Weekly News Express
Industry news: 1) in 2021, enterprises above Designated Size in the national brewing industry completed a total brewing output of 54.0685 million kiloliters, a year-on-year increase of 3.95%. Among them, the output of Baijiu was 715.63 million liters, down 0.59% from the same period last year. 2) in 2021, the output of Baijiu and beer increased by 3.7% and 14.7% respectively in Sichuan. The output of Baijiu in Guizhou was 34.81 million litres, an increase of 30.5% over the same period.
Company news: 1) Jiugui Liquor Co.Ltd(000799) raise the price of some Xiangquan products; 2) Langjiu shares 55000 tons of sauce wine production capacity will be fully put into operation this year; 3) Wusu Beer will increase the price of 620ml red Wusu liquor from February 1, 2022; 4) From January to October 2021, Jiannanchun Group achieved a total industrial output value of 17.088 billion yuan, a year-on-year increase of 38.18%.
Feedback from key companies this week
Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) : the Spring Festival dynamic sales are in good condition, the collection is fast, and the inventory is maintained at the level of 1-2 months. 1) Product structural upgrading continues. The proportion of Guoyuan series continues to increase. The proportion of revenue of products above special a + category has increased to 65% in 2021, and the volume of V series is expected to accelerate. 2) Regional expansion takes the Yangtze River Delta as the center and speeds up the formation of strategic sectors; Cultivate key markets with key regions of Beijing, Tianjin, Hebei, Guangdong, Jiangxi, Hunan and Hubei as the core. Breakthroughs outside the province follow the regional expansion strategy of “comprehensive planning, key breakthroughs, surrounding radiation and echelon development”. 3) The equity incentive plan is expected to be implemented as soon as possible.
Zhe Jiang Li Zi Yuan Food Co.Ltd(605337) : 1) in terms of product structure, 450ml (60%), 225ml (20%), 280ml (10%), and the sales of new 280ml were about 100 million last year. 2) Channel: at present, East China accounts for the highest proportion, of which Zhejiang has a revenue of 400-500 million, Yunnan and Jiangsu have a revenue of about 200 million respectively, and the markets with a revenue of 100 million include Henan, Anhui, Jiangxi, Shanghai, etc. 3) Marketing: at present, there are more than 500 salespeople, and 80-90 salespeople will be added in 2022, truly entering the national stage. 4) Capacity: Hebi can reach 400000 tons in 2022. Jiangxi and Longyou phase II projects have a total capacity of 600000 tons. 5) The cost of raw materials has a downward trend in 2022.
Vats Liquor Chain Store Management Joint Stock Co.Ltd(300755) : 1) customized liquor accounts for 20% of the revenue. The new golden wine ghost is listed, forming a gold lettered signboard product matrix with jinmaotai, jinhuohua and Jinxi liquor, and the private brand Lotus Series maintains high growth. Among the famous wines, the proportion of maowu’s revenue decreased to about 70% in 2021. 2) In terms of channels, small B and large c seize group purchase resources and customers, steadily expand about 300-400 stores every year, and continue to increase online investment. Huazhi optimization has been well reflected since its operation. At present, online revenue accounts for about 10%. 3) Store: the core area coverage of 700 project reaches 100%, and each area is equipped with 2-3 sales and operation personnel. It is expected to add 200-300 stores every year in the future. Juewei Food Co.Ltd(603517) : at present, the community store has recovered well and is expected to recover to the level of 2019 in 2022. The sales expense rate remained stable, and the net interest rate matched the income growth. 1) The price increase can basically cover the rising cost. Franchisees currently have a gross profit margin of about 40%, which has increased slightly after the price increase. 2) Channel: it is planned to open 1000-1500 stores in 2022. 70% of them are sunken market stores. 3) Capacity: it is expected to take 4-5 years for the peak capacity construction of fixed increase. The new capacity is expected to be put into operation in two years. The capacity release in the past two years is about 10% – 20% per year.
Yanker Shop Food Co.Ltd(002847) : the Spring Festival dynamic sales are in good condition. We expect the growth rate of 2021q4 to be about 20%. The individual’s purchase intention may be reduced, but the overall capacity of leisure snacks is expanding and will gradually even become a rigid demand. 1) In 2021, the main products of the transformation are spicy brine and deep-sea snacks, with 30% – 40% of the rolling updates, and the revenue of new products accounts for 40% – 50%. Accelerate the channel sinking through bulk, and increase the density while sinking; Quantitative loading (accounting for about 20%) continues to increase and sink to the third and fourth tier counties, towns, etc. 2) Channel: the launch plan of 5000 medium islands will be completed in 2021, with a total of 21000 islands, most of which are single islands. There are more than 300 merchants engaged in quantitative installation, and the sinking market and e-commerce mainly expand the core products. 3) The equity incentive target will be adjusted from 2022 to 2023, which can be achieved with great probability through efforts. Ganyuan food: 1) the three new products refer to flavor nuts, new crisp and peanuts. The sales revenue of new products accounts for about 30%. At the end of February, the flavor nuts were launched, with a total of about 10 new products, which are expected to become the focus of development in the future. 2) In 2022, we will increase investment attraction through spring sugar and other products, and use new products to drive the sinking of old products. 3) Price increase: the average price increase of main products in 2021q2 is 10%, which can cover the rising cost of bulk raw materials. The effect of price increase will be reflected in 2022q1-q2. 4) Production capacity: mainly concentrated in Pingxiang factory, covering an area of 300 mu, with a total of 5 workshops. 5) The share repurchase is completed, and equity incentive is expected as soon as possible.
Fu Jian Anjoy Foods Co.Ltd(603345) :1) products: introduce the frozen Kwai quick dish, promote the prefabricated dishes through the national expansion method, give the frozen stock company 30% equity incentive, and determine the performance appraisal goal for the next 3 years. Fast Kwai dish area was built, and three years were invested in 1, 3 and 50 thousand freezer respectively. There will be 15 new products for C-end in 2022. 2) It usually takes a quarter for the price increase terminal transmission. At present, the sales volume picked up in January. 3) Channel: BC should give consideration to all channels and make efforts to determine the first position in the industry in the field of prefabricated dishes as soon as possible. 4) The issuance of the fixed increase project is expected to start in the near future. Jinhui Liquor Co.Ltd(603919) : the dynamic sales of dealers in the Spring Festival are in good condition, and the inventory is relatively at a reasonable level. In January, we mainly sorted out the price and rectified the market order. 1) High grade liquor accounts for more than 65%. Jinhui Laojiao products are mainly aimed at the East China market, and longnanchun is expected to launch in 2022h1. 2) Channel: the income in the province accounts for 85%, and that outside the province accounts for about 15%. Strive to reach 40% in the province. The Great Northwest is expected to accelerate its expansion; East China sales company plans to set up equity incentive and fixed investment plans, and plans to establish 40-50 key markets outside the province to create more than 10 model markets. 3) Fosun energy, open the growth ceiling, and strive to become the top 10 Chinese Baijiu in 2031.
Investment view
We think that the current Baijiu valuation is coming to an end, and is in the stage of stabilization and rebound. Since 2022, 01, 10, we have clearly put forward the layout of Baijiu liquor and proposed active layout. In January 13th and January 16th, the Baijiu liquor has entered the allocation area again. It is suggested that the quality stocks should be actively allocated. At present, compared with the PE valuation under the profit forecast in 2022, the share prices of major liquor enterprises in Maotai have dropped to 39x, Wuliangye Yibin Co.Ltd(000858) 28x, Luzhou Laojiao Co.Ltd(000568) 34x; The valuation of the secondary high-end sector fell sharply, with Fen Liquor valued at 44x, shede 33x, Jiugui Liquor Co.Ltd(000799) 39x, Sichuan Swellfun Co.Ltd(600779) 32x; Local liquor Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) 25X, Anhui Kouzi Distillery Co.Ltd(603589) 18x, yingjiagong 26x, gujinggong 37x, Yanghe 24x, Jinhui Liquor Co.Ltd(603919) 37x.
Since 2022, 01, 17, Moutai has stabilized and rebounded, and the whole Baijiu sector has rebounded. We have clearly pointed out that the current Baijiu adjustment is not a fundamental problem, but also because of the capital and emotional aspects.
Near the Spring Festival, the main trend of liquor enterprises is improving. The East China region is better than the whole country. The spot epidemic situation in Henan and Shaanxi affects the sales of Baijiu. But we think the situation is controllable and the Baijiu Spring Festival is the best. At present, our views remain unchanged, mainly Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Luzhou Laojiao Co.Ltd(000568) , secondary high-end Shede Spirits Co.Ltd(600702) , Jiugui Liquor Co.Ltd(000799) , Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) and local wine Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) , Anhui Kouzi Distillery Co.Ltd(603589) and Anhui Yingjia Distillery Co.Ltd(603198) .
In terms of popular products, the overall demand performance is better than that in December. We believe that the demand is improving marginally. It is suggested to actively pay attention to the channel sales and feedback after the price increase of beer and condiments, especially Chongqing Brewery Co.Ltd(600132) , Tsingtao Brewery Company Limited(600600) , Foshan Haitian Flavouring And Food Company Ltd(603288) , Jonjee Hi-Tech Industrial And Commercial Holding Co.Ltd(600872) , Juewei Food Co.Ltd(603517) , Fu Jian Anjoy Foods Co.Ltd(603345) , Yanker Shop Food Co.Ltd(002847) , Ganyuan Foods Co.Ltd(002991) and Chacha Food Company Limited(002557) .
Risk tips
Epidemic fluctuation risk and macroeconomic fluctuation risk; Recommend the risk that the company’s performance is less than expected and the risk of industry competition; Food safety risks; Risk of changes in industrial policies; Consumption tax or production risk; Raw material price fluctuation risk.
