Under the guidance of the policy of promoting consumption and steady growth, prices are expected to continue to rise: financial Associated Press, January 16, the national development and Reform Commission issued the notice on doing a good job in promoting consumption in the near future. The notice put forward 10 work measures and deployed to do a good job in promoting consumption in the near future, including adjusting measures to local conditions to meet festival consumption demand, improving the quality and upgrading of online consumption Expand county and township consumption. We believe that the previous economic requirement was steady growth, and the total amount is expected to introduce some policies to stimulate the economy; Recently, under the guidance of promoting consumption, consumer prices are expected to continue to rise.
Baijiu week tracking: Kweichow Moutai Co.Ltd(600519) : the January month’s task is basically completed. Starting this week, the new Maotai 1935 is priced at 798 yuan / bottle. At present, the retail guide price is not clear, and it is expected to be announced at the new product press conference on January 18. The shipment is evenly distributed, with about 50 pieces per dealer. It is not clear whether the follow-up will be delivered according to the monthly fixed quota, but if calculated according to 50 pieces per month and 1000 Series liquor dealers, the annual delivery volume of Maotai 1935 through the distribution channel is about 1700 tons (50 * 6 * 12 * 1000 / 2124), plus the annual sales volume of 2000 tons through the direct channel. At present, non-standard liquor (boutique, Chinese zodiac, 15 years) is less than that in previous years, and it is mainly picked up through self operated stores. Maotai, the Chinese zodiac in the year of the tiger, is particularly in short supply. Price performance: the wholesale price of bulk bottles / whole boxes of Feitian increased slightly from 50 yuan to 2800 yuan / 3280 yuan around the week; In the past 15 years, after an increase of 400 yuan last week, it rose another 120 yuan this week; The current retail price of Maotai, a new treasure, is over 6000 yuan, significantly exceeding the guidance price of 4599. Wuliangye Yibin Co.Ltd(000858) : according to the micro wine information, the 32nd meeting of the Standing Committee of the 13th Sichuan Provincial People’s Congress held on January 15 voted to appoint Li Shuguang as vice chairman of the Economic Committee of the Sichuan Provincial People’s Congress. At present, the delivery has been completed for about 2 months. The bid price is stable at about 965 yuan. Luzhou Laojiao Co.Ltd(000568) : on January 13 Luzhou Laojiao Co.Ltd(000568) Tequ Series 60 and 80 products were stopped, which means that the product quota has been implemented in the first quarter of 2022. At present, the delivery has been completed for about 2 months. The price increases from 10 yuan to 920 yuan around the week.
Baijiu: Baijiu is adjusting this week. The market is worried about the consumption tax on the high-end Baijiu headed by Moutai. But we have no definite basis for tracking and finding the following thoughts: 1) the purpose of the collection is not clear, and the limited tax revenue brought to a few wine companies is limited. 2) policy making usually takes into account fairness, usually for the whole industry rather than a company. Baijiu history does not only introduce policies to several companies. We believe that there are the following reasons for the recent adjustment: 1) the market sentiment is relatively fragile recently, and the redemption of some funds has increased this vulnerability; 2) Affected by the epidemic situation in Tianjin, Northwest Henan and other places, the epidemic situation in Xi’an, Zhengzhou, Xuchang and Anyang of Henan has been effectively controlled, and the new cases have decreased significantly. We believe that the outbreak has little impact on economically developed areas such as Beijing, Shanghai, Guangzhou, Jiangsu and Zhejiang, the demand for gifts is not reduced, and the epidemic in Shaanxi and Henan is expected to be controlled years ago. According to the experience of the epidemic, the impact of high-end liquor is the smallest. Meanwhile, the base area of Jiangsu wine and Baijiu is affected by the epidemic. The liquor sector adjustment is a rare opportunity to deploy. At present, the main liquor companies remain basically sound. The good business model of liquor has not changed. The logic of structural upgrading remains unchanged. It is recommended that we stick to the long-term investment value of Baijiu Baijiu’s core assets.
Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) : the goal has been successfully completed and the structure has been continuously improved. 1) The revenue is in line with the expectation and the structure is upgraded rapidly: the company announced this week that it is expected to achieve an operating revenue of 6.3 billion yuan – 6.5 billion yuan in 2021, with a year-on-year increase of 23% – 27%; It is estimated that the net profit attributable to the shareholders of the listed company is 1.9 billion yuan and 2.1 billion yuan, with a year-on-year increase of 21% – 34%; The net profit attributable to the shareholders of the listed company after deducting non recurring profits and losses is expected to be RMB 1.9 billion-2.1 billion, with a year-on-year increase of 22% – 35%, and the performance is basically in line with expectations. Guoyuan series drives the successful completion of the revenue target of RMB 5.9 billion in 2021. The company disclosed that the growth rate of special a + revenue is expected to exceed 35%, accounting for about 65% of the company’s revenue, which is significantly higher than 60% in 2020. The speed of structural upgrading is better than our previous expectation. We expect that the proportion of special a + revenue of the company is expected to reach 70% in 2023. 2) The new four open channels performed well, boosting the rapid growth of performance this year. After the launch of the new Sikai, it performed well. 21q3 still maintained a benign growth under the influence of the epidemic, verified the rising period of brand potential energy, narrowed the price difference of 21q4 channel slightly, and continued to maintain the strength of dynamic sales; V series continues to be high-end, and the elegant Maotai flavor of V9 is more suitable for Jiangsu taste. In the region, it focuses on the main markets such as Nanjing, Huai’an and Yancheng. V3 card upgrades the price band and has a large channel layout space. According to the company’s announcement, the share repurchase to be used for equity incentive has been completed by the end of November 2021, taking a solid step in promoting equity incentive, which is expected to drive the implementation of incentive. In the medium and long term, we believe that the company is still in the period of rising brand potential, and its share in the sub high-end price belt in the province is becoming more and more stable. We are optimistic that the company will achieve rapid growth through intensive cultivation in the province and steady expansion outside the province under the guidance of the revenue target of 10 billion in the “14th five year plan”.
Tsingtao Brewery Company Limited(600600) : the performance meets expectations and short-term cost pressure appears. The company issued a performance pre increase announcement. It is estimated that the net profit attributable to the shareholders of the listed company in 2021 will be about RMB 3.15 billion, with a year-on-year increase of 43%. If excluding the 436 million yuan confirmed by the compensation for non operating land expropriation, the operating net profit attributable to the parent company will be about RMB 2.714 billion, with a year-on-year increase of 23%; In 2021, the net profit attributable to the parent company after non deduction was about RMB 2.194 billion, with a year-on-year increase of 21%. The net profit attributable to the parent company in 2021q4 is about -897 million yuan, and that in 2020q4 is -777 million yuan in the same period; The net profit attributable to the parent company after deducting non-profit in 2021q4 is about -1.022 billion yuan, and that in 2020q4 is -862 million yuan in the same period. (1) It is expected that short-term sales are under pressure and adhere to the high-end logic. Since the middle and late October of 2021, the epidemic situation has been repeated throughout the country, resulting in a great impact on the current drinking channels of the beer industry. According to the data of the National Bureau of statistics, the catering revenue in October and November 2021 increased by 2.0% and – 2.7% respectively year-on-year. The epidemic situation was still serious in December, and the epidemic broke out successively in Shaanxi, Henan and other places, which are Tsingtao Brewery Company Limited(600600) important markets along the Yellow River. Due to the repeated impact of the epidemic, the sales volume of 2021q4 Tsingtao Brewery Company Limited(600600) is under pressure year-on-year, and we expect it to show a slight downward trend. However, the high-end trend continues. We expect that the price per ton of wine of 2021q4 company will still maintain a steady upward trend. We continue to emphasize that we should rationally look at the impact of repeated epidemics on short-term sales, and adhere to the logic of medium – and long-term high-end beer to promote profitability. (2) The loss in 2021q4 expanded, mainly due to the increase of cost + the decline of sales volume. In 2021q4, the loss margin of the company’s net profit attributable to the parent (operating caliber) and net profit attributable to the parent after deduction of non profits increased year-on-year, mainly due to: first, the rise of costs. 2021h1 company still has some low-priced raw materials locked in the early stage. 2021q3 began to use a large number of newly purchased high-priced raw materials, especially packaging materials, which further reflected the pressure of cost rise in the fourth quarter; Second, the scale effect is weakened, and the decline in sales leads to an increase in fixed cost dilution.
Beer accounts for a high proportion of manufacturing expenses in the food and beverage industry, Tsingtao Brewery Company Limited(600600) nearly 20%. Affected by the epidemic, the company’s sales volume was under pressure in the fourth quarter, resulting in further weakening the dilution effect of fixed cost per ton of wine. Third, considering the company’s continuous staff reduction and efficiency increase, it is expected that expenses such as employee placement and asset impairment will still be accrued in the fourth quarter.
Prefabricated dishes, new blue ocean, Spring Festival prosperity is up. 1) The market space of prefabricated vegetables is large, and the pattern has not been stable. In recent years, the prefabricated vegetable market has maintained an overall growth rate of 20% – 30%, and the growth rate of some small enterprises may reach 100%. The industry threshold is not high, and traditional enterprises have the first mover advantage. Suzhou Weizhixiang Food Co.Ltd(605089) , haodeli and other traditional prefabricated vegetable enterprises have sold more than 100 million, and Jiangsu, Zhejiang and Shanghai are their main markets. 2) The proportion of end B is large, the growth rate is fast, and there is still room for permeability. The C-end of prefabricated dishes accounts for about 20%, with an annual growth rate of about 10%; B-end accounts for more than 80% and has maintained a growth of 30% – 50% in recent years. The industry growth in the next three years may be driven by b-end. The permeability of b-end in East China is high, up to 40% – 50%, and that of some enterprises can reach 100%. The gross profit margin of end B is about 10%, and the product advantages and channel management may increase the gross profit margin to 20%. 3) The Spring Festival stock is in good condition, and the market has warmed up. 10. In November, the epidemic situation in Jiangsu, Zhejiang and Shanghai was frequent, affecting the willingness of channels to prepare goods. In the second half of December, the market began to pick up, the quantity at end C began to rise, and the delivery at end B will also be made in advance. In addition to 10-15 days of safety stock, many dealers have stable new year’s Eve orders from downstream customers in advance.
Toly Bread Co.Ltd(603866) : the performance of 21q4 has stabilized and the national capacity layout has been continuously improved. The company released the performance express for 2021. The year-on-year growth rate of Q4 revenue was the same as that of Q3. Q4 price increase + continuous promotion of new products are expected to continue to improve in the future. The company achieved revenue of RMB 1.68 billion in 21q4, yoy + 5.57%; The net profit attributable to the parent company was 195 million yuan, yoy-0.81%; Deduct non net profit of RMB 191 million, yoy + 1.41%. The year-on-year growth rate of Q4 revenue is the same as that of Q3. We believe that this is mainly related to the recurrence of Q4 epidemic. The company has raised the price of some products in Q4, accelerated the promotion of new products, and expected the improvement of revenue growth in the future. Epidemic relief and Social Security + low return rate and less promotion, resulting in high profit base + rising raw material prices, resulting in pressure on the company’s profit side. The company’s Q4 net profit attributable to the parent company was 11.62%, with a year-on-year ratio of -0.74pct and a month on month ratio of + 0.08pct. The main reasons include: 1) in the same period last year, affected by the national phased social security reduction policy, the company’s labor cost was lower than that in the current period; 2) The price rise of some raw materials has led to an increase in product costs; ③ Affected by the epidemic situation in the same period last year, there were relatively few promotional activities, and the discount rate in this period was higher than that in the same period last year. With the price increase at the end of the year, we expect the company’s profitability to continue to improve month on month.
Recommended combination in January: Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Chongqing Fuling Zhacai Group Co.Ltd(002507) , Juewei Food Co.Ltd(603517) , Luzhou Laojiao Co.Ltd(000568) . The combination logic has not been changed, so we continue to maintain the combination recommended last month. In January 2022, the recommended portfolio and its rise and fall were Juewei Food Co.Ltd(603517) (- 13.84%), Chongqing Fuling Zhacai Group Co.Ltd(002507) (- 11.24%), Luzhou Laojiao Co.Ltd(000568) (- 10.53%), Kweichow Moutai Co.Ltd(600519) (- 8.93%) and Wuliangye Yibin Co.Ltd(000858) (- 6.94%) respectively, and the portfolio yield was – 10.30%. Over the same period, the Shanghai Composite Index fell 3.26%, and the portfolio fell 7.04% higher than the Shanghai Composite Index.
Investment strategy: the layout is at the right time. Our main recommendation focuses on the following directions: (1) strong HENGQIANG’s steady income companies: recommend Maotai, Wuliangye Yibin Co.Ltd(000858) , Luzhou Laojiao Co.Ltd(000568) , China Resources beer, Tsingtao Brewery Company Limited(600600) , Foshan Haitian Flavouring And Food Company Ltd(603288) , Chongqing Brewery Co.Ltd(600132) , Chacha Food Company Limited(002557) , Chenguang Biotech Group Co.Ltd(300138) and other sub industry leaders; (2) high growth companies with fast expansion in the industry: recommend prefabricated vegetables, quick frozen industry, sub high end Baijiu, cheese industry, Fu Jian Anjoy Foods Co.Ltd(603345) , Apple Flavor & Fragrance Group Co.Ltd(603020) , Ligao Foods Co.Ltd(300973) , etc. (3) Companies with cycle reversal and dilemma reversal: epidemic cycle recovery, recommended Juewei Food Co.Ltd(603517) , Chongqing Fuling Zhacai Group Co.Ltd(002507) , Sichuan Teway Food Group Co.Ltd(603317) , Haidilao, leading oil enterprises, leading meat products, etc. it is recommended to pay attention to Yihai International; It is expected to accelerate after adjustment. It is recommended to pay attention to Anhui Yingjia Distillery Co.Ltd(603198) , Shede Spirits Co.Ltd(600702) and Zhou Heiya. For detailed recommendation logic, see strategy for 2022: price recovery is expected to accelerate the release of performance.
Risk tips: risk of global and Chinese epidemic spread, risk of large outflow of foreign capital, sauce and wine inventory and policy.
