Key investment points:
Important announcements of listed companies
Sichuan Teway Food Group Co.Ltd(603317) : issue the announcement of annual performance pre reduction in 2021, and the pre reduction of net profit attributable to the parent is 50.96% Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) : issue the announcement of annual performance pre increase in 2021, and the pre increase of net profit attributable to the parent is 70% to 80% Beijing Shunxin Agriculture Co.Ltd(000860) : issue the announcement of annual performance pre reduction in 2021, and the pre reduction of net profit attributable to the parent is 80.95% to 73.81%
Industry key data tracking
In terms of dairy products, the price of fresh milk fluctuated at a high level. As of January 19, 2022, the average price of fresh milk in the main producing areas was 4.27 yuan / kg, unchanged month on month, with a year-on-year increase of 0.20%, and the year-on-year growth rate continued to slow down. In terms of meat products, the prices of piglets, pigs and pork began to rise at the bottom 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 21, 2022, the prices of piglets, live pigs and pork in 22 provinces in China have reached 27.76 yuan / kg, 14.36 yuan / kg and 23.15 yuan / kg respectively, with year-on-year changes of – 73.91%, – 51.32% and – 47.60% respectively.
Investment advice
This week, the food and beverage sector follows market volatility. The Baijiu sector has already stabilized as a result of the disclosure of annual report results. Since the beginning of the year, the adjustment of the sector has mainly focused on 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 the perspective of fundamentals, the industry has not changed substantially. At the current time point, it is recommended to select stocks with reasonable valuation and growth attributes. 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 suggested 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 incidents.
