January 10th ~1 14, 5 trading days, the Shanghai and Shenzhen 300 index fell 1.98%, the food and beverage sector fell 4.40%, the Baijiu sector fell more than the Shanghai and Shenzhen 300, or 4.71%. Specifically, the increase of Tonghua Grape Wine Co.Ltd(600365) (+ 20.71%) and Vats Liquor Chain Store Management Joint Stock Co.Ltd(300755) (+ 4.54%) in the beverage sector this week was relatively large, and the decrease of Shanghai Bairun Investment Holding Group Co.Ltd(002568) (- 12.82%) and Beijing Shunxin Agriculture Co.Ltd(000860) (- 10.02%) was relatively large; This week, the food sector Haixin Foods Co.Ltd(002702) (+ 32.58%) and Shandong Delisi Food Co.Ltd(002330) (+ 32.44%) were the top gainers, while Ganyuan Foods Co.Ltd(002991) (- 8.76%) and Jonjee Hi-Tech Industrial And Commercial Holding Co.Ltd(600872) (- 8.43%) were the bottom gainers.
This week’s view
[Baijiu sector]: facing the good certainty and fearless short-term adjustment.
Plate review: under the influence of good mood, the sector ushered in a major adjustment
January 10th ~1 14, 5 trading days, the Shanghai and Shenzhen 300 index fell 1.98%, the food and beverage sector fell 4.40%, the Baijiu sector fell more than the Shanghai and Shenzhen 300, or 4.71%. Specific Baijiu sector: gold seeds (-4.49%), Hebei Hengshui Laobaigan Liquor Co.Ltd(600559) (-4,81%), Wuliangye Yibin Co.Ltd(000858) (-5.60%), Luzhou Laojiao Co.Ltd(000568) (-6.03%) decline smaller, the overall adjustment of the whole sector, we believe or because:
1) the recent increase in Baijiu consumption in some provinces has caused the market to worry about the weakening of the pre – campaign sales in the region (which affects subsequent replenishment).
2) consumption tax appears in the spotlight again, or causes a significant outflow of policy sensitive funds;
3) under the trend of higher U.S. bond yields and the enhanced expectation of interest rate increase by the Federal Reserve, the overvalued sector / target may be restrained to some extent.
Looking back on the three major adjustments in the past 21 years (after the Spring Festival, July and October), the adjustments triggered by the emotional side have rebounded significantly after being verified with good certainty, and there is a structural excess return market; Based on the strong certainty of 22q1’s good start (at the end of 21, the winery’s goods control + payment rhythm is faster than that in previous years, laying the foundation for a good start. At present, the payment before the festival is coming to an end, and the good start is strong, basically facing the good trend) + the recent sector adjustments are mostly triggered by the emotional / capital level, and we believe that the recent adjustment is a good opportunity for additional allocation.
Jiangsu and Shandong Baijiu Market Research Update
Jiangsu market: Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) spring festival goods preparation is smooth. 1) Payment proportion: the overall payment proportion in the province is expected to be more than 35%, and 40% – 50% in some regions; 2) Payment rhythm: faster than the Spring Festival in the 21st year; 3) Price rating: the transaction price of Sikai in southern Jiangsu is 460-480 yuan, and the transaction price of counter opening terminal is 290-300 yuan.
Shandong market: Guojiao 1573 hit the money smoothly. 1) 22q1 national cellar collection: 45% of the annual tasks, no mandatory payment, and the tasks given by the platform factory will generally be completed; 2) Performance &22 target of Guojiao 21: the collection in 2021 is expected to be less than 800 million; In 2022, the payment collection is expected to reach 1 billion.
Dynamic update of individual stocks: Vats Liquor Chain Store Management Joint Stock Co.Ltd(300755) 21 year performance is in line with expectations, and it is expected to increase high in 22 years
[event] in 2021, the company realized a total operating revenue of RMB 7.430 ~ 7.600 billion, with a year-on-year increase of 50.36% – 53.80%; The net profit attributable to the parent company was 674 ~ 691 million yuan, with a year-on-year increase of 80.61% – 85.16%. 21q4 achieved a total operating revenue of 1.458 ~ 1.628 billion yuan, a year-on-year increase of 15.66% ~ 29.14%; The net profit attributable to the parent company was 93 ~ 110 million yuan, with a year-on-year increase of 76.2% ~ 108.4%.
[comment] we believe that the high-quality development of the company’s performance in the past 21 years is mainly due to:
1) channel: brand strength improvement + store quantity and quality improvement ( Vats Liquor Chain Store Management Joint Stock Co.Ltd(300755) it is expected to open 300 high-quality stores every year + quality improvement of existing stores after the implementation of 711 new regulations) + continuous force of group purchase channel = laying the foundation for scale expansion.
2) standard product: under the background of continuous expansion of high-end liquor and sub high-end liquor, there is a strong demand for famous liquor and the guarantee scale
3) non standard products: with the enhanced drainage effect of standard products, the dividend released after the price increase of Diaoyutai (total distribution products) in June + the volume and price of lotus wine (established a sales company with the winery) rose in short supply + the increase of non-standard products of famous wine (new golden drunkard, Jinxi wine and other categories) = the profit is expected to achieve higher than expected growth
We believe that the higher than expected profit growth in 22 years is mainly due to: 1) accelerating the volume of standard products and increasing the price of famous wines, which is expected to thicken the channel profit; 2) The overall volume and price of non-standard products have risen simultaneously (Diaoyutai price rise + lotus volume and price rise + new non-standard products): 3) the dividend of channel reform has been released, and the group purchase channel has accelerated while the quality of stores has increased.
Data update: the Kweichow Moutai Co.Ltd(600519) rating performance this week is stable and the overall inventory performance is healthy
Kweichow Moutai Co.Ltd(600519) : the wholesale price of Feitian bulk bottle is about 2750-2900 yuan, and the wholesale price of the whole box is about 3300-3400 yuan. Recently, some dealers have paid until February, and it is expected to complete about 25% of the annual quota (from January to February). The recent price increase of series wine and non-standard wine + the launch of Chinese Zodiac wine earlier than last year + the dealers can implement the unplanned quota of non-standard products will contribute to the ton price in the first quarter. In addition, Maotai 1935 is expected to hold a press conference on January 18 (retail price is about 1200 yuan); Wuliangye Yibin Co.Ltd(000858) : the wholesale price this week is stable at 970-980 yuan, and the wholesale price of classic clothes is about 1700-1800 yuan. Since the price increase of Wuliangye Yibin Co.Ltd(000858) , contracts are being signed in the coming year. It is expected that 20% of the payment will be collected before 1218 and 40% before the Spring Festival; Luzhou Laojiao Co.Ltd(000568) : the rated price is about 900-910 yuan. The payment collection of Guojiao in 21 years has been completed (+ 35%), and the growth target of Guojiao next year is 30%. The overall performance of the rated price is stable.
Investment advice: fearless of short-term fluctuations, firmly optimistic about 22q1’s good start
We believe that the current sector fluctuation is mainly due to the high rise in the early stage + the fluctuation caused by the change of macro indicators / mood (News), which is basically good and has strong certainty: wineries start payment earlier + the goal of some wine enterprises is higher than that in previous years + the inventory of dealers is generally low + the approval price is stable and positive under the tide of price increase + channel confidence, and actively lay the foundation for a good start in 2022. It is suggested to add it on bargain hunting. [to sum up], the current position is dominated by Kweichow Moutai Co.Ltd(600519) , Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , Wuliangye Yibin Co.Ltd(000858) , Shede Spirits Co.Ltd(600702) and Vats Liquor Chain Store Management Joint Stock Co.Ltd(300755) of “low value and high growth”.
II. [food sector]: the prefabricated vegetable sector rose sharply, adding Zhongyin Babi Food Co.Ltd(605338)
Plate review: the overall food sector fell slightly this week
Plate growth: food processing sector fell 2.24%, of which seasoning sector fell 2.57%, dairy sector fell 2.40%, meat sector fell 0.92%.
In terms of the rise and fall of individual stocks: Haixin Foods Co.Ltd(002702) (+ 32.58%), Shandong Delisi Food Co.Ltd(002330) (+ 32.44%) and Shandong Huifa Foodstuff Co.Ltd(603536) (+ 18.35%) were among the top three in the sector. In the meat products sector, Shandong Delisi Food Co.Ltd(002330) (+ 32.44%), Springsnow Food Group Co.Ltd(605567) (+ 19.05%) and Jinzi Ham Co.Ltd(002515) (+ 7.95%) led the gains; Seasoning sector Zhongjing Food Co.Ltd(300908) (+ 2.62%), Qingdao Richen Food Co.Ltd(603755) (+ 1.51%) and Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) (+ 0.66%) led the gains; In the dairy sector, Henan Kedi Dairy Co.Ltd(002770) (+ 0.34%), Zhejiang Yiming Food Co.Ltd(605179) (+ 0.26%) and Beingmate Co.Ltd(002570) (+ 0.17%) rose slightly; In the comprehensive food sector, Haixin Foods Co.Ltd(002702) (+ 32.58%), Shandong Huifa Foodstuff Co.Ltd(603536) (+ 18.35%) and Suzhou Weizhixiang Food Co.Ltd(605089) (+ 8.98%) led the gains.
Updated this week: Zhongyin Babi Food Co.Ltd(605338) key recommendations, Sirio Pharma Co.Ltd(300791) depth report
Under the long-term logic, there is a vast space for trillion prefabricated vegetables, and leaders in all links of the industrial chain have cut in one after another. According to the data of iimediaresearch (AI media consulting), the scale of China’s Prefabricated vegetable market is estimated to be 345.9 billion yuan in 2021. It is cautiously estimated that the industry scale CAGR will be about 20% in the next five years. In the short term, driven by the repeated epidemic situation and the preparation of goods for the Spring Festival, the long-term and short-term logical resonance has driven the collective outbreak of this week’s Prefabricated vegetable track. We are firmly optimistic about the long-term growth of the prefabricated vegetable track. We prefer companies with outstanding card position advantages in the sub track + sufficient capacity planning. We suggest paying attention to Fu Jian Anjoy Foods Co.Ltd(603345) , Suzhou Weizhixiang Food Co.Ltd(605089) , Zhengzhou Qianweiyangchu Food Co.Ltd(001215) .
Highlights: Zhongyin Babi Food Co.Ltd(605338) : store quantity + store quality + group meal business + cost side performance exceeded expectations
At present, we believe that the market has significantly underestimated Barbie’s performance in 22 years, with the following poor expectations:
1) exceed the expectation by 1: the single store revenue will rise to the level of 18 years in 22 years.
The market believes that the takeout business that promotes the positive growth of single store revenue this year does not have the ability to keep the positive growth of single store revenue this year and next year;
We believe that the price increase of non core items in the early stage may have limited contribution to the revenue of Barbie stores; However, in addition to the cooperation between Bobby and hungry Yao, the proportion of stores that have cooperated with meituan recently + carry out takeout is increasing from 50% to more + many new Chinese and dinner products are added. The growth rate of single store revenue in 22 years is expected to remain at the level of 18 years at least.
2) higher than expected 2: under the endogenous extension of stores in 22 years, the net increase is expected to exceed 1300
The market believes that: in the past 22 years, the company’s stores will continue to have a net increase of less than 300 stores per year;
We believe that the net increase of stores in 21 years has reached the historical peak (about 500 stores), and the extension in 22 years (22h1 is expected to have 600-800 stores) + endogenous (the exhibition of stores in East China with strong brand strength will also be accelerated after the Nanjing factory is put into operation) = it is expected to have a net increase of more than 1300 stores, so as to achieve more than expected development.
3) exceeding expectations: the group meal business income exceeded expectations
The market believes that the development of group meal business is relatively stable;
We believe that the group meal business of the company will achieve more than expected development in 22 years; 1) The accelerated implementation of Nanjing factory is conducive to the expansion of group meal business in East China. At the same time, North China will continue to accelerate the development of group meal business; 2) In the 21st year, the company increased the staffing of the group meal business department, laying the foundation for the expansion of the group meal business in the 22nd year. In addition, prefabricated products such as lock and fresh packaging may offset the potential impact of some epidemic situations on stores.
4) higher than expected 4: under strong cost control, 21q3 is the bottom of gross profit margin, and the gross profit margin is expected to rise from 21q4
The market believes that the profit of the company in 21 years is lower than expected due to the pressure on the cost side, and the net profit in 22 years is uncertain due to the cost side.
We believe that the cost side: the profit of 21q2 / 21q3 company is slightly lower than expected, which is related to the fact that the upward pressure of cost is higher than the cost dividend brought by the downward price of pig / the price rise of bulk commodities / the launch of Songjiang new production capacity in the middle of the year (with the impact of fixed depreciation). In the future, the company may launch corresponding cost hedging measures for bulk commodities. At the same time, as the production capacity climbs, 21q4 the cost side may be improved; Expense side: in order to open the 2C channel, 21q1 company put higher marketing expenses under pressure on the profit and run side (mainly by increasing the investment in advertising marketing such as focus ladder media and short video, with a sales cost of RMB 30 million). It is expected that the company’s expenses will remain stable in the next 22 years.
Sirio Pharma Co.Ltd(300791) : cdmo leader in nutrition and health food, expanding production and improving efficiency, serving global brands
Company: cdmo leader in nutrition and health food.
(1) the company’s products cover multiple dosage forms and multiple functional platforms to meet different people in the whole life cycle, from infants and children to the middle-aged and elderly. In China, the company has achieved extensive customer coverage and actively supported some fast-growing cutting-edge brands. The company’s business expansion in Europe is in the charge of the European marketing team, and the products are jointly supplied by Germany’s ayanda and China’s production base. In North America, the market is developed through the North American marketing team, and the products are supplied by the Chinese production base. (2) The ownership structure is stable and the employee incentive is sufficient. (3) The production capacity has been gradually improved, and the revenue has grown steadily, with a revenue CAGR of about 20% in the past five years. Traditional dosage forms are stable and innovative dosage forms are effective. The overall profitability increased steadily, and the gross profit margin of tablets and nutritional soft candy was high.
Industry: the C-end market has a broad space, and the b-end enterprises benefit fully.
(1) in terms of scale, health food is growing steadily and functional food has a broad space. (2) The two major trends of the industry are clear. Aging increases demand and the consumption structure is younger. (3) From the perspective of pattern, the downstream pattern is scattered, and b-end enterprises are expected to fully benefit.
Core competitiveness: four advantages, industry-leading and iterative strengthening.
(1) good industry influence: win-win contract production mode and endorsement of well-known customers’ brands.
(2) excellent application innovation: both internal and external repair can improve R & D, and the technology transformation channel is smooth.
(3) efficient operation and organization: large-scale supply of multiple dosage forms and global supply chain layout.
(4) professional b-end marketing power: organizational structure innovation and efficiency improvement can be expected.
Profit forecast: the net profit attributable to the parent company is expected to be 260 / 355 / 464 million yuan in 21-23 years, giving the company 30 times PE in 22 years, corresponding to the target market value of 10.7 billion yuan.
Investment suggestion: maintain the previous investment logic, and it is recommended to continue to pay attention to the subject of marginal performance improvement
In view of the current performance of the food sector, we recommend three main investment lines.
1) main line of investment in food and catering Industrialization: it is recommended to continue to pay attention to: Fu Jian Anjoy Foods Co.Ltd(603345) , Ligao Foods Co.Ltd(300973) , Zhengzhou Qianweiyangchu Food Co.Ltd(001215) , Apple Flavor & Fragrance Group Co.Ltd(603020) , Shanghai Hi-Road Food Technology Co.Ltd(300915) , Namchow Food Group( Shanghai) Co.Ltd(605339) . 2) The valuation adjustment has been gradually put in place and new businesses have increased α， It is recommended to pay continuous attention to: Shanghai Milkground Food Tech Co.Ltd(600882) , Qianhe Condiment And Food Co.Ltd(603027) ; 3) Investment target with price increase logic.
This week’s food sector combination: Shanghai Milkground Food Tech Co.Ltd(600882) , Zhongyin Babi Food Co.Ltd(605338) , Jiajia Food Group Co.Ltd(002650) .
Risk warning: the impact of epidemic situation exceeds expectations; Baijiu sales recovered less than expected. Food safety risks.
