Baijiu: actively optimistic about the compensatory consumption of the Dragon Boat Festival. It is expected to achieve more than half of the time task under the steady growth. We maintain the recommended logic for the recovery of Baijiu: 1) at the macro level, we have introduced more active policies to stabilize growth; 2) Economic policies are transmitted to the meso level such as the real estate chain; 3) Maowu’s wholesale price began to stop falling and pick up. In the early stage, the market was worried about the damage of residents’ consumption power under the impact of the epidemic. From the marginal point of view, the positive signals of consumption recovery were increasing: 1) LPR was cut by 15bp in May, which was higher than expected. The subsequent macro level steady growth policy is worth looking forward to, and it is determined that the annual growth of 5.5% will not be relaxed. 2) Before the Dragon Boat Festival, the terminal / channel collection is carried out as planned, and there is no annual plan for the winery to reduce temporarily. It is expected that the task achievement rate of Q2 collection end and statement end is high; 3) The original box Maotai / puwu rating price rose by 100 yuan / flat this week, the high-end continued to lead the prosperity of the Baijiu industry, and the price cycle is expected to continue under the follow-up stable growth policy. Looking forward to June, with the gradual unsealing of the epidemic and the replenishment of consumption scenes, consumption such as mass banquets and business banquets are expected to be better compensated during the Dragon Boat Festival, and the performance elasticity of sub high-end liquor enterprises is expected to highlight after consumption stabilizes. At present, the valuation of Baijiu has fallen back to a more comfortable range. With the orderly promotion of the subsequent resumption of work and production in East China, Hui liquor and Su liquor have benefited from the integration of the Yangtze River Delta. It is expected that the recovery of high-end liquor and guhui liquor will continue to focus on the main line of high-end liquor recovery, such as the price of fenjing liquor and guhui liquor, and the recovery of high-end liquor and guhui liquor will continue to be focused on the main line of high-end liquor recovery.
Beer: the resumption of work and production is about to usher in an inflection point, and the momentum of high-end beer continues. April May is the traditional peak season of beer. The base number is low due to the impact of rainy weather and the epidemic situation in South China in the same period of last year. 22q2 is expected to achieve a certain increase under the gradual easing of the epidemic situation. From a marginal point of view, the epidemic in Shanghai is about to win the decisive battle in May, and all localities begin to return to work and production one after another. The magnitude of the impact of the subsequent epidemic will be weakened phase by phase. Looking forward to may, it is expected that the growth rate of beer sales in other regions except Shanghai is expected to be positive. The valuation of the beer sector has fallen back to the comfortable range. It is expected that with the gradual relaxation of epidemic prevention and control measures, the consumption of ready to drink channels such as catering is expected to recover. We continue to be optimistic about the dynamic sales performance of beer during the peak season of Q2 Beijing Yanjing Brewery Co.Ltd(000729) recently announced that Geng Chao became the chairman of the company and was actively optimistic about the reform after the company’s management was settled.
Soft drinks: the logistics margin is improved, and the revenue is expected to grow steadily. Under the epidemic situation, the consumption scene of soft drinks is restricted and the logistics delivery is affected, but we observe that the logistics in various places has been marginally improved. The cost of packaging materials in the soft drink sector accounts for a high proportion. This year, the cost of pet, aluminum and other packaging materials continues to be high, putting pressure on the profit side of Companies in the industry. However, the new iteration of nongnongshan spring products among the leading enterprises is smooth, the Eastroc Beverage (Group) Co.Ltd(605499) national expansion is advancing steadily, and the revenue can grow steadily in the future.
Condiment: the growth rate of Q2 sector is expected to be repaired, focusing on Chongqing Fuling Zhacai Group Co.Ltd(002507) . From the perspective of the industry, the demand side is subject to the repeated epidemic, the catering consumption is damaged, and the consumption of the family side is degraded under the decline of consumption power and the improvement of online penetration (community group purchase, etc.); On the cost side, the cost of soybean is expected to be high throughout the year, and other Shenzhen Agricultural Products Group Co.Ltd(000061) and packaging materials and accessories are generally difficult to fall back. The dual pressure of demand and cost laid the tone of weak recovery in 2022. From the performance of 22q1, the performance of Haitian, Qianhe and Zhongju showed growth pressure, and the annual performance target guidance was also relatively stable. Considering the base influence of 22q1, the growth rate of 22q2 is expected to improve after the base falls. We are cautiously optimistic about the industry. This round of epidemic is led by East China, which also has an improvement trend, and 22q2 industry is expected to return to benign growth. In the follow-up, we still need to look at the improvement of the epidemic situation and the trend of costs, and watch for long-term recovery. In 2022, the cost of pickled mustard will be locked down + the short-term catalysis of the epidemic + the strategy will focus on the long-term, Chongqing Fuling Zhacai Group Co.Ltd(002507) short, medium and long-term logic, and the recommendation will be maintained.
Dairy products: the price of raw milk is relatively stable, and the consumption of dairy products is rigid under the epidemic situation. The average price of fresh milk in the second week of May was 4.16 yuan / kg, down 0.2% from the previous week. Under the epidemic situation, the supply chain of companies has been disturbed to some extent, but the epidemic situation will not change the residents’ demand for dairy products and other necessary materials, and the willingness to consume dairy products will remain. At the same time, all dairy enterprises will continue to optimize their expenses and upgrade their products, so as to improve their profitability in 2022.
Quick frozen food: the demand for end C is still strong, and end B needs to be repaired. Stimulated by the epidemic, there is a strong demand for C-end rice flour products and prefabricated dishes. Sanquan Food Co.Ltd(002216) as a key enterprise in Zhengzhou market, it produces at full capacity to ensure supply, which is promoted in the short term. The consumption of prefabricated dishes continued to rise. According to Jingdong data, Anjing pickled fish was the top 5 most popular prefabricated dishes in Jingdong in 2021, and the sales volume of 22q1 increased by 452% month on month. At present, the catering demand of end B is damaged, and it is expected that end B is expected to recover after the epidemic prevention and control policy is relaxed. We believe that the current competitive situation in the quick-frozen industry has eased, and the leading companies have significant advantages. With the steady growth of b-end demand, it can be expected, and many companies in the industry have arranged prefabricated dishes to contribute new increment. On the profit side Q1, the cost of some raw materials such as soybeans and oil still increased, but the purchase cost of pork decreased significantly. After the superposition of price increase and gradual transmission, the profitability of each company still has room to improve. Recommend Fu Jian Anjoy Foods Co.Ltd(603345) , a leader with deep barriers, and Sanquan Food Co.Ltd(002216) , which has achieved remarkable results in product channel reform.
Snack food: there is still interference from the short-term epidemic, and we look forward to the gradual release of post epidemic repair and price increase dividends. Q1 affected by the dislocation of the Spring Festival and the frequent occurrence of epidemic diseases, the revenue growth of companies slowed down and the profit was under pressure. In the short term, under the epidemic situation, the local sealing and control policies still interfere with the logistics delivery, but looking forward to Q2 and the whole year, the sector will usher in a low base, the internal reform of the company in the revenue side sector and the multi-channel expansion under the fragmentation of channels will have an obvious effect, the growth of revenue after the recovery of the epidemic situation is guaranteed, and the current low channel inventory may stimulate the demand for replenishment after the recovery of logistics; The profitability of many companies on the profit side can be repaired after the release of 21-year price increase dividends and the easing of raw material pressure. Recommend Chacha Food Company Limited(002557) , with controllable cost and smooth transmission of price increase and high profit certainty; Yanker Shop Food Co.Ltd(002847) , with all channel expansion in progress and high profit flexibility.
Frozen baking: the sales margin is improved, and the cost pressure on the profit side is digested by raising the price. We believe that the long logic of improving the penetration rate of frozen baking is still solid. At the same time, with the gradual improvement of the national epidemic, the sales will pick up, and the enterprise has excellent growth. The rising trend of palm oil on the profit side has turned around, and the performance of the leading profit side will be improved by superimposing the price increase. It is recommended to pay attention to the opportunities after the correction of the sector.
Investment suggestion: Baijiu sector: high-end Baijiu has obvious configuration value, the secondary high-end liquor is still in the upward cycle, adheres to the growth leader, and the local liquor is relatively stable under the epidemic situation, focusing on Kweichow Moutai Co.Ltd(600519) / Wuliangye Yibin Co.Ltd(000858) / Luzhou Laojiao Co.Ltd(000568) / Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) / Jiugui Liquor Co.Ltd(000799) / Anhui Gujing Distillery Company Limited(000596) / Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) / Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) / Sichuan Swellfun Co.Ltd(600779) Anhui Kouzi Distillery Co.Ltd(603589) etc. Beer sector: high-end continues to accelerate, short-term sales fluctuations do not change the upward trend of performance, focusing on Chongqing Brewery Co.Ltd(600132) / Tsingtao Brewery Company Limited(600600) / Beijing Yanjing Brewery Co.Ltd(000729) / China Resources beer / Guangzhou Zhujiang Brewery Co.Ltd(002461) , etc. Other liquor and beverage sectors: pre mixed liquor and energy drinks are Changpo good track, focusing on Shanghai Bairun Investment Holding Group Co.Ltd(002568) / Eastroc Beverage (Group) Co.Ltd(605499) / nongnongshan spring, etc. Condiment sector: focus on Chongqing Fuling Zhacai Group Co.Ltd(002507) / Foshan Haitian Flavouring And Food Company Ltd(603288) / Qianhe Condiment And Food Co.Ltd(603027) / Jonjee Hi-Tech Industrial And Commercial Holding Co.Ltd(600872) / Jiangsu Hengshun Vinegar-Industry Co.Ltd(600305) etc. Dairy products sector: focus on Shanghai Milkground Food Tech Co.Ltd(600882) / Inner Mongolia Yili Industrial Group Co.Ltd(600887) / Bright Dairy & Food Co.Ltd(600597) / New Hope Dairy Co.Ltd(002946) / Mengniu Dairy industry, etc. Quick frozen food sector: focus on Fu Jian Anjoy Foods Co.Ltd(603345) / Sanquan Food Co.Ltd(002216) , etc. Brine leisure sector: focusing on the main line of growth, focusing on channel driven, focusing on Chacha Food Company Limited(002557) / Juewei Food Co.Ltd(603517) / Zhou Heiya / Ganyuan Foods Co.Ltd(002991) / Yanker Shop Food Co.Ltd(002847) , etc. Frozen baking sector: under the background of rising labor costs and store rents, catalytic frozen baking dough is widely used, and the track is booming, focusing on Ligao Foods Co.Ltd(300973) / Namchow Food Group(Shanghai) Co.Ltd(605339) / Zhengzhou Qianweiyangchu Food Co.Ltd(001215) , etc.
Risk warning: macroeconomic downside risk; Food safety issues; Intensified market competition; The price increase was less than expected
