Core view
Last week, the A-share market closed down for three consecutive weeks, reproducing the deep adjustment. Large cap stocks still perform better than small and medium-sized stocks, with stability and consumption relatively better than growth and finance. The obvious adjustment of Baijiu is mainly due to the growing concern of the market about the lack of Baijiu consumption scenarios and the slowdown of mobile sales. We believe that the period from March to April is the off-season for Baijiu consumption, with a slowdown in mobile sales and little pressure on digesting inventory. At present, the valuation of Baijiu has fallen back to a reasonable level. After the epidemic situation is alleviated, there will be obvious replenishment as the business and banquet demand picks up. At present, most of the companies are expected to be 22-30 times more popular in the first week of the year, and the performance of the company is expected to be highlighted.
Industry trend review
Overall market performance, last week, the CSI 300 fell 4.19% to close at 401325, of which the food and beverage industry fell 1.80%, outperforming the CSI 300 index by 2.39 percentage points and ranking fourth among the 28 Shenwan sub industries. In terms of sub sectors, last week, most of the shenwanzi sector of food and beverage were in a state of decline, of which Baijiu II fell the most, by 1.83%, followed by beverage dairy products (-1.52%), food processing (-1.34%), and flavoring and fermented products (-0.99%). In terms of individual stocks, Anji Foodstuff Co.Ltd(603696) (37.97%), Kuaijishan Shaoxing Rice Wine Co.Ltd(601579) (37.41%), Qingdao Richen Food Co.Ltd(603755) (16.79%), Sanquan Food Co.Ltd(002216) (15.42%), Three Squirrels Inc(300783) (6.40%) led the performance.
Industry highlights and important announcements this week
(1) jiushuo reported that on April 18, according to the official news of Maotai, the total number of registered users of “I Maotai” exceeded 10 million, becoming an e-commerce app of tens of millions. Since the trial operation on March 31, “I Maotai” has accumulated more than 497345 million people and 131 million people have participated in the subscription. In addition, I Maotai app also opened the “enjoy Maotai · renyin tiger Mao” subscription session from 20:00 to 20:30 p.m. on April 19, and prepared 9999 bottles of 500ml Kweichow Moutai Co.Ltd(600519) wine (year of the renyin tiger). (2) On April 21, Shede Spirits Co.Ltd(600702) released the first quarter report of 2022. The report showed that the operating revenue in the first quarter was 1.884 billion yuan, an increase of 83.25% year-on-year. The net profit attributable to the shareholders of the listed company was 531 million yuan, a year-on-year increase of 75.75%.
Investment advice
1) after the early correction, the pessimism of Baijiu sector was released. Hold on to the first-line Baijiu and look for the second and third lines with high elasticity. It is suggested to pay attention to Kweichow Moutai Co.Ltd(600519) ; 2) Although the price increase of mass products alleviated the cost pressure last year, due to the general rise in global commodity prices and the continuous rise in the prices of many raw materials, the cost side pressure is still relatively large. Superimposed on the current weak market demand and the existence of high inventory in some sectors, we believe that the overall investment opportunity of mass products sector still needs to wait. 3) The epidemic has been repeated, and home consumption has become the main axis, driving the demand for prefabricated vegetables. It is suggested to pay attention to individual stocks of prefabricated vegetables.
Risk tips
Risk of epidemic exceeding expectations, risk of food safety and risk of market style change
