Key investment points:
Important announcements of listed companies
Eastroc Beverage (Group) Co.Ltd(605499) : the annual performance forecast for 2021 was issued, and the net profit attributable to the parent company increased by 41.61% to 53.93% in advance
Tsingtao Brewery Company Limited(600600) : the annual performance forecast for 2021 was issued, and the net profit attributable to the parent company increased by 43% in advance
Shede Spirits Co.Ltd(600702) : release the annual performance forecast for 2021, and the net profit attributable to the parent company is increased by 112% to 121% in advance
Industry key data tracking
In terms of dairy products, the price of fresh milk fluctuated at a high level. As of January 12, 2022, the average price of fresh milk in the main producing areas was 4.27 yuan / kg, slightly lower month on month, with a year-on-year increase of 0.70%, and the year-on-year growth rate continued to slow down. In terms of meat products, the prices of piglets, live pigs and pork began to bottom up in May 2019 and continued the rising trend. The prices began to decline significantly around November last year, and the downward trend of pork prices was established in the medium term. At present, pork prices are close to the low point and have rebounded slightly recently. As of January 14, 2022, the prices of piglets, live pigs and pork in 22 provinces in China have reached 27.36 yuan / kg, 14.48 yuan / kg and 23.18 yuan / kg respectively, with year-on-year changes of – 73.54%, – 48.03% and – 47.58% respectively.
Investment advice
This week, the food and beverage sector continued to decline. Since the beginning of the year, the sector has been adjusted mainly for the following reasons: first, it has been continuously affected by the rumors of consumption tax; Second, the price increase expectation of leading liquor enterprises failed; Third, the market is worried about Baijiu selling in the busy season. Fourth, from the perspective of prolonging the time cycle, the sector valuation has not been significantly digested. From a fundamental point of view, the industry has not changed substantially. It is recommended to select stocks with reasonable valuation and growth attributes at the current time point. From monthly data, we think that Baijiu is still in operation cycle and the price cycle of high-end Baijiu will be extended due to price control. And the fine products of public products have already opened the price raising cycle. We need to pay close attention to the market acceptance after the price increase. On the sector side, it is still recommended to focus on the more high-end Baijiu, and change the space with time, and pay attention to the secondary high-end market. In terms of mass products, the upstream cost pressure may be relieved in the middle of next year. At present, the beer sector still has a relatively better competition pattern and smoother pressure transmission, followed by dairy products. The rise of raw milk in the upstream of dairy products has tended to ease. On the basis of good demand and early price increase, the performance is expected to accelerate the release. It is recommended to pay active attention. To sum up, we give the industry a “optimistic” investment rating and continue to recommend Wuliangye Yibin Co.Ltd(000858) (000858), Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) (603369), Angel Yeast Co.Ltd(600298) (600298), Chongqing Brewery Co.Ltd(600132) (600132) and Inner Mongolia Yili Industrial Group Co.Ltd(600887) (600887).
Risk tips
Macroeconomic downside risk; Risk of major food safety events.
