By sorting out the historical valuation data, we found that the relative valuation of food, drink and Baijiu has increased since the outbreak in 2020. The data from 2017 to now show that, compared with the CSI 300, the average relative valuations of food, beverage and Baijiu (sector pe/ CSI 300pe) are 2.72 and 2.59 respectively. The data can be divided into two stages: 1) from 2017 to March 2020, the relative valuation multiple is lower than the average; 2) After March, 2020, the relative valuation was significantly higher than the average value. We believe that the increase in the relative valuation of Baijiu and food and drink is related to the performance certainty and resilience reflected after the epidemic.
In the short term, the relative valuation of the food and beverage sector has returned since May. The sharp decline of the growth sector in April led to a significant increase in the relative valuation of the Baijiu and food and beverage sectors, while the growth stocks rebounded significantly under the catalysis of the resumption of production and work after May, macro policy expectations and other events. Compared with April, after entering may, the relative valuation of the sector returned to the average level. From our communication with investors, the market has paid more attention to consumption.
Recent stimulus policies have been implemented frequently. On May 20, the people’s Bank of China authorized the national interbank lending center to announce that the one-year LPR was 3.7%, which remained unchanged; The LPR over 5 years was 4.45%, down 15bp, intended to stabilize the real estate market and broaden credit, and local real estate policies were also relaxed. Consumption, as the “post cycle” of economic recovery, is the result of the recovery of the economy and the improvement of consumption willingness. The introduction of local consumption stimulus policies has helped to boost the expected recovery of consumption.
Different from 2020, the start of the movable pin may be slower than that at that time. Combined with our channel and market research, the restrictions of the current scenario still exist, and the enthusiasm of channel providers and terminals for consumption is still weak. It is generally expected that there will be no obvious compensatory consumption similar to that in May and October 2020. We believe that the epidemic has an impact on all aspects of consumption, such as upstream costs, start-up production, logistics distribution and terminal demand, and the pace and intensity of consumption recovery will probably be weaker than that in 2020. However, we believe that there may be regional imbalance in the early stage of recovery, which is mainly based on the local epidemic prevention policies and economic stimulus measures. At present, Jiangsu, Zhejiang and Anhui and other places or follow-up have performed well, because with the victory of epidemic control in Shanghai and the significant reduction of spillover pressure, the prevention and control measures will be significantly improved; At the same time, these regions have recently introduced strong means of real estate and other stimulus policies.
Recently, the wholesale price of Maotai has increased. Sanfei has increased from about 2650 yuan in the early stage to more than 2750 yuan, and the original box of Maotai has increased from 2800 yuan to about 3000 yuan. It may be related to the overall demand boost near the Dragon Boat Festival. Now the epidemic situation has improved and the official operation of e-commerce has reassured dealers. The delivery rhythm has not been planned in May last year. Therefore, the wholesale price of Maotai has warmed up under the boost of terminal demand. The rise of Maotai’s wholesale price will help boost the enthusiasm of consumption and investment.
Investment strategy: after the return of relative valuation, the performance price ratio of the sector is gradually improved, and the scenario recovery sector continues to be recommended. At present, the focus is on the certainty and flexibility in the recovery. At the early stage of the recovery of the epidemic, the market is cautious about the income expectation, and the regional Baijiu and catering used for public banquets are highly certain; After the release of scene constraints, drinking and other scenes have high recovery elasticity, and sectors such as beer benefit more. Specific recommended targets: arrange regional liquor, high-end liquor and sub high-end liquor according to the logic of scenario recovery and wealth effect. Recommend regional liquor Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , Anhui Gujing Distillery Company Limited(000596) , Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) , Xinjiang Yilite Industry Co.Ltd(600197) , and pay attention to Anhui Yingjia Distillery Co.Ltd(603198) , Hebei Hengshui Laobaigan Liquor Co.Ltd(600559) ; High end wine recommendations Wuliangye Yibin Co.Ltd(000858) , Kweichow Moutai Co.Ltd(600519) , Luzhou Laojiao Co.Ltd(000568) ; The secondary high-end has fallen, but the fundamentals depend on the progress of dealers’ confidence recovery. Focus on Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , Shede Spirits Co.Ltd(600702) , Jiugui Liquor Co.Ltd(000799) , Sichuan Swellfun Co.Ltd(600779) . In terms of popular products, give priority to the beer sector with high recovery flexibility, and recommend Tsingtao Brewery Company Limited(600600) , Chongqing Brewery Co.Ltd(600132) , China Resources beer, Beijing Yanjing Brewery Co.Ltd(000729) , etc; It is suggested to look at the leader of the strengthening of competition barriers from a medium and long-term perspective, such as Fu Jian Anjoy Foods Co.Ltd(603345) , Juewei Food Co.Ltd(603517) , Angel Yeast Co.Ltd(600298) , Chacha Food Company Limited(002557) , Chongqing Fuling Zhacai Group Co.Ltd(002507) and so on. For the sub sections of the epidemic benefit category, it is suggested to look for targets in the intersection of benefit and low base, such as Shanghai Maling Aquarius Co.Ltd(600073) , Sichuan Teway Food Group Co.Ltd(603317) , etc.
Risk warning: the impact of the epidemic may be repeated; Demand recovery is not strong enough; Food safety issues
