Review: the quality of the annual report of Baijiu sector is commendable, and the first quarter report is full of confidence. In 2021 and the first quarter of 2022, Baijiu enterprises still showed strong resilience in the context of repeated epidemics, and their overall performance generally achieved high growth. The overall growth rate was sub high-end regional famous liquor high-end, and the profit growth rate was greater than the income growth rate. From the perspective of profitability, the product upgrading trend of Baijiu industry has not changed, and the gross profit margin of liquor enterprises has shown an overall upward trend. In addition, with the improvement of the cost investment efficiency and management efficiency of wine enterprises, the cost rate has an obvious downward trend. By price band: the overall net profit rate of high-end Baijiu is high and rising steadily; The gross profit rate of national sub high-end Baijiu is slightly lower than that of high-end Baijiu, and the fluctuation range of cost rate is greater than that of high-end Baijiu, mainly due to the large cost investment in the process of national expansion; The gross profit rate of regional famous liquor is slightly lower than that of secondary high-end Baijiu, and the overall cost rate is low. From the perspective of operation quality, in 2021, the growth rate of sales collection of most liquor enterprises was higher than that of revenue, and the advance collection (contract liabilities + other current liabilities) also achieved rapid growth. Due to the generally good completion of the annual objectives of liquor enterprises in 2021, the advance collection reservoir at the end of the year is very sufficient. 22q1 secondary high-end liquor enterprises generally released certain performance, while the advance collection of regional famous liquor still increased rapidly year-on-year due to the higher than expected dynamic sales in the first quarter.
Outlook: focus on scenario recovery in the first half of 2022 and wealth effect in the second half of 2022. Since the fourth quarter of 2021, the high base / low base effect of the Baijiu sector has basically been reflected in 2021, so the overall growth rate has begun to reflect the real demand level of the sector. As China’s epidemic management moves towards “precise prevention and control”, the phenomenon of city closures in various regions has been increasingly reduced, and the restrictions on consumption scenarios have been gradually weakened in the steady recovery of the catering industry. Regional Baijiu weakened due to the restrictions of consumption scenarios is expected to perform better. In the early stage of economic recovery, the scenario plays a key role, because the consumption capacity and willingness caused by income expectation are generally low, but if the scenario can be liberalized, some consumption can be released. We believe that under the background of stable growth policy, the economic stimulus policy will lead to Income Differentiation and consumption stratification, which is conducive to high-end products. However, the wealth effect is a post economic cycle, which requires the transmission of the stimulus effect. If the monetary policy is stimulated, it will take 1-2 months. If the credit policy is stimulated by stimulating infrastructure, it will take more than 3 months.
Investment strategy: give priority to the layout, the performance exceeds expectations, and focus on the recovery and benefit targets in Q2. Plate deduction order: first regional, then high-end, and then high-end. It is expected that the fundamentals of Baijiu this year will be interpreted in the order of “first regional, then high-end, and then high-end”, which is mainly driven by the consumption scenario and wealth effect. In the early stage of recovery, rigid demand consumption scenarios will take the lead in recovering. For example, wedding banquets and other public banquets, rigid demand is more constrained by the scenario rather than the ability to pay. When the consumption scenario recovers, it will recover definitively; High end Baijiu is more dependent on the wealth effect, which is the “post cycle” performance of economic stimulus, and the time point of the wealth effect is related to the economic stimulus policy. If it is monetary policy or shows its effect after January to February, if it is driven by production and employment through infrastructure and real estate, according to the historical experience of the impact of investment on Baijiu, the transmission cycle may be more than 3 months; The high growth of the secondary high-end still depends on the volume growth of channel expansion. After this round of repeated epidemic, the confidence of terminals, channels and consumers is generally low. The methods of investment attraction and expansion may need to be repaired for a period of time. The secondary high-end expansion cycle can be smoothly promoted only when the prosperity of the industry is high. Recommended target: recommend individual stocks based on two main lines. On the one hand, give priority to the layout of performance exceeding expectations. Specific targets such as Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , Anhui Gujing Distillery Company Limited(000596) , which benefit from scene restoration and 21-year low base. The first quarter of the annual report of 22 has a good performance, so it is recommended to give priority to the layout; On the other hand, regional liquor, high-end liquor and sub high-end liquor are arranged according to the logic of scenario recovery and wealth effect. Specifically, regional liquor recommends Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) , Xinjiang Yilite Industry Co.Ltd(600197) , and pays attention to Anhui Yingjia Distillery Co.Ltd(603198) , Laobaigan; High end liquor sticks to Wuliangye Yibin Co.Ltd(000858) , Kweichow Moutai Co.Ltd(600519) , Luzhou Laojiao Co.Ltd(000568) ; For the secondary high-end, focus on Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , Shede Spirits Co.Ltd(600702) , and Jiugui Liquor Co.Ltd(000799) , Sichuan Swellfun Co.Ltd(600779) .
Risk tips: the risk of repeated outbreaks and changes in control policies, the risk of economic downturn and the risk of deterioration of regional competition pattern
