The performance of Baijiu in the first quarter is generally good, and the performance of popular products may be better in the second quarter
From April 25 to April 29, the food and beverage index rose by 0.7%, ranking fourth in the primary sub industry, outperforming Shanghai and Shenzhen 300 by about 0.6pct. The first quarter report of 2022 has been disclosed, and the food and beverage industry has shown strong differentiation characteristics: in 2022q1, there was a recurrence of the epidemic in some regions, and Baijiu performed better than expected in most regions during the Spring Festival. The main reason is that the impact of the epidemic in most regions is relatively small, the policy of Panasonic has increased the rate of returning home, the consumption of catering, retail and tourism has warmed up, the consumption environment and prosperity of Baijiu have improved significantly, and the Spring Festival sales are booming, Driving the overall revenue and net profit of Baijiu to grow at a high speed, with the growth rate rising month on month. The pressure on revenue and profit of Volkswagen products in the first quarter increased, mainly due to: on the one hand, the sudden epidemic affected consumer demand and supply from consumption scenarios and logistics control, resulting in payment collection pressure for most companies; On the other hand, the Ukrainian Russian war affected commodity prices and put great pressure on the raw material costs of Volkswagen products companies. From the fund’s heavy positions in the first quarter, the proportion of food and beverage positions continued to decline, and there was a fund position reduction sector, but the shareholding concentration increased.
Looking forward to the whole year, the epidemic is an important factor affecting fundamentals and stock prices. At present, the society pays more attention to epidemic prevention and control, and the risk of large-scale spread of the epidemic is not high. Superimposed on the significant decline in the number of new cases per day, we expect that the second quarter should be a gradual bottoming process of sector fundamentals. Judging from the rhythm, the payment collection of most food and beverage enterprises in the second quarter has varying degrees of impact, but mass products are facing a low base effect, and the data performance may be better. From the perspective of trend, the second half of the year should be a month on month improvement. The Mid Autumn Festival can be expected to make up in the peak consumption season. We suggest to grasp the annual investment opportunities from two main lines: first, look for the industry leaders with low value and high prosperity at the bottom to make medium and long-term allocation; Second, look for short-term high growth varieties according to the performance fluctuations between quarters. Recommendations include: ‘ Kweichow Moutai Co.Ltd(600519) \ , Juewei Food Co.Ltd(603517) etc.
Recommended combination: Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , Foshan Haitian Flavouring And Food Company Ltd(603288) , Chongqing Fuling Zhacai Group Co.Ltd(002507)
(1) Kweichow Moutai Co.Ltd(600519) 2022q1 revenue and profit increased by 18% and 24% respectively, which exceeded expectations, showing the trend of high-end Baijiu sales in the Spring Festival, and also reflecting the remarkable results of sales reform. The e-commerce platform was officially launched, and the channel reform went further. The company has room to move calmly in terms of volume and price, and the logic of simultaneous rise of volume and price in the future is smooth. (2) Wuliangye Yibin Co.Ltd(000858) 2022q1 achieved revenue growth of 13% and net profit growth of 16%. During the Spring Festival, the inventory of movable sales is good. After the management of the company is stable, it is expected to carry out the work of raising prices. It is estimated that the double-digit growth rate will be completed in 2022. (3) Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) 2022q1 revenue and profit increased by 44% and 70% respectively, mainly due to the significant improvement of product structure, the growth momentum under the epidemic situation remains unchanged, and the annual performance is still possible to exceed expectations. (4) Foshan Haitian Flavouring And Food Company Ltd(603288) 2022q1 revenue increased by 0.7% due to the impact of the epidemic. The increase in cost price led to pressure on profits, and the net profit decreased by 6.4%. In 2022, the planned revenue and profit will increase by 12%, which will be realized by reducing cost and increasing efficiency, accelerating market transformation and product innovation. It is suggested to lay out the bottom and hold it for a long time. (5) Chongqing Fuling Zhacai Group Co.Ltd(002507) : in 2022q1, the revenue and profit decreased by 2.9% and 3.1% respectively. The improvement of profit margin in the whole year is the biggest highlight. The main sources are: first, the effect of price increase at the end of the year should appear in the whole year; Second, the cost reduction is relatively clear; Third, the cost rate shrank accordingly. The performance release has a band market, and it is expected that the profit of the statements in the second and third quarters may increase relatively.
Risk tips: economic downturn, food safety, fluctuations in raw material prices, lower than expected recovery in consumer demand, etc.
