Market review: this week (April 25 to April 29), Shenwan food and beverage industry rose or fell by – 7.24%, which was greater than the decline of – 0.46% in Shanghai and Shenzhen 300; Among them, Baijiu (Shenwan class III, the same below) (-0.28%), cooked food (-4.39%) and meat products (-4.43%) led the increase in Shenwan class III food and beverage; Baked goods (- 15.21%), snacks (- 12.20%) and dairy (- 10.38%) ranked among the top three in the decline of Shenwan level III food and beverage sectors.
Baijiu: the social aspect of the epidemic situation in Shanghai is cleared, and the consumption scene is expected to gradually recover. This week, the wholesale price of Feitian loose bottles was 26252640 yuan, and the whole box was 28202830 yuan, which was basically the same month on month. The wholesale price of puwu was about 980 yuan, up 10 yuan month on month, and the price system of famous wines remained stable. 1) On April 29, Shanghai cleared the social aspect for the first time, and the follow-up will enter the stage of normalized prevention and control; 2) On April 26, 26 delivery logistics enterprises including Shunfeng and Jingdong in Shanxi Province have resumed normal operation, and logistics is expected to resume normalization one after another. 3) At present, the channel inventory of leading liquor enterprises represented by Wuliangye Yibin Co.Ltd(000858) , Luzhou Laojiao Co.Ltd(000568) , Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , etc. remains at a benign level. The short-term may day consumption scene is still affected to a certain extent. It is expected that the consumption scene of the Dragon Boat Festival is expected to gradually return to normality. This week Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) announced the annual report and the first quarterly report. In the first quarter of 2022, the company achieved a revenue of 13.03 billion yuan, an increase of 23.8%, a net profit attributable to the parent company of 4.9 billion yuan, an increase of 29.1%, a revenue target increase of 15% in 2022. The company achieved rapid growth in the first quarter of 2022. It has basically completed the reform of products, organization and marketing, and the reform dividend is about to be released, We believe that the company has started a new round of enterprise business cycle driven by personnel cycle + product life cycle, and we suggest to pay active attention to it.
Popular products: focus on marginal improvement and select industry leaders. Affected by the rise in the price of raw materials on the cost side and the disturbance of the epidemic on the demand side, the overall performance of the first quarterly report of popular products was weak. On the margin, the prices of some raw materials stabilize or fall, and large-scale enterprises also give full play to their procurement advantages to lock in some costs in advance. With the gradual control of the epidemic, household consumption is expected to recover gradually. It is recommended to pay attention to sub industries with relatively stable demand, such as dairy products and condiments, and it is recommended to pay attention to leading enterprises with stronger anti risk ability and reasonable valuation. The scale effect of beer enterprises is significant. Although the cost per ton of leading enterprises has increased and the gross profit margin has declined due to the upward impact of barley, glass bottles and other prices, the net profit rate has remained stable under the price control fee increase. At the same time, the high-end trend is obvious, and there is the possibility of further price increase under the cost pressure. It is about to enter the peak consumption season. Beer will be a sub industry with strong elasticity under the consumption recovery and maintain the sector recommendation.
Investment suggestion: the industry is structurally prosperous. We will continue to recommend high-end / regional Baijiu leaders and focus on cost controllable anti inflation targets. In the short term, the newly increased margin of the epidemic in Shanghai has dropped, the logistics in some provinces has gradually returned to normality, the inflection point of the epidemic has gradually emerged, and the subsequent focus will be on the recovery expectation of consumption scenarios. In combination with sector valuation and fundamental certainty, we continue to recommend high-end Baijiu with high certainty and promising margin: Kweichow Moutai Co.Ltd(600519)
Risk tips: the adjustment of restrictive industrial policies exceeded expectations, the scattered occurrence and control of the epidemic affected the recovery of consumption scenarios, the risk of higher than expected rise in raw material costs, food safety risks, etc.
