Key investment points:
1, the sector rebounded strongly, Baijiu into the busy season. Food and beverage rose 3.81% this week, outperforming the Shanghai Composite Index (0.04%) by 3.77 percentage points. With the Spring Festival approaching, liquor entered the active selling season this week, and the real estate wine represented by Baijiu liquor performed better. The news of Wusu price increase in the beer sector fell to the ground, catalyzing market sentiment. Subdivision sector, Baijiu (5.22%), beer (4.21%), dairy products (2.31%) and other leading. In terms of individual stocks, this week Shandong Delisi Food Co.Ltd(002330) led the rise, with an increase of 31.83%, followed by Royal Group Co.Ltd(002329) (+ 18.40%), Anhui Yingjia Distillery Co.Ltd(603198) (+ 13.39%), Shanghai Laiyifen Co.Ltd(603777) (+ 12.59%) and Eastroc Beverage (Group) Co.Ltd(605499) (+ 12.36%).
2, this week Baijiu market heat up, optimistic about the sector spring festival season performance, Q1 is expected to be differentiated. Last week, we pointed out that in recent years, with the change of consumption habits and convenience, Baijiu season has gradually shifted and extended, and the actual rush season will start from about 10-14 days before the start of the Spring Festival. This week, the terminal heat has been officially heated up. We expect that the market performance of Q1 Baijiu will be differentiated in 2022. 1) at present, the market in Henan, Shaanxi, Tianjin and other markets are affected by the outbreak of epidemic outbreak, and the consumption scenes in some areas are damaged. It is expected that the market share of Henan's liquor enterprises (such as the Yanghe River, Fen, Gujing, well) will be affected. However, the completion of payment collection of various wine enterprises is relatively high, and the consumption scenes such as high-end gifts and small drinks are basically normal, and the final impact is expected to be limited. The hot tide of sauce wine in Shandong market has subsided, leaving a market for the secondary high-end price belt. Yanghe and Fenjiu have performed prominently, but the new epidemic situation in Jinan, Liaocheng and other places on January 23 remains to be observed. 2) Affected by the favorable impact of migrant workers returning home in advance, Anhui's mobile sales accelerated significantly this week, and the consumption of famous real estate wines such as Gujing, kouzi and Yingjia showed a significant upward trend; The market heat in Sichuan is higher than that in the same period last year, and the dynamic sales of banquet and group purchase scenes are better. 3) other Baijiu consumption provinces are less affected by the epidemic. The dynamic sales of Jiangsu and Hunan markets are in line with expectations and steadily increase. The second high-end prices will continue to grow with single products (such as Jiannanchun, dream 6+, four opening, and internal reference). Among them, the leading performance of Su liquor was outstanding, Jiangsu King'S Luck Brewery Joint-Stock Co.Ltd(603369) dynamic sales increased year-on-year, and the proportion of payment collection of Yanghe increased. On the whole, the collection target before each leading Festival has been basically completed, and the wholesale price is strong; The current peak season is approaching, and the market heat is obviously heating up this week. We are optimistic about the performance of the sector in the Spring Festival peak season. At the same time, after the early correction, the pessimism of the sector was released, and some targets entered the value layout range. It is suggested to continue to pay attention to Kweichow Moutai Co.Ltd(600519) , regional sub high-end leaders (such as Jiangsu King'S Luck Brewery Joint-Stock Co.Ltd(603369) , Anhui Kouzi Distillery Co.Ltd(603589) , Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , Anhui Gujing Distillery Company Limited(000596) ), and Luzhou Laojiao Co.Ltd(000568) .
3. Catering has not recovered yet. Pay attention to the Spring Festival demand and price increase transmission of food enterprises disturbed by the epidemic.
1) this week, the Bureau of statistics released the catering data of agency zero. In December 2021, the total agency zero was + 1.7% year-on-year, and the growth rate decreased month on month. The actual growth rate excluding price factors turned negative to - 0.5%, and consumer demand continued to be weak. Catering agencies have zero year-on-year growth of - 2.2%, which is - 0.9% compared with the two-year compound year-on-year growth in 2019. On the whole, they have not recovered to the level in 2019. Catering above the quota and catering below the quota were - 0.1% / - 2.7% year-on-year respectively, and the compound growth rate was 1.7% / - 1.5% respectively compared with 2019. The decline of catering was mainly dragged down by small catering. 2) There was a correction in the stock capital of prefabricated dishes for more than a week, mainly due to the overheating of market sentiment speculation under the catalysis of the previous Spring Festival and the fermentation of the epidemic. However, the long-term growth trend of the prefabricated vegetable industry is clear. At present, it is in the early stage of rapid development. It is a blue ocean market with broad space and scattered competition, and all kinds of participants have opportunities. Some listed companies have just started to set foot in the prefabricated vegetable industry, and their contribution to the performance is not high in a short time. They can focus on the product strength in combination with the industry trend, have a certain brand foundation, and can quickly establish BC end distribution channels. In the future, the prefabricated vegetable business can form a certain amount of individual stocks. Eastroc Beverage (Group) Co.Ltd(605499) , Ligao Foods Co.Ltd(300973) successively released performance forecasts this week, maintaining rapid growth and strengthening market confidence. As the Spring Festival approaches, it is necessary to pay attention to the implementation of price increases in the peak season of food enterprises and wait for the inflection point of performance. In the medium and long term, we still suggest to pay long-term attention to the beer and dairy industry with relatively certain high-end trend of the industry, and the sub sectors with large industry space and low penetration, such as low alcohol drinks, and pay attention to the leading enterprises with reasonable valuation and pricing power, such as Shanghai Bairun Investment Holding Group Co.Ltd(002568) , Angel Yeast Co.Ltd(600298) , Inner Mongolia Yili Industrial Group Co.Ltd(600887) , Chacha Food Company Limited(002557) .
4. Update of industry and company views:
(1) Shanghai Bairun Investment Holding Group Co.Ltd(002568) : the fundamentals are in good condition and there is no risk of long-term growth. In the environment of weak consumer demand, the company's revenue still maintained steady growth, and the digital retail channel also grew rapidly. The growth trend of Alibaba platform remains unchanged. In 2021, the company continued to promote new products and expand the alcohol content of products while enriching tastes, which can cover more consumer groups and consumption scenes. The trial sales of refreshing series are in good condition. Meizhimei plum wine also achieved better sales results on the double 11. Recently, the brand of 0 sugar and 0 calorie sparkling wine has been "reduced" to a new DTC model. In the future, the company is expected to continue to incubate new brands through a variety of innovative models, Increase the cost investment and promote the cultivation of consumers. The equity incentive plan launched by the company last year gives the bottom line of performance growth. The price increase at the end of December can basically cover the rise of costs, which is expected to boost the profit margin of 22 years. The company's low alcohol beverage industry is still in the early stage of development, with broad space, obvious Bairun first mover advantage and strong brand and product barriers, leading the development of the industry.
(2) Jiugui Liquor Co.Ltd(000799) : 2021 will end smoothly and 2022 will start well. The company released the performance forecast, and it is expected to achieve a revenue of 3.4 billion (year-on-year + 86%) in 2021, slightly exceeding the market expectation; The net profit attributable to the parent company was 880-950 million (year-on-year + 79% ~ 93%). The growth rate of revenue in 2021q4 slowed down compared with the first three quarters, mainly due to the better completion of tasks in 2021, and the company took the initiative to control goods and remove inventory to prepare for the coming year; The net profit attributable to the parent company was affected by the recognition rhythm of management expenses, and the net interest rate in the fourth quarter was 21% ~ 30%, slightly lower than the market expectation. The payment and delivery before the festival are progressing smoothly, and the probability rate can still achieve a good start in 2022. The company complies with the sub high-end trend and is still in the elastic rising period of investment promotion and distribution. After the channel is gradually stabilized, the actual moving sales need to be closely tracked.
(3) Ligao Foods Co.Ltd(300973) : continued high growth in revenue and effective improvement in profitability. In Q4 of 2021, the company is expected to achieve revenue growth of 34.4% ~ 45.8% and net profit growth of 5.5% ~ 32.8%. The high increase in revenue is expected to be mainly due to: 1) Q4 ushers in the traditional peak season of the baking industry, adding that the Spring Festival this year is earlier and the goods are prepared in advance; 2) The booming sales of supermarkets continued, and large single products such as cassava and frozen cake continued to be sold in large quantities. 3) Henan factory invested two new doughnut production lines and the new production capacity of cassava basically met the needs of the channel. In terms of profitability, the industry as a whole is facing the pressure of rising prices of oil and other raw materials. The company responded by optimizing internal production management, optimizing and increasing the proportion of high margin frozen baking products such as doughnuts, and successively raised the prices of sauces, port tarts, milk cream, grape Tarts and other products with large amount of oil and raw materials, so as to effectively alleviate the cost pressure.
Looking forward to 2022, the frozen baking production lines of Henan factory and Zhejiang factory are expected to continue to be put into operation, including grape tarts, doughnuts, frozen cakes, etc. the release of production capacity will support the high growth in the future, solve the problem of limited production capacity of single products with high gross profit, and the profitability will continue to improve.
(4) Eastroc Beverage (Group) Co.Ltd(605499) : the performance maintained high growth and the nationwide expansion was steadily promoted. This week, the company released a performance forecast. Q4 benefited from private fund investment, government subsidies and other factors, and the profit still maintained rapid growth. Due to the company's early hoarding of low-cost packaging materials, the profit side will be less affected by the rise of packaging material prices in 2021. If the prices of raw materials and packaging materials remain high in 2022, the performance of the company's gross profit margin is expected to be under pressure in the short term, but the company can alleviate the cost pressure by optimizing expenses, and the impact on the profit side is expected to be limited. Energy drinks are still in the stage of rapid development. Red Bull, the industry leader, is still limited. Trademark disputes have stalled, which is good for local enterprises. Dongpeng special drink still has a large blank market outside the province. The large single product 500ml gold bottle maintains a high increase. After the Spring Festival, Zero sugar products are expected to be promoted to the whole country. The gas filling series is also expected to launch a variety of flavors, and the contribution income of new products can be further increased. In the first half of the year, the company's sales network covered about 1.79 million terminal stores across the country, with rapid growth. Compared with red bull, there is still broad space for long-term growth.
(5) Shede Spirits Co.Ltd(600702) : achieve high elastic growth in 2021 and keep up with the performance of dynamic sales in the future. The company released the performance forecast. In 2021, the operating revenue is expected to increase by about 83% year-on-year, and the revenue is expected to be about 4.95 billion yuan; The net profit attributable to the parent company was 1.23-1.28 billion yuan, a year-on-year increase of + 112% ~ + 121%. The company's revenue is slightly higher than expected and the profit is slightly lower than expected. Q4 company is expected to maintain the normal cost investment level in 2021. The sub high-end price band of the company's product card position realizes high elastic growth through investment promotion and distribution, and will still benefit from the expansion of the sub high-end trend in the future. However, after the channel is gradually stabilized, it is necessary to closely track the actual sales.
5. Focus on recommending stocks: Overall, the Baijiu industry will remain stable and the secondary high-end logic will continue to be fulfilled. The dark hour of popular products has passed, and the price increase has brought about marginal improvement in the performance of the sector, so we can choose the best layout. Based on this, we maintain the rating of the food and beverage industry as "recommended". Baijiu: Kweichow Moutai Co.Ltd(600519) , Jiangsu King'S Luck Brewery Joint-Stock Co.Ltd(603369) , Anhui Kouzi Distillery Co.Ltd(603589) , Luzhou Laojiao Co.Ltd(000568) , Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , Anhui Gujing Distillery Company Limited(000596) , Wuliangye Yibin Co.Ltd(000858) , Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , Sichuan Swellfun Co.Ltd(600779) , Anhui Yingjia Distillery Co.Ltd(603198) , Jinhui Liquor Co.Ltd(603919) .
Popular products: Shanghai Bairun Investment Holding Group Co.Ltd(002568) , Angel Yeast Co.Ltd(600298) , Inner Mongolia Yili Industrial Group Co.Ltd(600887) , Fu Jian Anjoy Foods Co.Ltd(603345) , Ligao Foods Co.Ltd(300973) , Foshan Haitian Flavouring And Food Company Ltd(603288) , Chongqing Brewery Co.Ltd(600132) , Chacha Food Company Limited(002557) etc.
Short term suggestions: Kweichow Moutai Co.Ltd(600519) , Anhui Kouzi Distillery Co.Ltd(603589) , Jiangsu King'S Luck Brewery Joint-Stock Co.Ltd(603369) etc.
6. Risk tips: 1) the recovery of catering channels affected by the epidemic is lower than expected; 2) Macroeconomic fluctuations have hindered the pace of consumption upgrading; 3) Industry policy changes lead to increased competition; 4) The price of raw materials has risen sharply; 5) Focus on the company's performance or less than expected; 6) Food safety incidents, etc.
