand, and the consumption momentum has slowed down. We should pay attention to the catalytic effect of the marginal improvement of the epidemic situation. The market of Baijiu Baijiu in 2020 was the first to recover from the epidemic. The two quarter of the Baijiu plan is relatively small compared with the whole year’s business plan, and the first quarter of high-end liquor has opened up the whole year’s growth trend. The high-end Baijiu has a good fundamentals, and the bottom of the valuation is enough to repair space. The steady growth characteristics suggest that the layout of the high-end liquor should be given priority. Sub high end performance differentiation, growth sustainability as the long-term main line, and the rating and terminal inventory dynamic sales level are the leading indicators for research and judgment. Focus on the high growth liquor with small impact of the epidemic and large advantageous market and strong single product volume. Willing to release the first quarterly report of 2022, Q1 achieved revenue / net profit attributable to parent company of RMB 1.88 billion / 530 million, with a year-on-year increase of 83.3% / 75.7%. The company’s product structure was upgraded and investment attraction was continuously strengthened Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) in the first quarter, the growth of the company is bright, and the short-term epidemic is expected to be less affected.
Beer: beer production has declined in the short term, and opportunities for medium and long-term layout appear. On April 21, the Ministry of industry and information technology disclosed the operation of the brewing industry from January to March 2022: in the first quarter, the beer output of brewing enterprises above Designated Size in China was 8.16 million kiloliters, a year-on-year decrease of 1.5%, of which the beer output in March was 2.849 million kiloliters, a year-on-year decrease of 10.3%. Affected by the epidemic, the decline of beer production in March is relatively serious. According to the experience of the epidemic in 2020, the impact of the epidemic on beer production is expected to be relatively short. Under the expectation of the improvement of the epidemic, it is expected that beer production may recover in May. Market sentiment in the beer sector showed a positive trend, with the beer sector up 6.71% last week. At present, beer manufacturers are actively preparing goods in the peak season from May to August. They expect the inflection point of the epidemic to drive the rebound of demand in the peak season, and the opportunities for medium and long-term layout appear under the improvement of the epidemic margin.
Condiment: take the initiative to deal with short-term disturbances such as costs and channels, turn danger into opportunity, and wait for the inflection point of industry demand. In 2021, the prosperity of the downstream industry of condiments rebounded, but at the same time, the residual wave of the epidemic disturbance was not flat, and the recovery of consumer demand was weak. In addition, factors such as rising raw material prices and channel changes put pressure on the profit side of condiment enterprises Yantai Shuangta Food Co.Ltd(002481) , Anji Foodstuff Co.Ltd(603696) , Jiajia Food Group Co.Ltd(002650) 2021 revenue was about + 7%, + 31%, – 15% year-on-year respectively, and the net profit attributable to the parent company was about – 24%, – 14%, – 145% year-on-year respectively.
Guangdong Jialong Food Co.Ltd(002495) through the differentiation strategy to expand revenue, the hedging profit side went down, and the revenue in 2021 increased by about 15% year-on-year; The net profit attributable to the parent company increased by about 174% year-on-year. In the first quarter of 2022, the rebound of the epidemic in Shanghai and other places led to relatively weak demand. At the same time, the rising trend of raw material prices continued, and many enterprises were under great pressure. When the demand inflection point is approaching, enterprises that take the lead in product differentiation and diversified layout and adapt to channel changes in advance are expected to achieve rapid growth in performance.
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) ; Expected growth of ɘ ɘ ɘ ɘ ɘ ɘ ɘ ɘ ɘ ɘ ɘ ɘ ɘ ɘ 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.
