This week’s view
[Baijiu]: Baijiu sector gradually warming up, dynamic sales as an important observation index.
Plate review: this week, the feedback of regional wine sales was good, which promoted the rise of regional wine sentiment
January 17th ~1 21, 5 trading days, Shanghai and Shenzhen 300 index rose 1.11%, food and beverage sector rose 3.81%, Baijiu sector rose more than Shanghai and Shenzhen 300, or 5.22%. The specific Baijiu sector view: Anhui Yingjia Distillery Co.Ltd(603198) (+13.4%), Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) (+7.58%), Anhui Kouzi Distillery Co.Ltd(603589) (+7.53%), Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) (+7.44%) rose more than 7%, sector warming.
First, the market factors of rising pressure: first, the market worried that the Baijiu Spring Festival sales will be affected by the epidemic situation in the near future, and then affect the replenishment of 22Q channels, thereby affecting the performance of 22Q2 report end (part of the epidemic area area feedback channel is weak). Second, the time point when Maotai proposed the factory price may not be as expected; Third, the consumption tax is heating up and the market is worried; Fourth, the increase in US bond yields has increased market concerns about foreign capital outflow. In conclusion, it is more the weakening trend caused by the game on the emotional side and capital side.
Recently, the Anhui and Jiangsu wine sector has been warming up, mainly because: under the background that there is no epidemic outbreak in Anhui and Jiangsu + the main revenue of wine in major regions comes from the province, recent channel research has intensively fed back that the dynamic sales performance of wine in Anhui and other regions is better than that in the same period last year, the overall dynamic sales performance is normal and the payment collection is smooth; During the Spring Festival, the population mobility is expected to increase compared with the same period last year. The impact of the epidemic is limited and the channels are optimistic, which boosted market confidence. We believe that: by reviewing the past 21 years, we believe that the adjustment triggered by the emotional side has achieved a significant recovery after the basic orientation is verified with good certainty (22q1 has strong fundamental certainty), and there is a structural excess return market. Therefore, the recent adjustment is a good opportunity for matching. Next week is the last week of the Spring Festival intensive dynamic sales. At present, the overall dynamic sales performance is stable, and we will continue to pay more attention.
Henan and Anhui Baijiu Market Research Update
Henan market: terminal movable sales are affected by the epidemic, and subsequent compensatory consumption may be supplemented. The terminal retail price is about 1050, the first batch price is about 970 in other places, and 950-960 in Henan. Wuliangye Yibin Co.Ltd(000858) payment: 1) the current payment completion rate is 40%. Generally, the target from January to February before the Spring Festival is 25-30%, which is higher than that in previous years. Wuliangye Yibin Co.Ltd(000858) delivery: the goods are distributed monthly, and the goods have been delivered in February.
Anhui market: compared with the same period last year, the dynamic sales have increased significantly, and the channel confidence is sufficient. Spring Festival payment in Anhui Province: 1) Anhui Gujing Distillery Company Limited(000596) : the pace of payment this year is ahead of schedule. Now Gujing has paid more than 42%, faster than in previous years; 2) Anhui Yingjia Distillery Co.Ltd(603198) : at present, it is an important stage of the second batch of additions. This year, the payment and delivery rhythm of Dongzang is faster than that of previous years; 3) Anhui Kouzi Distillery Co.Ltd(603589) : the payment will be made after the 10th. The overall dynamic sales are good. Spring Festival stock and dynamic sales in Anhui Province: before the Spring Festival this year, it will be much more prosperous than last year, because last year was a low base and the epidemic prevention policy was relatively relaxed.
New recommendation: Anhui Yingjia Distillery Co.Ltd(603198) – the potential energy of Dongzang reservoir is continuously released, the dynamic pin performance is excellent, or it is the target with the largest expected difference at the beginning
[recent research feedback]
1) smooth payment: in January, the company expects that the payment collection is close to the volume (payment and delivery) in the first quarter of last year. Considering the low base of 21q1 and calculated according to the historical delivery rhythm, the profit of 22q1 is expected to reach 700 million, which is the target with the largest expected difference at present!
2) excellent dynamic sales: benefiting from the continuous release of Dongzang series brands and high channel profits, more and more high-end liquor dealers join in, and the dynamic sales performance of main sales areas such as Hefei, Lu’an and some northern Anhui is better than that in previous years.
3) the product structure has moved up steadily: the order of growth rate is dong20 > 9 > 16 > 6. At present, the revenue of Dongzang series accounts for 35% – 40%, and the target Dongzang series accounts for more than 50% in three to five years.
[recommendation logic]
Highlights: the Anhui real estate Baijiu, a powerful potential real estate liquor leader in the mainstream consumer promotion and price belt, is expected to continue to exceed expectations.
[more than expected drivers]
1) the consumption upgrading of Hui liquor exceeded the market expectation, the sub high-end price band was continuously widened, and the market concentration continued to increase;
2) in the short term, the strong rise of Dongzang series + channel thrust to consumption pull + group purchase (focusing on medium and high priced wines) has continued to increase, helping 21q3 drive profit performance exceed expectations;
3) in the medium and long term, the Dongzang series with strong brand power + high channel profit + card position mainstream price band and low consumer loyalty + strong channel strength has been listed for 5 years, with a volume of 1 billion (revenue accounting for about 30%). The Dongzang series that is expected to double its performance this year will lead the company’s annual performance to exceed expectations, In the next 3-5 years, Dongzang series may achieve more than expected development (accounting for more than 50% of revenue).
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 loose bottles 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 release of new 1935 + 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 of the first quarter; 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 estimated that the payment will be collected by 20% before 1218 and 40% before the Spring Festival. At present, the overall payment collection progress is about 30% +; Luzhou Laojiao Co.Ltd(000568) : the rated price is about 920-930 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 insist that the current sector is still mainly affected by the fluctuation caused by the high rise in the early stage + changes in macro indicators / emotions (News), and has strong certainty from the basic aspect: wineries start payment earlier + some wine enterprises have a good start compared with previous years + dealers’ inventory 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, Suggest bargain hunting and matching. [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) , * Anhui Yingjia Distillery Co.Ltd(603198) and Vats Liquor Chain Store Management Joint Stock Co.Ltd(300755) of “high growth of undervalued value”.
II. [food sector]: the catering data in December is still declining, focusing on the opportunities of subdivided sectors
Plate review: the food sector fell as a whole this week
Plate growth: food processing sector fell 2.95%, of which seasoning sector rose 1.43%, dairy sector rose 2.31%, meat sector rose 1.62%.
The rise and fall of individual stocks: Shandong Delisi Food Co.Ltd(002330) (+ 31.83%), Royal Group Co.Ltd(002329) (+ 18.4%) and Shanghai Laiyifen Co.Ltd(603777) (+ 12.59%) were among the top three in the sector. In the meat products sector, Shandong Delisi Food Co.Ltd(002330) (+ 31.83%) and Henan Shuanghui Investment & Development Co.Ltd(000895) (+ 4.28%) led the rise, while Zhejiang Huatong Meat Products Co.Ltd(002840) (+ 0.45%) rose slightly; Seasoning sector Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) (+ 6.14%) and Foshan Haitian Flavouring And Food Company Ltd(603288) (+ 3.96%) led the gains; In the dairy sector, Royal Group Co.Ltd(002329) (+ 18.4%), Beijing Sanyuan Foods Co.Ltd(600429) (+ 6.73%), Beingmate Co.Ltd(002570) (+ 3.21%) led the rise; In the comprehensive food sector, Shanghai Laiyifen Co.Ltd(603777) (+ 12.59%), Chacha Food Company Limited(002557) (+ 5.87%) and Cabio Biotech (Wuhan) Co.Ltd(688089) (+ 1.14%) led the gains.
Update this week: social zero data was released in December, Ligao Foods Co.Ltd(300973) performance forecast comments, food data is still recovering, waiting for demand to pick up, and pay attention to the opportunities of subdivided sectors.
1) the catering data in December was still declining, but the year-on-year decline was slightly narrowed compared with the previous month, and the retail sales of grain, oil and food continued to grow year-on-year. In December, the social zero data was released. The social zero data increased by 1.7% year-on-year and decreased month on month. From the perspective of the food and beverage industry, the catering revenue decreased by 2.2% year-on-year in December, slightly narrowed compared with the growth rate of – 2.7% in November; From January to December, catering increased by 18.6% year-on-year. From the perspective of commodity retail, the retail sales of grain, oil and food increased by 11.3% year-on-year in December, slightly lower than the growth rate of 14.8% in November; From January to December, the retail sales of grain, oil and food increased by 10.8% year-on-year.
2) we believe that the current demand is still picking up and pay attention to the opportunities of subdivided sectors. The catering data continued to decline in December. We believe that it is related to the impact of policy requirements such as the emergence of scattered outbreaks and local Chinese New Year celebrations; The retail sales of grain, oil and food are less affected due to the rigid demand. On the whole, demand and terminal data are still recovering, but there are still opportunities in segments, such as condiments, leisure snacks and other segments. With the subsequent price increase effect and the weakening impact of channel reform, the performance is expected to boost; The performance of high-quality leading companies such as dairy products is relatively stable and has certain anti risk ability; The prosperity of emerging industries such as frozen baking and quick freezing continues to rise, and the follow-up potential is huge. We should continue to pay attention to the opportunities of food segmentation.
3) 22Q1 Baijiu sector allocation is better than food, food sector should wait for the turning point. At present, the terminal demand for food is still recovering, and the data does not show an inflection point; At the same time, with the high base of 22q1 and the upward pressure on the cost of raw materials (the effect of price rise has not been fully reflected), the fundamentals are expected to be under pressure. In the food sector, we think we can wait for the inflection point, but we can pay attention to the marginal improvement opportunities of some stocks.
Ligao Foods Co.Ltd(300973) : the performance in 2021 is in line with expectations, and the net interest rate of Q4 is slightly higher than expected.
Event: the performance maintained rapid growth, in line with market expectations.
1) it is estimated that the company will realize revenue of 2.78 billion yuan to 2.85 billion yuan in 2021, with a year-on-year increase of 53.6% – 57.5%; The net profit attributable to the parent company was 275-295 million yuan, with a year-on-year increase of 18.5% – 27.15%; Deduct non net profit of 260 million yuan to 280 million yuan, with a year-on-year increase of 15.1% – 24.0%; The net interest rate attributable to the parent company in 2021 ranges from 9.64% to 10.61%. We expect the company’s performance to be at the central level of the forecast.
2) in the single quarter of 21q4, we expect the revenue to reach 800 million +, with a growth rate of about 40%; The net profit is 80 million + and the growth rate is about 20%; 21q4 net interest rate attributable to parent company ranges from 8.71% to 11.9%. The performance exceeded the equity incentive target (target revenue of RMB 2.534 billion), and the overall performance met market expectations. Comments: we expect that the company’s frozen baking business will account for more than 60% in the next 21 years, with an estimated revenue of 1.7 billion yuan + and a growth rate of about 80%; The business revenue of baking raw materials is about 1 billion, with a growth rate of 45%. The company’s frozen baking business maintained rapid growth, thanks to the rapid volume of large single products and commercial supermarket channels, and baking raw materials benefited from good demand and maintained rapid growth.
Demand side: at present, there is a strong demand in the industry. In the fourth quarter, the company’s Henan factory put into operation two doughnut production lines, which are rapidly in full production. At present, the supply is still in short supply (among which the traditional bakeries are more out of stock); Supply side: in 2022, Henan Weihui factory will continue to release production capacity. It is expected that Portuguese tarts and frozen cakes will continue to be put into operation at the end of 22q1, and Zhejiang production capacity will continue to be put into operation. Some baking raw material production capacity will also be converted into frozen baking capacity, so as to effectively make up for the capacity gap and ensure the rapid growth of the company’s subsequent performance. In terms of products, in addition to the original large single products such as tarts, Tapiocas, doughnuts and frozen cakes, new products such as Dafu are also rapidly deployed, which is expected to bring new growth; At the same time, due to the large increase in raw materials, especially oil (accounting for about 20% of the proportion of raw materials), the company began to raise the price of Portuguese tart and cream products in January 22, with a price increase range of 3% – 8%. At present, the price increase is conducted smoothly, which helps to alleviate the subsequent cost pressure of the company and weaken the impact of low gross profit products on the overall profitability of the company. We believe that based on the frozen baking blue ocean track, Lego has advantages in terms of capacity scale, channels and products. With the continuous release of subsequent capacity and the rapid laying of new products, it can quickly occupy the market, consolidate the leading competitive advantage and position, and continue to recommend!
Risk tip: food safety risk, raw material price fluctuation risk, epidemic risk affecting the company’s operation, and capacity expansion is not expected.
Investment suggestion: maintain the previous investment logic, and it is suggested to continue to pay attention to the target of marginal improvement of performance. For 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 pay continuous 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) Valuation adjustments have been gradually put in place and new businesses have increased α， It is suggested 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: Zhongyin Babi Food Co.Ltd(605338) .
Risk warning: the impact of the epidemic exceeds expectations; Baijiu sales recovered less than expected. Food safety risks.
