The recent passive devaluation of the RMB against the US dollar has further increased the purchase cost of bulk commodities. For food and beverage companies, 2022q1 is facing the dual pressure of demand impact caused by the epidemic blockade and rising costs. The gross profit space of enterprises is facing the double squeeze of insufficient downstream demand, difficult price increase and rising upstream costs. From the perspective of configuration, we suggest paying attention to the Baijiu sector that is less affected by the cost, and the dairy products and pickled mustard sub sectors with downward space for some raw materials.
On the evening of April 22, both onshore and offshore RMB fell below the 6.5 mark. The offshore RMB once fell below 6.54, a new low in a year, and the onshore RMB fell below 6.50 for the first time since August last year. We believe that the passive devaluation of RMB will further increase the purchase cost of bulk commodities, and the purchase cost of food and beverage enterprises in palm oil, soybean oil and other bulk commodities may be further increased.
Since the beginning of this year, affected by the global epidemic and supply, international bulk commodities have increased significantly. The cost side has increased significantly in the first quarter. Although many enterprises locked the price at the beginning of the year, the price locked at the beginning of the year has increased compared with last year. On the other hand, the price locked period of oil is mostly three months, and the purchase price in the coming second quarter is still facing high cost pressure.
Regardless of the impact of the epidemic on sales, from the cost point of view, the impact of rising costs on Baijiu enterprises is generally weak due to high gross profit margin. Although the costs of freight and packaging materials of dairy products have increased significantly, the cost of raw milk has decreased, and the cost side is expected to be controllable as a whole. This year, the average purchase price of green vegetables in mustard industry decreased from 1100 yuan per ton last year to 800 yuan per ton, and the cost decreased greatly. It is suggested to pay attention to the leading enterprises in the sector that are less affected by the rise of costs and the decline of costs. We continue to recommend Kweichow Moutai Co.Ltd(600519) , Inner Mongolia Yili Industrial Group Co.Ltd(600887) .
Risk warning: the epidemic has led to lower consumer demand than expected; The company’s operation is not as good as market expectations.
Review of Hong Kong Stock Market:
This week, the essential consumption index of Hong Kong stocks fell by 0.51%, of which the key companies rose or fell by 3.59% for Yihai international, 1.63% for China Wangwang, 0.74% for Budweiser Asia Pacific, 0.70% for Zhou Heiya, 0.12% for nongnongshan spring, 0.27% for Master Kang holdings, 2.05% for China Resources beer and 3.01% for China Feihe.
