The epidemic affected the social zero data in April, and a rational view on the short-term pressure of Baijiu
From May 16 to May 20, the food and beverage index rose by 1.3%, ranking 20th in the primary sub industry, about 0.9pct lower than Shanghai and Shenzhen 300. Among the sub industries, soft drinks (3.4%), snacks (2.8%) and pre processed food (2.5%) are relatively leading. We observed that the total amount of social zero decreased by 11.1% year-on-year in April, of which the total income of catering and catering above the quota decreased by 22.7% and 24.0% respectively, and the growth rate was the lowest level since May 2020. The main reason is affected by the epidemic. On the one hand, the consumption scene is limited, resulting in the decline of consumption demand; On the other hand, the impact of logistics leads to poor supply in some regions. In April, the retail sales of tobacco and alcohol decreased by 7% year-on-year, which is significantly related to the restriction of consumption scenarios; Grain, oil and food increased by 10% year-on-year, and the consumption of mandatory items still maintained a steady growth. We expect that with the gradual improvement of the epidemic situation, the total social zero data in May should improve month on month, but the overall operation is still in weak regions. This week, Baijiu enterprises started to pay for the Dragon Boat Festival. Under the pressure of the epidemic, the normal pace of de stocking was further delayed, terminals and consumers were more cautious in stocking, and the collection end of Baijiu industry began to face pressure. In order to promote the payment collection of the Dragon Boat Festival, some wineries reduce the cost of dealers by providing financing support and investment expenses, and help dealers to get rid of inventory by repurchasing inventory and increasing investment in terminal stores, so as to promote the payment collection of dealers. The channel has stronger confidence in strong first-line brands with good liquidity and fast liquidity, and has a high degree of cooperation in payment collection; Second and third tier brands with insufficient brand construction are more cautious. We are optimistic about the long-term outlook for Baijiu, and the short-term pressure is gradually released. It is still recommended to increase the participation in Baijiu in the whole year. At present, we can first lay out Kweichow Moutai Co.Ltd(600519) Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) etc. with higher certainty.
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’s revenue and profit increased by 44% and 70%, 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.
