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Medium-term strategy of the food and beverage industry: stick to long-term value, see more food and beverage bottom reversal after the epidemic

Release Time:2022-06-15 Topic:Leading stocks in the food and beverage industry Reading:96 Navigation:Stock Liao information > Food > Medium-term strategy of the food and beverage industry: stick to long-term value, see more food and beverage bottom reversal after the epidemic phone-reading

(Report Producer/Author: Western Securities, Xiong Peng, Liu Xianrong, Li Xinxin)

I. Review of the food and beverage sector

1.1 Market performance: Food and beverage sector outperformed the broader market YTD, valuation correction

Sector performance: Food and beverage sector fell from January to April 2022 16.95%. Outperformed the CSI 300 Index by 1.76pcts and ranked 11th among 31 first-tier sub-sectors. In terms of molecular industries, soft drinks (-24.16%), baked goods (-29.51%), and other alcohol (-30.49%) ranked relatively low, underperforming the food and beverage sector and the broader market.

The valuation of the food and beverage sector is at a high level, but it fell month-on-month. The food and beverage valuation (TTM) is about 35.86 times, which is at a high position compared with other sub-sectors, but has dropped from the high point compared with the previous month.

Rise and fall of individual stocks: Among the top 10 stocks in the sector from January to April 2022, Qinghai Spring (+88.97%), Golden Seed Wine (+53.64%), *ST China and Portugal (+23.25%) were the top gainers.

1.2 22Q1 Active Fund Position Analysis: The overall position has been pulled back, The ratio of top positions with heavy positions is relatively stable

Food and beverage sector: The ratio of heavy positions and overweight ratios of food and beverages decreased slightly in 22Q1. In 22Q1, the overweight ratio of the food and beverage sector (active funds) was 13.45%, a year-on-year decrease of 3.82pct and a month-on-month decrease of 1.32pct.

The top three targets in the fund's heavy-holding sector remained unchanged month-on-month, and the market value ratio decreased. The heavy positions are still Kweichow Moutai, Wuliangye, Luzhou Laojiao, Shanxi Fenjiu, and the fifth target is Yili. The market value ratio of heavy positions varies, specifically, Kweichow Moutai (-10%), Wuliangye (-55%) , Luzhou Laojiao (-11%), Shanxi Fenjiu (+3%), Yili (-5%). In terms of the year-on-year classification of the holdings, in terms of the number of individual stocks, most of the stocks with heavy positions have a large adjustment range, showing a year-on-year change of more than +50% or less than -50%; in terms of the market value of the holdings, the -(10%-20%) range is concentrated. Distribution, indicating that there are more small positions to lighten up.

Liquor sector: 22Q1, the proportion of heavy storage and over-allocation of liquor decreased slightly. In 22Q1, the proportion of heavy positions in the liquor sector (active funds) was 11.25%, a year-on-year decrease of 3.02pct and a month-on-month decrease of 1.11pct; the over-allocation ratio of the 22Q1 sector was 2.77%, a year-on-year decrease of 1.57pct and a month-on-month decrease of 0.13pct. In 22Q1, the heavy holding and over-allocation ratio of liquor continued to decline, but it was still at a high position in the historical range.

High-end liquor "Mao Wulu" was reduced: Mao Wulu Fen holds a heavy position The sum of the shares is 9.48%, accounting for about 84% of the liquor sector (the overall weight ratio of the liquor sector is 11.25%); Jiuguijiu (+60%), Wuliangye (-55%), Laobaiganjiu (-64%) adjusted slightly Big; Shede (+15678%), Yingjia Gongjiu (+419%), and Shuijingfang (+227%) all increased their holdings significantly.Shunxin Agriculture (-98%) was significantly reduced.

Condiment segment: 22Q1, the heavy allocation of condiments dropped slightly, and the overall allocation is still low. In 22Q1, the proportion of heavy positions in the condiment sector (active funds) was 0.12%, a year-on-year decrease of 0.07pct and a month-on-month decrease of 0.02pct. The fund's heavy position ratio is lower than the sector's corresponding market value ratio of 1.03pct, which is in a state of underweight.

The holdings of traditional condiment stocks have all been reduced: leading Haitian Flavor (-20%), Zhongju High-tech (-59%), Qianhe Flavor (-87%) ), Hengshun Vinegar (-100%).

Dairy products: 22Q1, the ratio of heavy warehouse and over-proportion of dairy products rebounded month-on-month. In 22Q1, the overweight ratio of dairy products sector (active funds) was 0.96%, a year-on-year decrease of 0.18%pct, and a month-on-month increase of 0.05pct; in 22Q1, the overweight ratio of the sector was 0.24%, a year-on-year decrease of 0.30pct and a month-on-month increase of 0.06pct.

Decreased positions in leading dairy stocks: Yili (-5%), Bright Dairy (-93%), Miao Ke Lan Duo (-98%), New Dairy (-82%) and Yantang Dairy (-92%) were reduced.

Beer sector: 22Q1 beer heavy-stock ratio and over-allocation ratio dropped QoQ, and overall still in a high position. In 22Q1, the overweight ratio of the beer sector (active funds) was 0.53%, up 0.04pcts year-on-year, and down 0.16pcts month-on-month; the overweight ratio of the 22Q1 sector was 0.21%, up 0.05pct year-on-year, and down 0.12pct month-on-month, at a high position in the historical range .

Beer: Tsingtao Beer (A+92%/H+227%), Yanjing Beer (+238%) increased holdings, China Resources Beer (-36%), Chongqing Beer (-17%) was reduced.

2. 2022 medium-term investment strategy: stick to long-term value, see the bottom reversal after the epidemic

2022 medium-term investment strategy Two main directions: 1) Stick to The core target of long-term value; 2) The direction of post-epidemic recovery is laid out on the left. At present, the food and beverage sector is suppressed by multiple factors such as macro economy + epidemic situation + pessimistic expectations + capital pressure. At present, many repressive factors are expected to be gradually lifted, and the overall prosperity has a high probability of bottoming out. From a top-down perspective and combined with the trend of improving food and beverage fundamentals, our mid-term investment strategy in 2022 mainly has two main directions: 1) Stick to the core long-term value target; 2) The left side lays out the direction of post-epidemic recovery.

Adhere to the main line of value: Food and beverages are traditionally long slopes and thick snow tracks. The history of the past few decades has verified that the fundamentals of the plate are strong and deterministic. Every big drop is a good time to configure. Since 2021, the food and beverage sector has been suppressed by multiple internal and external factors, and the overall valuation level has fallen back to the level in 2019.

The main line of post-epidemic recovery: the short-term dimension, the epidemic will continue to affect production, living and consumption starting in March 2022, and the fundamentals will be directly damaged in the first and second quarters, but from a marginal perspective, At present, the epidemic situation in many places has gradually reached an inflection point, rising and falling, and the marginal improvement is highly certain. We believe that the month-on-month improvement brought about by the recovery of the epidemic is highly certain, and the direction of the previous epidemic damage is expected to usher in greater flexibility. The main layout directions are:

1) Sub-high-end and real estate Liquor: Both fundamentals and valuations are repaired, focusing on endogenous reform targets. The impact of the epidemic on the annual performance of wine companies is much weaker than that in 2020. The high performance growth in the first quarter is confirmed, and the pace of shipments in the second quarter may lag slightly. Considering the post-epidemic scene recovery, we can still be optimistic about the Dragon Boat Festival and the Mid-Autumn Festival peak season.

2) Food and beverage-related industry chains such as condiments: focus on demand recovery, and select targets with both certainty and flexibility. In the past 21 years, the condiment industry has experienced multiple tests such as weak demand, squeezed community group buying channels, and rising costs.End-end consumption is under pressure again, and short-term demand recovery is the main line. During the year, we focused on the transmission of price increases and the improvement of gross profit. This year, the pressure on raw material costs still exists, but the marginal increase has slowed down. With the collective price increase in 21 years, the overall cost pressure has eased.

3) Beer sector: Dilute off-season fluctuations and embrace peak beer seasons. The short-term epidemic has a greater impact on beer sales in March and April, but May-August is the key to the peak beer season. If the epidemic improves in the future, the peak beer consumption season can still be expected. The pressure on the cost side is controllable throughout the year. Price increases, supply chain optimization, and fee control are all means for the company to hedge cost pressures and increase profits.

3. Liquor: Adhere to long-term value and focus on endogenous reform targets

3.1 The short-term impact of the epidemic is weaker than that in 2020, and the recovery of demand after the epidemic can be expected. Appropriately optimistic

1) The intensification of the epidemic in Shanghai has implicated East China to adopt closed management, and consumption in Northeast China has entered a recovery stage. Up to now, the domestic epidemic situation is more serious from Shanghai to East China and Jilin to Northeast China. At present, the number of confirmed cases in Shanghai continues to increase, and Jilin has achieved zero social coverage. It is expected that the Shanghai epidemic will continue to involve closed management in East China, and consumption in Northeast China will enter recovery phase. Liquor consumption scenes are mainly banquets. Epidemic prevention requirements such as home isolation and prohibition of gatherings have a certain impact on liquor consumption scenes, especially large-scale wedding and birthday banquet scenes. However, this round of epidemic broke out in the off-season of liquor. Control, it has little impact on the stocking of the Dragon Boat Festival peak season and the annual performance.

2) In terms of rhythm, the performance of liquor companies in the first quarter has been confirmed to increase, and the epidemic is lagging behind The rhythm of payment collection and delivery may have a certain impact on the second quarter, while the national and real estate wine faucets are less affected. According to channel research, most wine companies have received the payment for the first quarter and shipped them as originally planned before the Spring Festival, and some wine companies have released business data from January to February. The high performance of the first quarter has been confirmed, and the channel inventory is generally not high. Currently affected by the epidemic, consumption scenarios in East China and Northeast China are missing from March to April, the superimposed logistics efficiency is reduced, and the turnover of goods is slowed down. After the epidemic improves, the channel needs to give priority to digesting the existing inventory, which may have a delayed impact on the rhythm of payment collection and delivery in the second quarter. However, the high-end wine and the leading real estate wine companies with strong discourse power in wineries are less affected.

3) According to historical experience, after the epidemic improves and consumption is liberalized, the scene is expected to be replenished quickly, and the restoration of high-end wines is faster than that of sub-high-end wines. Looking back at the first half of 2020, from the outbreak of the epidemic to the basic liberalization of consumption under moderate control, the consumption of liquor was bleak in February and March, and the mobile sales dropped to the freezing point. The recovery is a little slow, and the strong real estate leaders have recovered to 70-80%. After continuous repairs during the summer vacation, during the peak season of the Mid-Autumn Festival and National Day, the sales of high-end wine and sub-high-end faucets have basically recovered in an all-round way. Throughout the year, the Spring Festival, the largest peak season, lost the most and part of the Dragon Boat Festival. In the end, through the joint efforts of manufacturers, the performance of the whole year was basically stable and there was no significant decline.

The short-term impact of the epidemic is much weaker than the same period in 2020, and high-quality wine companies are still expected to complete the original Make a business plan. This round of epidemic situation has the following three advantages: 1) The Spring Festival stalls are not affected, and only some consumption scenarios were lost in March in the first quarter; 2) The epidemic occurred in the off-season of liquor, which may cause certain losses to the May 1 stocking, but The Dragon Boat Festival has not been affected for the time being, and the sales of the Dragon Boat Festival accounted for about 65% of Q2; 3) This round of epidemic is not under the nationwide closed management. Compared with the ban on banquets in most parts of the country in 2020Q1, only a few areas with severe epidemics are strictly prohibited. , the rest of the cities are recommended to be postponed, and the degree of lack of scenes is far from that in 2020Q1.

To sum up, we judge that the short-term impact of this round of epidemic is far weaker than that of the same period in 2020. Given that the payment collection and delivery in the first quarter were basically completed before the Spring Festival, this round of epidemic will affect all The impact on the performance of the winery in the first quarter is negligible. It may have a certain impact on the performance of the second quarter, but it is within 20%. Among them, the high-end wine situation is better than the second-end high-end wine. The impact is low single digits in the whole year, and high-quality enterprises are still It is expected to complete the high growth target originally set at the beginning of the year. Referring to the performance and stock price performance of leading wine companies in 2020, Jiugui wine and Shanxi Fenjiu, which have grown rapidly against the market, are the most resilient. We believe that under this round of epidemic, highWine companies with smooth logic of end-to-endization + nationalization may follow a similar path, their performance continues to be released, and their stock prices are optimistic.

3.2 High-end wine: the demand for famous wine is still rigid, and the quarterly and annual tasks are expected to be successfully completed

Thousands The price of yuan is accompanied by rigid demand, stable expansion and sustainable expansion, and the epidemic situation in the off-season throughout the year has little impact on famous wines. The price of Maotai is supported at 2,500-2,600 yuan, giving a thousand yuan price with a sustainable opportunity for products. Wuliangye, Guojiao 1573, Qinghualang and other large single products have stable growth and stronger risk resistance. After the rapid growth has begun to take shape, the price band of 1,000 yuan will gradually move towards a pattern of one superpower and many strong players in the future. From the perspective of demand, the consumption scenarios of products above 1,000 yuan headed by Moutai and Wuliangye are more inclined to high-end business banquets and gifts. The rigid demand is least affected by extraordinary events such as the epidemic, and the scene is repaired the fastest. At present, the channel has completed the payment collection as planned, the winery's delivery progress is basically the same as that of the same period, and the market inventory is reasonably low. The impact of the off-season epidemic on famous wines is negligible throughout the year, and the good start has basically established the performance certainty in the first quarter. The task is expected to be completed successfully.

3.2.1 Moutai: The new chairman took office and implemented a series of reform measures, with remarkable results in improving the market environment

The new chairman of Moutai took office and implemented a series of reform measures. The market environment of Moutai has improved compared with previous years, and the superimposed structure of production has been improved in a big year, and the annual performance is likely to increase at a faster rate. On August 30, 2021, the Guizhou provincial government agreed to recommend Ding Xiongjun as the new chairman of Moutai Group and the joint-stock company. After Secretary Ding took office, he implemented a series of reform actions, including canceling the unboxing and sales of Moutai liquor, increasing the opening of offline stores, improving the internal structure of Moutai liquor and series liquor, restarting Moutai e-commerce, etc., to stabilize market prices and reduce scalpers and other speculations Behavior, increase real consumption, etc. have played a significant role, and the market environment required to increase ex-factory prices has improved significantly compared with previous years. In 2022Q1, non-standard products achieved rapid growth under the background of a low base in the same period. The Spring Festival volume increased and prices rose. In the first quarter, the company achieved a total operating income of 33.187 billion yuan, a year-on-year increase of 18.25%, and realized a net profit attributable to the parent of 17.245 billion yuan, a year-on-year increase. 23.58%, the good start performance exceeded expectations, and the annual target was gradually fulfilled.

1) The "unboxing order" was cancelled, the Feitian price fell steadily, and the hype and scalping sentiment cooled. In order to stabilize the price of Feitian Maotai and reduce the inflated prices caused by hoarding and speculation, the company will require all dealers to unpack and sell from 2021, and sell 100% of them in loose bottles. The price rose rapidly, and the price of loose bottles also rose, causing the price to rise instead of falling. At the end of September and mid-December 2021, the "unboxing order" for non-standard products and Feitian Moutai will be cancelled in turn, allowing 1x6 Feitian Maotai to be listed for circulation. Two sales forms, entering the low season of Q4, the price gradually fell in a benign manner, and the market hype was effectively controlled.

2) Launched 1935 to lead a series of wines to open more than 1,000 yuan of space, and production capacity to high-end Serial wine transfer. On January 18, 2022, "Moutai 1935" was launched, with an ex-factory price of 798 yuan/bottle and a retail guide price of 1188 yuan/bottle. About 700-1000 tons were released three times in the first quarter. The response to the listing was good, the market fully digested it, and the actual transaction price From 1,650 yuan at the beginning of the listing, it has dropped to about 1,500 yuan and remains stable. It is estimated that about 3,000 tons will be released in the first year, which is the company's supplement to the 1,000-2,000 yuan price band, opening the ceiling for the structural upgrade of the series of wines. At the same time, in 2022, the company plans to "slim down" a series of wines, and will stop production of 10 non-mainstream products or basic prince wines and welcome wines before and after. , to promote the upgrading of the internal structure of the series of wines, the ton price of the series of wines is expected to increase rapidly, and promote the rapid growth of the annual income of the series of wines.

3) Restart the Moutai e-commerce platform, increase direct sales, and test the market response with non-standard products. March 31, 2022Today, the long-prepared "i Moutai" e-commerce platform of Moutai Company was officially launched. The products that can be purchased include mainstream non-standard products such as Moutai 1935, Year of the Tiger Moutai, and colorful glaze treasure Moutai. ) are consistent. On the first day of the platform's launch, more than 26,000 bottles were launched, and the number of subscriptions exceeded 2.2 million. The platform was successfully built under the influence of the brand. This time, the e-commerce platform was restarted. The company used the blockchain algorithm to encrypt the subscription code of each platform user. As a result, the notarized document is generated by the notary service, which forms a closed-loop transaction between the Moutai company, the channel dealer, and the consumer. In addition to grasping the consumer information, it also eliminates the behavior of hype and hoarding.

3.2.2 Wuliangye: Stopped stock and strengthened price control, management decided to promote fundamentals to be good

At the meeting, the emphasis on price was reiterated, and the price was stopped to prepare for the peak season. In 2022, the company will increase the unplanned ex-factory price and stipulate that the nationwide dealers will pay according to the ratio of 2:3 inside and outside the plan, and the comprehensive cost of general five will increase to 969 yuan. There are still some low-cost goods in the market. After a short-term rise, the wholesale price has dropped to around 970 yuan, and even the price has been inverted. The profit of dealers has been reduced in a short period of time. In March 2022, the company's various theaters organized a conference in the local market. The meeting proposed that the core goal of the recent stage is still to increase the market price of the 8th generation and the fifth generation, and the stock will be stopped for two weeks in the middle and late March, and the low-cost inventory in the early stage will be naturally digested by the market. Therefore, despite the severe epidemic situation in many places in March, the stock of the general five is still low and maintained at about half a month. The epidemic has caused a slight delay in the progress of price support, and the current demand is low season. In the peak stocking season, the five batches prices are expected to rise year-on-year with increasing demand.

The management team has gradually stabilized people's hearts, and the fundamentals are expected to improve quarter by quarter. The current stock price is expected to be low, and the layout on the left is cost-effective. In February, Zeng Congqin, the former general manager of the group, took over the position of chairman, and Zou Tao, the former general manager of the joint-stock company, took over the position of general manager of the group. 5. The classic price control will gradually take effect, and the profit margin of dealers is expected to improve quarter by quarter. The amount of classics will be combined with the actual market to seek healthy and long-term development together with General Five.

3.2.3 Luzhou Laojiao: highly strengthened dynamic marketing cultivation, low High potential energy escorts performance, and equity incentives are implemented

During the epidemic period is the usual period of controlling goods and supporting prices, channel profits are stable, and the increase of high-level national cellars has shifted from market to dynamic sales. transformation. According to channel survey feedback, the progress of Guojiao series is more than 40%, and the progress of delivery is more than 35%. The rhythm of payment collection and delivery has no significant impact. For the whole year, Guojiao Company's revenue growth of more than 30% is still achievable. After years of cultivation and price band expansion in some markets such as North China and South Jiangsu, the low-level Guojiao has formed high growth potential and is expected to continue to contribute to the country. The main increase of Jiao Company; Gao Guojiao is in a critical period of transition from retail to dynamic sales. The keynote is to control goods and support prices throughout the year. The second round of payment starts in April, and the planned payment price is increased from 890 yuan to 960 yuan. Yuan (970 Yuan in some markets), there is a price increase as a guarantee, and there is little pressure to complete tasks throughout the year. The fuzzy rebate mechanism of Guojiao Company has developed and matured after years of operation. At the same time, it will continue to strengthen consumer cultivation, establish a high price, and build a high brand.

Equity incentives are implemented, returning to the top three goals unchanged. On February 20, 2022, the company issued an announcement stating that the board of directors believes that the grant conditions stipulated in the restricted stock incentive plan have been met, and agreed to determine the grant date on December 29, 2021, at the grant price of 92.71 yuan per share, to the company. 441 incentive objects were granted 6.9286 million restricted shares, covering core management personnel and technical backbones. The unlocking conditions include: the return on net assets in 2021-2023 shall not be lower than 22%, and shall not be lower than the 75th percentile of the benchmark enterprise; The average annual net profit growth rate shall not be lower than the 75th percentile of the benchmark enterprise;The proportion of business income is not higher than 65%, and the target is challenging to some extent, and employees are encouraged to work together to promote the company to achieve high-quality growth. (Report source: Future Think Tank)

Sub-3.3 high-end and real estate wines: the rhythm of the second quarter was slightly affected, but the whole year can still be optimistic

< p id="0RUVUV7H">The payment collection in the first quarter has been completed. Due to the epidemic, the shipment was delayed, and the rhythm in the second quarter may be slightly affected. The annual performance can still be viewed optimistically. According to channel survey feedback, sub-high-end and real estate wine companies’ payment progress before the Spring Festival is basically over 30%, most of which are over 35%, and Yanghe, Gujing and other real estate leaders are over 50%, and a high increase in the first quarter is confirmed. Considering the severe epidemic situation in Shanghai, Jilin and other places since mid-to-late March, implicated in the tightening of lockdown measures in East China and Northeast China, and the lack of liquor consumption scenes to varying degrees, since the outbreak period is the off-season of liquor consumption, the loss of sales is still possible. Within the scope of control, the winery considers the pressure of channel operation, superimposes the epidemic situation to reduce logistics efficiency, and suspends shipments to channels. Therefore, the inventory of channels in various places is still relatively reasonable and normal, and there is no need to worry about the price and market order being damaged in the short term.

In view of the fact that sub-high-end and real estate wine companies have less right to speak about channels than high-end wine companies, and wineries are based on the cooperative concept of harmonious coexistence and long-term development of manufacturers, they will make up for sales after the epidemic is over. In the past, the channel would not be forced to complete the second round of large-scale payment collection. The priority is to assist the channel to digest inventory as soon as possible after the scene is restored. We expect payment collection and delivery in the second quarter may lag slightly, but at present, the possibility of the epidemic affecting the Dragon Boat Festival season is more likely Small, the sales in the three peak seasons have not been affected throughout the year, and the performance can still be expected to be optimistic.

Hui wine is less affected than Su wine, and the sub-high-end proportion is high and the risk resistance is stronger. Judging from the scope of the epidemic, wine companies involved in key markets in the epidemic area are more affected. Jiangsu Province, which is also in East China, has significantly stronger banquet restrictions than Anhui Province, and Huijiu is less affected than Sujiu. From the perspective of consumption scenarios, the larger-scale wedding banquet market is strictly restricted, and the control of small-scale business banquets is relatively loose, and wine companies with a high proportion of products priced above 400 yuan are less affected.

Shanxi Fenjiu: It is a high-quality sub-high-end faucet that has the dual attributes of growth and determination, and is optimistic about the long-term configuration value. In 2022Q1, the company achieved a total operating income of 10.530 billion yuan, a year-on-year increase of 43.62%; realized a net profit attributable to the parent of 3.710 billion yuan, a year-on-year increase of 70.03%, and the performance continued to exceed expectations, mainly due to the strict control of goods in 2021Q4, the market has been in a state of hunger for a long time. The positive channel has a high enthusiasm for making money. The superimposed winery intends to increase the quota of blue and white series to control the supply of glass fen. The structure improvement is effective and rapid, and the performance release is more flexible.

According to channel research and feedback, the company's current payment progress has reached 40%, the Q1 delivery progress is over 35%, the inventory in key northern markets is about 15 days, and the central China region is generally out of stock. The price is stable and there is an upward trend. The Blue and White 30 Revival Edition has stopped shipping due to the completion of tasks in the first quarter that exceeded expectations. In March, some markets have increased the payment price. At the end of the year, it will be reported based on the distribution performance. The price increase is mainly intended to increase the market. price. The upgraded version of Bofen was originally scheduled to be launched in Spring Sugar, but will be delayed due to the impact of the epidemic. It is expected that the comprehensive cost of dealers will increase to 60-70 yuan, and the market transaction price will be more than 100 yuan. 20%, choose the willing and matching channel strength to distribute the goods. In the future, the upgraded version will completely replace the old version of Bofen. For the upgrade process, please refer to Blue and White 30, and gradually increase the proportion of the upgraded version. The upgrade of Glass Fen is not a simple change of packaging and price increase. Considering the rapid increase in brand height, the company will still invest more energy in cultivation, and treat the upgraded glass Fen with the vision and strategy of promoting new products.

We believe that: 1) The product structure of Fenjiu is highly risk-resistant, with rapid structural improvement and certain controllability; 2) The revival version is stable upward and gradually stabilizes in the price band of 1,000 yuan; 3 ) The channel enthusiasm is more prominent among the sub-high-end wine companies; 4) The brand has a deep foundation, and the consumption cognition is extensive and profound; Focusing on investment and cultivation, both the revival version and the new glass Fen have a high probability of being upgraded successfully. Under multiple logics, the company can easily complete the "more than half of the time and more than half of the task". Fenjiu is still a high-quality target with dual attributes of growth and determination, and I am optimistic about the company in the long run. investment value.

Jiuguijiu: The annual target is expected to be completed ahead of schedule, focusing on the red altar to cultivate a large single product pattern, and optimistic about the medium and long-term growth logic. In 2022Q1, the company achieved a total operating income of 1.688 billion yuan, a year-on-year increase of 86.04%; realized a net profit of 521 million yuan, a year-on-year increase of 94.46%, mainly due to the new high enthusiasm for returning funds through the good start channel, the high increase in the internal reference series, and the Spring Festival earlier than last year. , Some of the replenishment demand in March was pushed forward to meet in advance in February. It is expected that there will still be a year-on-year increase in March, and the revenue in the first quarter is expected to increase by more than 80%. The structure has improved rapidly and the performance flexibility is more sufficient.

According to channel research and feedback, the company's overall payment ratio in the first quarter reached about 40%, a good start has laid a good foundation, the epidemic situation in the province and key markets is under control, and the annual target is expected to be completed ahead of schedule. Starting from March, Zitan has been suspended nationwide for 3 months, and the provincial and Henan markets are temporarily suspended until November. This move is intended to control the price of the goods. The target price is 500-600 yuan, and the price system of the Jiugui series will be widened. Considering that The proportion of Zitan is not high. We believe that the stoppage has little impact on the performance, and the price is more conducive to the development of Hongtan, or the lack of sales caused by the refusal to stop the goods. In 2022, the company will devote more energy to the maintenance of market order and the cultivation of consumer dynamic sales, focusing on the creation of big single products in the red altar. The Jiugui series outside the province will enter the transition stage from distribution growth to dynamic sales-driven growth. Strong, the Jiugui series closely follows the price upgrade, and the double growth of strategic markets such as East China is expected, the structure is improved + the nationalization continues, the large single product pattern is gradually cultivated, the high growth, sustainable logic is smoother, optimistic about the medium and long-term growth of Jiugui .

Shede Wine Industry: A good start has laid a solid foundation for high growth throughout the year, and the dual brand operation of Shede + Tuopai will create the first brand of old wine. According to the channel survey feedback, the company got off to a good start and received payment smoothly, and the market price rose slightly. In terms of Hede brand, Taste Hede has maintained a steady price increase under the action of controlling goods and prices, while Wisdom Hede continues to cultivate circle-level consumption, and follows the logic of sub-high-end expansion and nationalization, and the growth momentum is just right; in terms of Tuo brand, T68, Liuliang When the products return to the market, the merchants will quickly increase the volume and enjoy the dividends of the expansion of the bottled wine, which will drive the Tuo brand to achieve high growth. Fosun took the lead to create a stable development environment for the company, strengthen production and research around the old wine strategy, create strategic single products under the Shede and Tuo brands, develop the national market by category, and comprehensively improve product quality, channel quality, and customer and consumer experience. We believe that under the multiple clear logics of nationalization + dual brands + old wine first brand strategy, the company will maintain high growth in 2022 with a high probability.

Gujing Tribute Liquor: Gu 8 and above will be stimulated by high-end potential energy, and it is expected to reduce expenses when it is matured, superimposed on the expectation of equity incentives, and the performance release conditions are good and the driving force is strong. According to channel survey feedback, during the Spring Festival, the epidemic prevention policy is reasonable and appropriate, the number of people returning home is increasing, visiting relatives and friends is active, and the demand for gifts and banquets has increased. The year-on-year decrease of less than 10% to 20% month-on-month, and benefiting from the recovery of economic activities in towns and villages, in addition to the high-end products of Gu 8 and above, the mid-range products with consistently high inventory, and the sales of Gu 5 exceeded expectations, and the inventory was reduced to a reasonable level. Level. Although Anhui belongs to East China in this round of the epidemic, because it is farther away from Shanghai, the closure and control and restrictions are less than those of neighboring provinces, and the lack of banquet scenes is smaller, and Huijiu is not seriously affected.

Yanghe Co., Ltd.: The blue classic upgrade is about to be completed, and the manual class will be launched into the thousand-yuan price band. The annual performance is expected to increase at a faster rate. According to the channel survey feedback, in 2022, the company will increase the payment requirements for good starters, and the progress of payment in the first quarter will reach 50%. Especially for Shuanggou dealers, the progress of payment collection is over 50%. The blue classic payment requirements are slightly lower. Below 35%, the progress of payment collection outside the province ranges from 40-70%, and the payment collection ratio is higher than that in 2021. Most dealers inside and outside the province increase their annual contract tasks by 20%, of which the dream series growth rate requires more than 25%. Crystal Dream has recovered to the sales level of Dream 3 in 2019, and the company's demand for performance is stronger than that in 2019-21.

Jin Shi Yuan: The first quarter results were in line with expectations, the high status in the province was not affected, the new chairman was rated well, and the annual revenue performance target remained unchanged. In 2022Q1, the company achieved a total operating income of 2.988 billion yuan, a year-on-year increase of 24.69%; net profit attributable to the parent company was 1.002 billion yuan, a year-on-year increase of 24.46%. The performance was in line with expectations.The margins have grown steadily, among which the two-part and Tanya-guoyuan have grown brightly, and the four-parts have grown steadily. Since 2021Q4, the V-series has controlled the goods and prices, digested the market inventory, and has a high base in the same period, and remained stable in the first quarter. The price system of Guoyuan Sikai has dropped by 5-10 yuan, which is due to the above-mentioned competition between the two leading players and the intensification of activities in the peak season. The V3 channel is very profitable, resulting in more price drops in 2021. It is expected that the volume and price will be properly balanced in 2022. Compared with 2021, both volume and price will increase.

The valuation has fallen back to mid-2020, and the liquor sector configuration is cost-effective and a growth leader There's a lot of room for opportunity. Looking back at the valuation trend since 2020, after the first round of the epidemic in 2020, the liquor sector has entered a stage of collective valuation improvement due to multiple advantages such as long storage period, fast recovery of consumption scenarios, strong certainty, and increased concentration, among which performance is still achieved. The high-growth Shanxi Fenjiu and Jiuguijiu have the largest increase in valuation. In 2021Q4, the valuation peaked and fell, and entered the stage of returning to rationality. At present, the valuation of the sector and leading companies has returned to the mid-2020 level, which is close to the bottom of this round of valuation. As expected, it can be gradually deployed on the left side. High-end wines and strong real estate wines such as Moutai, Wuliangye, Luzhou Laojiao, Gujing Gongjiu, etc. have strong certainty, sufficient safety margins, and high-growth companies with outstanding performance such as Shanxi Fenjiu, Jiuguijiu, Shede wine industry has more room for valuation recovery, and its stock price is more resilient.

3.4 Focus on demand recovery, optimistic about the target of endogenous reforms

Epidemic prevention measures are gradually improved, and attention to the recovery of banquet demand , optimistic about the target of endogenous reform. The current epidemic has the characteristics of high frequency, mild symptoms, and rapid spread. The epidemic prevention measures in various places have been gradually improved, and we strive to achieve a complete reset in the shortest time and at the least cost, so as to ensure the normal life of residents and social operations. In other words, it will gradually evolve into a small-scale, ultra-short-term impact event that occurs frequently, and consumption will hardly be affected in the rest of the state. After the end of this round of epidemic, the demand has improved as expected. We can pay attention to the concentrated release of demand brought about by the banquet reorganization. We are optimistic about the target of endogenous reform. The current overall valuation has returned to the level of 19 years, and the certainty of high-end, sub-high-end annual performance is still strong. , the boom is still there, optimistic about the certainty of the high-end and the high elasticity of the second-end.

4. Beer: Dilute off-season fluctuations and embrace the beer peak season

4.1 Why worry about off-season disturbances, look forward to peak seasons and be true


In March, the epidemic situation repeated in many places, and the market of Tsingtao Brewery Base was greatly damaged. Since March, the epidemic has recurred in many places, among which Shanghai, Shandong, Jilin, Guangdong and other places are more serious. The sales of major beer companies in March were affected to different degrees. Among them, Tsingtao Brewery fell by more than 20% year-on-year, and China Resources Beer fell by more than 10% year-on-year. %, and Chongqing Beer was basically flat. There are two reasons why Tsingtao Brewery’s sales were seriously damaged: (1) There are many advantageous markets involved in the outbreak area. Shandong is the base market for Tsingtao Beer, with sales accounting for about 20%. In addition to Jilin, Guangdong, and Shanghai, sales accounted for about 30-40%. In March, Shandong and Shanghai sales fell by more than 40% year-on-year, which had a greater impact on the company's total sales. (2) Shandong has a lot of production capacity, and the epidemic affects production and transportation. Tsingtao Brewery’s production capacity in Shandong accounts for more than 30%, and some products are supplied to the whole country. The epidemic has affected the normal operation of the factory and the transportation of raw materials and products, which in turn has affected sales in many places.

Q2+Q3 is the peak season for beer consumption, and there is no need to worry too much about the fluctuation of Q1 off-season. On the whole, Tsingtao Brewery suffered a severe loss in sales in March, and its Q1 sales fell by a low single-digit year-on-year; China Resources and Heavy Beer still achieved positive year-on-year growth in Q1. The temperature in Q2 and Q3 is relatively high, which is the peak season for beer consumption. The sales volume of Tsingtao Beer and Chongqing Beer in Q2 and Q3 together accounted for more than 60%. We believe that we should focus on peak season sales and downplay the slight fluctuations in Q1 sales.

The inflection point of the epidemic is gradually emerging, the prevention and control policies are optimized, and the peak season consumption is welcoming the dawn. On April 11, the total number of newly confirmed cases and new asymptomatic infections in the country on the same day decreased. The total number of new cases in Shanghai began to decline that day, the prevention and control policy was further optimized, and the "three districts" were implemented.Divided control, and gradually lifted the blockade in some areas; many places in Jilin have achieved social clearance, and production and life have resumed in an orderly manner; Shandong and Guangdong have maintained the number of new cases per day, and the epidemic situation is controllable. With the epidemic under control in Shanghai, the national epidemic is expected to usher in an inflection point. At the same time, under the general policy of "dynamic clearing", the national prevention and control policy shows a scientific and flexible optimization trend, and the epidemic prevention policy may enter a new stage. We believe that under the premise that the epidemic is expected to usher in an inflection point and the prevention and control policies are gradually optimized, the consumption of beer on-site drinking channels may gradually recover. According to channel research, April sales accounted for only 28% of Q2, and nearly 10% of the whole year. May-August is the key to the peak season. If the epidemic recovers in May, the peak season sales can still remain optimistic.

4.2 Volume and price increase + cost controllable, full-year profit growth is expected

4.2.1 The price increase has been transmitted smoothly, and the logic of volume and price increase is expected to be realized

In order to ease the cost pressure, the fourth round of price increase in the beer industry has gradually been implemented. The epidemic has affected normal production activities, domestic glass and other packaging materials are in short supply, and prices are high; in addition, the quantitative easing policy to stimulate the economy, mainly in the United States, has caused commodity prices to rise. Since 2020Q4, the price of packaging materials has continued to rise. At the end of 2021, the price of aluminum ingot/corrugated paper/glass will increase by 14%/21%/21% year-on-year, prompting beer companies to raise prices one after another, and bravely venture into Tianya, Wusu, Chunsheng, Classic, etc. The ex-factory prices of core large single products have increased. According to the company's feedback, the current price increase transmission is smooth.

The high-end beer in 21 years went smoothly, and the direct price increase + structural upgrade in 22 years is expected to promote The ton price continued to rise. In 2021, major beer companies have handed over excellent answers to high-end products: Tsingtao beer ton price increased by 7%, main brand sales accounted for 54.6%, +5pcts year-on-year; Chongqing beer ton price increased by 4%, high-end beer sales accounted for 24% , an increase of 4pcts year-on-year; the ton price of China Resources Beer increased by 6.6%, the sales volume of sub-grade and above accounted for 17%, an increase of 4pcs, and the sales volume of sub-grade and above increased by 27.8% year-on-year. The direct price increase in 2021 is expected to drive the ton price to increase the low order to the medium order, and the structural upgrade will drive the ton price to increase the ton price to the high order. The ton price of beer enterprises is still expected to increase the medium and high order in 2022.

4.2.2 The price of some raw materials was locked, and the price increase eased the cost pressure

Barley and packaging materials accounted for The cost of beer is relatively high. According to the 2020 annual report of Tsingtao Brewery, the cost of beer is split, packaging materials (glass, aluminum ingots, corrugated paper) account for about 51%, and malt accounts for about 12%, which is relatively high. The Russian-Ukrainian war further pushed up global bulk prices. In the past 22 years, the global epidemic has gradually recovered from the epidemic, and the demand for bulk commodities has grown rapidly. The supply contraction due to the Russian-Ukrainian war has further pushed up the prices of agricultural products, non-ferrous metals and other bulk commodities, exacerbating inflationary pressures. China's commodity index rose to 203.05 in March, up 11% from the beginning of the year.

Barley has basically completed the year-round lock-in, and was less affected by the Russian-Ukrainian war. Our beer and wheat are highly dependent on foreign countries, with imported beer and wheat accounting for about 97%. At present, China Resources and Heavy Beer have completed the price lock of barley throughout the year, Tsingtao Brewery has locked the barley price until Q3, and beer companies have basically completed the price lock of the main amount of barley. Assuming that the barley price lock occurs at the end of the year, the price of imported barley at the end of 2021 will increase by about 20% year-on-year, and the corresponding ton cost will increase by about 2%.

The uncertainty of aluminum price in packaging materials is high. Affected by the conflict between Russia and Ukraine, the price of electricity in Europe was high, and European aluminum companies started a new round of production reduction, and the global aluminum price continued to rise. Domestic aluminum prices in March The price of aluminum ingots in March was 22,400 yuan / ton, a year-on-year increase of about 30%. The current epidemic affects production and transportation, the spot aluminum transaction volume is relatively small, and the price trend tends to be flat. For the whole year, as Yunnan enters the wet season in April, the supply and demand of aluminum is expected to improve. In response to the upward risk of packaging material prices, Chongqing Beer may take hedging measures, while China Resources and Tsingtao Brewery will increase the frequency of packaging material purchases to smooth the aluminum price; the glass bottle return rate is high and the cost pressure is small. If the cost pressure of packaging materials eases in the second half of the year, we expect that the 22-year ton cost of beer companies may increasesingle growth.

Beer companies have diversified measures to deal with cost pressures, and it is still possible to expect an increase in profits throughout the year. In addition to the direct material cost pressure, the rising crude oil price has also increased the upward pressure on freight costs. However, in the high-end development, beer companies have more ways to ease the cost pressure and ensure profits: (1) Direct price increase. Historically, direct price increases have mostly occurred in the off-season. However, with the increase in sales of high-end products, the profit at the channel end is relatively lucrative, and the catering terminal has always had a high price increase rate. This round of price increases is mainly to squeeze the profits of this link. If the cost pressure continues to increase, beer The company retains the possibility of continuing to raise prices; (2) optimization of the production end. Improve the use efficiency of raw materials and reduce waste; (3) Reasonably arrange production plans and shorten transportation routes. For example, the construction of Yancheng and Foshan factories for heavy beer is mainly to cooperate with Wusu's national supply; (4) Reasonable cost control and precise delivery. In order to promote the rapid development of high-end beer, beer companies all have relatively high sales expense budgets, and there is still room for control over the subsequent sales expense rate. Therefore, we believe that although the cost trend is uncertain, beer companies already have a variety of measures to hedge cost pressures, and their profits for the year can still be released.

5. Condiments: focus on demand repair, and select both deterministic and flexible targets

< p id="0RUVUV8N"> 5.1 21 years of experience in Davis double play, and now has passed the worst point

performance valuation double play, The worst time has passed. We split the performance and valuation of the sector. In 2021Q1-3, the growth rate of most companies in the condiment sector has declined, and it has rebounded from the previous quarter in Q4, while the sector valuation continues to fluctuate and decline. From the perspective of performance rhythm, the impact of community group purchases has diminished since the second half of 21, terminal demand has continued to recover, and the increase in raw material costs has declined marginally in 2022. We believe that the current segment has passed the low point of performance, and the low-base dividend has continued to be released since Q2. The growth rate of sector performance is expected to pick up. From the perspective of valuation, the current prosperity of the condiment sector is low, mainly because the epidemic has repeatedly intensified market concerns. We believe that as the current round of epidemic prevention and control has gradually achieved results and terminal demand has gradually recovered, there is still room for improvement in the sector's valuation level. . Overall, the condiment sector has passed the worst time.

5.2 Short-term attention to demand repair, community group buying channels release pressure

Consumption continues to pick up, focusing on short-term demand recovery. Under the influence of the epidemic in 2020, the macro economy will be under pressure, household consumption will decrease, and terminal demand will be weak. As the impact of the epidemic gradually subsided, consumption scenarios gradually recovered, consumer spending rebounded, and terminal demand gradually recovered. The recent outbreak of repeated epidemics in many places has restricted terminal consumption in the short term, especially for condiment companies with a large number of catering channels. Judging from recent data, the daily increase in the number of confirmed cases in Shanghai has gradually declined. We believe that the current round of the epidemic is expected to be brought under control in the first half of the year, and the demand side is expected to achieve marginal recovery in the second half of the year.

Community group purchases focus on cost-effectiveness, and product structure upgrades are hindered. The community group purchase channel focuses on cost-effectiveness. After the outbreak of the new crown epidemic, economic activities have been under pressure and consumer income has been affected, and the community group purchase channel has been favored by consumers. We compared the top-selling condiment items in several mainstream community group buying and fresh food e-commerce platforms. The unit price of popular products in community group buying is significantly lower than that of fresh food e-commerce, and the price of the same product on community group buying platforms is also lower than that of fresh food e-commerce. business. With the rapid expansion of community group buying channels, the proportion of low-priced products has increased, and the overall product structure upgrade of condiments has been hindered.

Squeeze channel profits in the early stage and disrupt the terminal price. In the first half of 2021, the community group purchase channel attracted customers at low prices, and the sales volume was booming. In order to increase income, some first-tier distributors of condiments supplied their inventory to the community group purchase channel, and the supply price was much lower than that of the second-tier distributors. The price of shipments to channels is even lower than the price of shipments to secondary distributors, resulting in damage to the profit margins of distributors, a major blow to the channel network established by mainstream manufacturers, and affecting the pace of channel shipments. In addition, the terminal price of the same item in the community group buying channel is lower, which disrupts the terminal price list, greatly squeezes the customer acquisition of traditional channels, damages the brand image and positioning, and weakens the price control ability of manufacturers. , which lowered the average terminal price and had a greater impact on short-term performance. The impact of community group purchases has weakened under the policy overweight, and attention is paid to the recovery of supermarket channels. With community group buying inThe problem of disrupting the market order in the rapid expansion has gradually been exposed, and policies to restrict group buying in the community have gradually been introduced, and regulations have been made on issues such as pricing confusion and restricting competition.

Under the policy increase, some group buying platforms are gradually withdrawing from the market, and community group buying has an impact on traditional channels. The impact is greatly diminished. Channel research shows that this year's Q1 community group purchase channel sales revenue fell by about 60% year-on-year. According to data from the National Bureau of Statistics, from January to February this year, among the retail sales of physical stores above designated size, the retail sales of convenience stores, specialty stores, specialty stores and department stores increased by 12.8%/10.3%/5.3%/2.1% year-on-year, respectively, a year-on-year increase of 21 years. (Compared to the two-year average in 19) the growth rate has accelerated. As the community group buying channel continues to shrink, we expect that the traffic in supermarkets will gradually recover in the second half of the year, and mid-to-high-end condiment companies that mainly focus on supermarkets are expected to experience a recovery in performance.

5.3 Cost pressure still exists, focus on price increase and gross profit improvement during the year

Cost pressure still exists, increase Marginal slowdown. Since the second half of 2020, the prices of some agricultural products have begun to grow rapidly. The main raw materials purchased by condiment companies include soybeans, soybean meal, wheat, molasses, and cabbage, etc. The rise in agricultural prices has lowered the gross profit of the condiment segment. In the first three quarters of 2021, the overall gross profit margin of condiments fell by about 6pct year-on-year. Looking at this year, the prices of raw materials such as soybeans and molasses, which account for a relatively high cost, are still at a high level, but the growth rate has dropped to a lower level, and the procurement cost of cabbage heads has dropped significantly. We expect the cost of raw materials to remain high in the second half of the year, but the growth rate will remain at a low level. For condiment companies, the pressure on the gross profit margin of the segment will ease in the second half of the year.

We will raise prices collectively at the end of 21 to ease some of the cost pressure. In 2021, condiment companies faced considerable cost pressure. Starting from October, all major condiment companies, led by Haitian Flavor, raised the prices of their products. According to the historical experience of price increase in the condiment industry, generally 3-4 years is the industry price increase cycle. The last round of condiment price increase was concentrated in the beginning of 2017, and this round of price increase is in line with industry rules. Judging from the price increase rate, the price increase rate of most companies is only single digits. We believe that the price increase rate of this round of condiments cannot fully cover the cost increase. Coping with cost pressures through delivery efficiency and other methods.

The price increase has been transmitted smoothly, and the terminal price has increased. Channel feedback shows that after the price increase of this round of condiments, the price is in a good pace, and the price has basically achieved in the first quarter of this year. Among them, leading companies such as Haitian and mustard have achieved good prices before the Spring Festival. Judging from the average shipment price feedback, mustard was shipped in January. The price has increased significantly month-on-month, and the channel's low-priced inventory has basically been digested a year ago. The remaining brands completed the smooth price in the first quarter. We expect that from the second quarter onwards, the incremental revenue contributed by each company's price increase will be reflected in the report.

The channel inventory dropped year-on-year, focusing on the improvement of the shipment rhythm. Due to the strong terminal demand for condiments in 2020, during the Spring Festival stocking period at the end of the year, the amount of goods received by dealers has increased, and manufacturers have also stepped up their efforts to suppress goods. After the Spring Festival in 2021, channel inventory is generally at a high level, and in 21Q2, it will enter the destocking cycle, and manufacturers will ship goods. Slowing down, dragging down the pace of performance. At the beginning of this year, the rhythm of manufacturers' shipments slowed down due to the price increase, the current low-priced inventory has basically been consumed, the rhythm of manufacturers' shipments has recovered, and the level of channel inventory has declined year-on-year. There is an acceleration, and the channel inventory is expected to fall.

No need to worry about the 5.4 pattern, the leader is Hengqiang

Cost pressure + weak demand accelerates the clearing of the industry, and the strong leader will remain strong. In 2021, under the dual pressures of rapidly rising raw material costs and weak terminal demand, the competition in the condiment industry will intensify, and the industry's net increase in registrations will decrease significantly. Leading enterprises have strong scale advantages, have buffer conditions in channel profits and expenses, and have stronger bargaining power in the implementation of price increases and cost control, and their operating advantages have been strengthened. Some small and medium-sized enterprises are difficult to cope with cost pressures and are passively cleared.

Grain and oil faucets enter the market, with different business styles, and the impact is controllable. Due to the different sales models of grain, oil and soy sauce, soy sauce sales require professional marketing personnel, and grain and oil companies cannot fully adapt. Arowana entered the soy sauce track a few years ago, and so far The performance is mediocre, the SKU has not increased, and only the main product is Wanzhuang black bean brewing. The sales of Totole's executive team have not landed. At present, only Luhua is endorsed by peanut oil, and the growth rate is relatively fast. From a product point of view, grain and oil companies' Soy sauce products are basically focused on high-freshness positioning, but the prices are relatively high. Compared with mainstream soy sauce companies, the products launched by grain and oil companies are less cost-effective, and they are mostly used as gifts for grain and oil. The impact of the pattern is controllable.

6. Dairy products: milk prices have fallen to a year-on-year range

< p id="0RUVUV9G"> 6.1 Upstream: Raw milk prices fluctuated and declined, and scarce pasture resources are still a must for dairy companies

National milk production is close to The growth rate of the liquid milk market has been rising for two years, and the growth rate of the liquid milk market has slowed down. From the perspective of supply, the national milk production has basically remained at 30 million tons per year since 2006, and maintained a small and steady growth of 0-2% before 2012. It is a key year for the structural adjustment of China's dairy farming industry. Affected by the withdrawal of retail investors and the rise in beef prices, the number of dairy cows and milk production in China both declined to varying degrees. From 2013 to 2019, due to stricter environmental protection policies, pasture testing and The cost of vaccines has risen, and the national milk production has fluctuated to a certain extent, and the increase has not been large. Since 2020, due to import restrictions, the demand for dairy products has been boosted after the superposition of the epidemic, and the domestic production growth rate has increased. From the perspective of the liquid milk market size, the 21st century At the beginning, the development of liquid milk in China ushered in a golden period, and the market size exceeded 300 billion in 2013. Since 2015, as the market has gradually matured and the growth rate has slowed down, the CAGR has been lower than 5% in the past five years. According to Euromonitor's forecast, From 2021 to 2025, the liquid milk market will maintain a slight growth of around 5%.

The feed price rises + the mismatch between supply and demand, the raw milk price rises, and the inflection point appears in September 2021, and the milk price fluctuates Down. In November 2020, the price of raw milk exceeded 4.0 yuan/kg, and it has continued to rise since then, reaching the highest level in the past five years at the end of August 2021. The long-term reasons are mainly due to rising feed prices + mismatch between supply and demand. In terms of inventory, Since 2010, due to the withdrawal of retail investors, the number of dairy cows in China has shown a downward trend, from 12.31 million in 2008 to 10.43 million in 2020, while the increase in unit yield has kept the overall milk output basically stable. come to see , the cost of raw milk is mainly the cost of feed, of which the core composition of feed is generally 40% corn, 20% soybean meal, 30% alfalfa and oat grass. Since the beginning of 2020, the purchase price of corn in my country has continued to rise, and it is still high and volatile. Similarly, after falling to a trough in May 2020, the spot price of soybean meal rose sharply. The high price in March 2022 nearly doubled compared with that in May 2020. It has fallen slightly recently, but it is still high. For alfalfa meal, its international spot price rose sharply in July 2019 and remained high. In the case of rising feed costs, upstream raw materials forced the price of raw milk from pastures to increase.

Large-scale dairy enterprises are making frequent moves, and the scarce pasture resources have become a battleground for dairy enterprises land. On the one hand, the rising cost of raw milk is a long-term trend. On the other hand, affected by natural geographical factors such as climate and topography, pastures are a scarce resource in my country. Therefore, in order to maintain cost stability and control upstream resources, pastures have become the layout of dairy companies. focus. Among the two giants, Mengniu acquired Shengmu High-tech, Zhongding United and China Shengmu, and its subsidiary Modern Dairy acquired Fuyuan and Zhongyuan; Yili invested in New Zealand Dairy Cooperative and Zhongdi Dairy, and its subsidiary Youran Animal Husbandry acquired SECCO. Star, Fonterra. New Dairy, which was attacking the whole country from the southwest, acquired part of the shares of Modern Dairy, Auscow Dairy, Huanmei Dairy, and Ausya Dairy; Bright Dairy, located in East China, took over Huishan Dairy and Bright Dairy. In addition, Beingmate, Meiji, Feihe and other dairy companies have also strengthened their milk source layout.

6.2 Downstream: The room for increasing liquid milk volume is sinking, and the price increase path is high-end.High growth of cheese track

The growth rate of white milk and yogurt at room temperature slowed down, and the penetration of white milk and yogurt at low temperature accelerated. my country's room temperature white milk market developed the earliest. According to Euromonitor, room temperature white milk reached a market size of more than 50 billion yuan in 2010. In recent years, with the maturity of the market + the substitution effect of low temperature and high-end, the growth rate of room temperature white milk has slowed down. , the growth rate in the past five years is 2-5%, and the market size in 2020 is 94.1 billion yuan. Both belong to the room temperature category. The room temperature yogurt was launched from Bright Mosleyan in 2010. Since then, with the launch of Mengniu Chunzhen and Yilian Muxi, this category has ushered in a golden period of development. In 2020, the room temperature yogurt market has grown in size. It exceeded 55 billion yuan, but the growth rate has also slowed down, with a growth rate of 13-25% in the past three years. In the low-temperature category, white milk has accelerated growth, from 6% in 2015 to 11.5% in 2019. In 2020, the market size will reach 36 billion yuan, and low-temperature yogurt will basically maintain a growth rate of 15-20%. In 2020, the market size will reach 499 million yuan. billion.

Volume: From the perspective of per capita milk consumption, my country's urban areas reach the level of 50% of Japan and South Korea, and my country's rural areas are about half of urban areas. There is a huge space to be penetrated, but the growth rate is slowing down. The per capita milk consumption in Europe and the United States is above 60kg/year, and the UK even exceeds 100kg/year, which is much higher than that in Asia. Japan and South Korea are at the forefront of the dairy industry in Asia, with per capita milk consumption around 30kg/year. The per capita milk consumption in my country's urban areas was 16.7kg in 2019, which still has room for growth compared with Japan and South Korea, but the growth is weak; the rural areas increased from 6.3kg in 2014 to 7.3kg in 2019, showing an upward trend year by year. Compared with urban areas in my country, Penetration is less than 50%. In terms of specific rural provinces, regional consumption is unevenly distributed, and provinces and cities with high per capita consumption, such as Inner Mongolia, Beijing, Qinghai, Shanghai, etc., have at least one of rich milk sources or economic potential. Overall, my country's liquid milk consumption still has room for volume growth, and rural areas need to be further penetrated.

Price: "Room-temperature product structure upgrade + low-temperature growth" provides an increase in the unit price of liquid milk consumption space. The per capita milk consumption of urban residents in my country is close to 20kg/year. This value has been relatively stable or even slightly decreased since 2013. In terms of specific provinces and cities, the per capita milk consumption of Xinjiang, Beijing, Inner Mongolia, Gansu and other provinces has reached 20kg/year. 30kg/year, close to the milk consumption level of Japan and South Korea. From this point of view, the future volume of my country's urban liquid milk market is weak and the space is limited. However, in terms of the unit price of liquid milk consumption, the per capita income of urban residents in my country is currently maintaining a growth rate of around 8%, and the long-term trend of consumption upgrading is significant. There are two upgrade paths for liquid milk consumption: product structure upgrade at room temperature + low temperature growth. The normal temperature structure is upgraded. Taking duopoly as an example, Yili and Mengniu both launched high-end organic milk after the basic pure milk, and then further launched upgraded new products for specific groups such as lactose intolerant and children. In addition, the growth of low-temperature fresh milk is also a long-term trend in the future. First, the price of low-temperature fresh milk is generally higher than that of room-temperature white milk. From the distribution of low-temperature fresh milk price bands, it can be seen that with the upgrade of product structure, the unit price is on the rise.

Global cheese consumption is leading in Europe and the United States. In terms of growth rate, the CAGR of cheese consumption in China from 2015 to 2020 is significantly higher than that in Europe, America, Japan and South Korea. The cheese market in Europe, America, Japan and South Korea started early. After decades of development, it has become saturated with slow growth in consumption, while the Chinese cheese market started late and is now in a golden growth stage. At present, the total consumption of cheese in China is about 1/18 of that of the United States, the CAGR of total consumption in the past five years is 14.4%, and the CAGR of C-end consumption exceeds 20%.

In terms of per capita consumption, China is far lower than Europe, the United States, Japan and South Korea. The long-term steady state is expected to be on par with Japan and South Korea, and the space can be seen 10 times. In 2020, the per capita cheese consumption in the EU and the United States will be as high as 15 kg/year or more, and the per capita cheese consumption in Japan and South Korea will remain around 3 kg/year all year round, while in China, this figure is only 0.28 kg/year. Because of the huge difference in natural eating habits between Asia and Europe, it is difficult to compare the per capita cheese consumption in Asia with that of Europe and the United States. China and Japan and South Korea are both Asian countries, and their eating habits are relatively similar. If the Chinese cheese market maintains a positive and healthy development, it is expected that the per capita consumption of Japan and South Korea will increase in the long run. Cheese consumption level is on par, space can be seen 10times. (Report source: Future Think Tank)

6.3 Outlook: Review 13- In the 14-year milk price cycle, the current round of milk prices has peaked and declined, which is good for the release of leading profits

Review of milk prices: the increase in this round of milk prices is comparable to 13-14 years The milk price cycle, but the growth rate is slightly slower, due to the relatively mild changes in the supply side, and the gradual release of pasture replenishment output to form a hedge. The core determinant of raw milk price is supply and demand. The domestic demand side has experienced a slowdown in growth since the high growth in the early 21st century. At present, the demand has stabilized. The main factors affecting the supply side are policies, climate, and epidemics. The milk price cycle from 2008 to 22 can be roughly divided into 8 stages. The changes in milk prices in each stage are rapid and slow. This round of milk prices has risen sharply and slowly decreased, from 3.57 yuan/kg in June 2020 to 4.38 yuan in August 21. /kg, the increase is comparable to that from May 2013 to February 2014. Milk prices increased from 3.44 yuan/kg to 4.25 yuan/kg, but the growth rate was slightly slower in this round, and then it has dropped moderately from 4.38 yuan/kg in August 2014. . The reason for the two rounds of milk price hikes is essentially a shortage of supply, but the growth rate of milk prices in this round is slightly slower, because the supply-side changes are relatively mild, and the output of pasture replenishment is gradually released to form a hedge.

Milk price outlook: The head pastures have a strong plan for replenishment, and this round of milk prices is expected to drop moderately. At present, the milk price of this round has peaked at the end of August 2021 and started to fall. Compared with the slump of milk price in 2014-15, we expect that the pace of this round of milk price fall will be more moderate. Due to the soaring milk price in 2013-14 and the low concentration of pastures at that time, many small-scale dairy farms lacked expansion plans and industry foresight, and blindly replenishing the stock led to a sharp drop in milk prices after peaking in 2014-15. From 2017 to 2018, environmental protection policies have become stricter and the cost of farm quarantine has risen, and many small and medium-sized farms have been cleared. At present, the concentration of large-scale pastures is high, and the head pastures have established deep binding with downstream dairy companies, and the replenishment action is planned. It is stronger, and the rhythm of replenishing production capacity will be relatively stable. Therefore, we expect that the milk price will return to a reasonable pace at a moderate pace after this round of peaking.

Review of Yili: Cost control + price increase + product structure upgrade, the gross sales difference increased instead of decreasing. Review the milk price cycle and the change trend of Yili’s gross sales gap. During the upward cycle of raw milk prices from 2009 to 2014, Yili absorbed the pressure of raw material costs through cost control + price increase + product structure upgrade. From 2011 to 2014, the sales expense ratio was 17-19%, and the remaining years were basically above 20%. After two price increases in 2010 and 2013, Yili's liquid milk revenue growth in 2014 was mainly contributed by price increases and product structure upgrades. As the growth rate of milk prices slowed down and peaked and fell, Yili's gross sales margin increased significantly.

Yili Outlook: The trend of product structure upgrading is becoming more and more obvious. Profit release. Yili’s liquid milk revenue increment and contribution split, in recent years, the increase has been mainly contributed by sales growth and product structure upgrade, and the contribution of product structure upgrade has increased year by year since 2017. This round of milk prices peaked at the end of August 2021 and began to fall. According to the review experience, the gross sales difference is expected to increase significantly in 22Q2.

7. Catering Industry Chain: Short-term Epidemic Catalysis + Price Increase Transmission, Long-term Stronger Stay Strong

7.1 Sector Pattern: High Growth Dividend on Track Released, the pattern is scattered, and the leading share is expected to increase

Quick-frozen noodle rice: The traditional quick-frozen noodle rice has reached the maturity stage, and the growth performance of the emerging quick-frozen noodle rice is optimistic. 1) The traditional quick-frozen noodles, such as quick-frozen dumplings, dumplings, etc., have reached maturity, presenting a “three-pillared” pattern of “three pillars”, “Sinian” and “Wan Chai Wharf”, with stock competition as the mainstay. 2) Emerging quick-frozen noodles, such as hand-cooked cakes, fried dough sticks, Cantonese noodles, etc., are still in the growth stage. Enterprises increase R&D investment, innovative SKUs emerge one after another, sales channels continue to expand, and intensive cultivation is sinking. The main players are Anjing Food, Qianwei Central Kitchen, etc.

Quick-frozen hot pot ingredients: During the growth period, the leader can enjoy the double dividend of track expansion and share increase. my country's quick-frozen hot pot ingredients industry has a relatively high growth rate, and the current market structure is fragmented. The main players are Anjing, Haixin, Huifa, etc.Moderately, there is still a lot of room for improvement. The competitiveness will come from the integration of product creation and sales channels to seize the commanding heights of the industry.

Frozen dishes: During the introduction period, the BC channel has sufficient growth momentum and considerable penetration space. The rise of quick-frozen dishes in my country is relatively late, and it is still in the introduction stage. Under the multiple growth drivers such as the intensified cost pressure of restaurants, the increase in the employment rate of women, and the upgrading of consumption, there is huge room for the future. From the perspective of the competitive landscape, the current industry concentration is extremely low, there are few large-scale and nationalized enterprises, and the industry presents obvious regional characteristics. expansion. On the whole, the market potential and opportunities for pre-prepared vegetables are huge, and supply chain capabilities and product power are the basis for new companies to win.

Frozen baking: During the introduction period, the demand side will reduce costs and improve efficiency, and the supply side will expand product categories + New channels. Frozen baking manufacturers are equivalent to the central kitchen of the baking industry, mainly providing standardized frozen semi-finished products for downstream baking stores. The industry was introduced from Europe and the United States. It started late in China. It is still in the blue ocean stage and the competition pattern is fragmented. With the increasing demand for cost reduction and efficiency enhancement in the downstream baking industry and the maturity of frozen baking technology, frozen baking has entered a period of rapid penetration, and the market mainly participates There are Ligao Foods, Nanqiao Foods, Gaobei Foods, Xunrong Foods, etc. Category + channel expansion provides growth momentum, and product R&D strength + refined channel operation builds core competitiveness.

Frozen food: a growth track of 100 billion yuan, with leading leaders concentrated and small and micro enterprises scattered. According to iiMedia Research, my country's quick-frozen food market will be worth about 139.3 billion yuan in 2020, with a double-digit CAGR in 16-20 years, and the industry has a high growth rate. In terms of the competitive landscape, according to Euromonitor, Sanquan Foods accounted for 19% of the market in 2019, CR3 was 41%, CR5 was 48%, and small and medium-sized manufacturers accounted for more than half of the market, forming a market where leading enterprises are centralized and small and micro enterprises are scattered. competitive landscape.

Frozen roasting upstream: The roasting market has a scale of 100 billion yuan, and there is a lot of room for improvement in per capita consumption. With the trend of consumption upgrading in my country, the adjustment of catering consumption structure and the change of life rhythm, the bakery market has grown rapidly. According to Euromonitor, the scale of my country's baking market has exceeded 200 billion yuan, and the growth rate has been in double digits in recent years; in terms of sub-categories, the consumption of bread and cake in 2020 will be 42.3 billion yuan and 97.3 billion yuan respectively, accounting for about 18%, 41%, the growth rate is basically the same as that of the bakery market as a whole. In 2019, the per capita consumption of baked goods in mainland my country was only US$24.6 per year, ranking in the bottom 25% of the world, far lower than the US$266.3 per year in France and US$182.6 per year in the United States, and also lower than the eating habits in mainland China. Other Asian countries and regions, such as Japan's US$161.0/year, Taiwan's US$99.9/year, and Hong Kong's US$76.3/year.

Baking ingredients, frozen baking: The baking ingredient market is maturing, and domestic alternatives are emerging. The frozen bakery market was growing at the right time. Baking raw materials include flour, oil, sugar, cream, fruit products, sauces, etc., which are widely used in cakes and pastries. According to the prospectus of Ligao Foods, the market size of my country's cream and fruit products in 2019 is 8.8-11.8 billion yuan respectively. , 2.5-3.4 billion yuan, and the sauce market scale increased from 1.188 billion yuan in 2011 to 4.385 billion yuan in 2017, with a CAGR of 24.32%. Modern baking was introduced into my country from Europe and the United States. In the early days, domestic baking raw materials were basically monopolized by foreign brands. After 2000, domestic brand raw material suppliers emerged rapidly, and domestic substitution emerged. In terms of frozen baking, due to technical conditions in the past, frozen baking has not been well penetrated in my country. In recent years, with continuous technological progress and increased demand for cost reduction and efficiency enhancement in downstream baking stores, frozen baking enterprises have emerged. Due to the certain technical thresholds of frozen baking, the large investment in the production line, the high requirements for technical and financial strength, and the small number of production enterprises, the more well-known frozen baked food manufacturers in the market are mainly Ligao Foods, Nanqiao Co., Ltd. , Xindi Jiahe, Black Rose, etc. The main companies of baked food raw materials include Weiyi Foods, Hairong Technology, Kewpie Foods, Fuji Oil and so on. (Report source: Future Think Tank)

Side 7.2International changes: cost pressure and price increase started, catalyzed by the epidemic in 22 years, and demand recovery has improved , the cost of the quick-frozen plate is under obvious pressure. The direct material cost of each company in the quick-freezing industry is relatively high, accounting for 50%-60% of the main business income. Affected by the epidemic and the general increase in commodity prices, the cost of raw materials, packaging materials and transportation for quick-frozen food has increased significantly. In terms of raw materials, the prices of soybean oil and molasses have risen rapidly since 2020, and the growth rates from 21Q1 to Q3 were 61%/54%/41% and 45%/34%/37% respectively. In terms of packaging materials, the prices of PET and corrugated paper rose from RMB 277,570/ton and RMB 3,756/ton in 20Q4 to RMB 391,640/ton and RMB 4,232/ton in 21Q3, an increase of 41% and 12.7% respectively. In terms of transportation costs, the global demand for crude oil continued to grow, the production capacity was insufficient, and the price adjustment of domestic refined oil showed a growth trend of “14 rises, 3 falls and 4 stranded”, and the cost burden increased.

Price increase start + demand recovery: both price and volume can be expected to increase in 22 years, but Need to be alert to the risk of excessive performance expectations. In 21Q4, a number of food companies announced price increases to cope with the burden of rising costs, but the announcement of price increases will require a certain time window adjustment period before the report performance improves. After reviewing Yasui's three price increases in the past, the apparent gross profit margin and net profit margin improved after 1-2 quarters and 2-3 quarters respectively. The first price increase in 2016H2, the 16Q3 gross/net margin was 25.9%/3.9% before the price increase, and the Q4 gross/net margin increased to 27.5%/5.5% after the price increase, and the net margin continued to increase until 17Q2. The 2nd and 3rd price increases also showed a similar price increase cycle. The performance improvement of the current price increase announcement was limited. After a period of adjustment, the apparent profit margin was improved. The peak season of the Spring Festival + the catalysis of the epidemic, the demand side is expected to usher in a recovery in 22 years, and both prices and volumes can be expected to rise. The Spring Festival in 2022 has entered the peak demand season, and this Spring Festival started earlier, and the stocking is ahead of schedule. The epidemic factors are superimposed, which will drive the demand to increase, and the superimposed price increase will be released. It is expected that both volume and price will rise. On the whole, it will take a certain period of time for the price increase to be implemented, and the positive contribution to the apparent performance is expected to appear in 22 years.

7.3 Key Company Analysis: Yasui Foods, Sanquan Foods, Qianwei Yangchu, Ligao Foods

Anjing Foods: BC takes into account + large single products, and pre-made dishes open up the second growth curve. 1) On the channel side, both BC and dual-wheel drive are used. From a long-term perspective, the B-end catering market has a trillion-dollar market, and the quick-frozen food space is broad; the C-end benefits from the epidemic, and the household hot pot consumption scene is sticky. Double-digit growth provides effective protection. 2) On the product side, Yasui and Mr. Frozen are combined, and surimi + rice noodles + dishes go hand in hand. The upgrading of product structure is accelerating, and the gross profit margin of fresh-packed products is relatively high and continues to explode. We believe that fresh-packed items are expected to grow into a large single product in the long run. The market for pre-made dishes is 100 billion yuan, and Mr. Frozen has opened the second growth curve. The company has clear ideas for product selection and marketing, actively deploys its own production capacity for pre-made dishes, and has fast innovation and research and development, and new products are implemented with high efficiency. 3) Under the real estate sales model, the expense ratio is strongly controlled, and the net profit margin increases steadily. The company accelerates its national expansion, and the capacity utilization rate is expected to be 95%-100% in the long term, and production is more intensive. The product structure upgrade drives the gross profit margin to increase, and the expense ratio is relatively stable. In the long run, it is expected that the net profit margin will increase. Looking ahead, it is expected that the company will maintain a relatively fast revenue growth rate of 25%-30% in the next three years. Profits are subject to short-term pressure due to cost factors, and the long-term growth rate is expected to be faster than revenue.

Sanquan Foods: Steady supermarkets, recovery of catering, and new products for Shabu and Bake + breakfast drive long-term high growth. 1) The growth of the retail market continued to be steady, the recovery of the catering channel accelerated, and the company's channel reform + market-oriented incentives enhanced the motivation of salespeople and dealers, driving rapid revenue growth. From the product point of view, the promotion of new products such as Shabu Rouhui is relatively fast, opening the second growth curve. 2) Benefiting from channel reform dividends + new product promotion catalysis, the long-term profitability is expected to increase. First, the company's continuous channel reform + market-oriented incentives drives management efficiency improvement, and the expense ratio continues to decline; second, the proportion of new products + high-end products continues to increase.Gross profit margin increased. 3) Looking forward to the future, the company is optimistic about the growth potential of the breakfast and home hotpot market in the long term. The company's green label expands the potential of catering channels and drives revenue growth. In addition, the high-end products of the company are expected to continuously improve the gross profit margin, the reform effect is deepened, the dealers' motivation is stimulated, the management and channel operation efficiency is improved, and there is still room for improvement in the non-deductible net profit margin.

Qianwei Central Kitchen: Catering will recover after the epidemic, and it is optimistic to drive the revenue growth of upstream quick-frozen 2B enterprises. With the increase in manpower, rent and other costs, the demand for cost control and efficiency improvement at the catering end is obvious, which forces the upstream demand for quick-frozen food catering. The company focuses on serving B-side catering customers, and is optimistic about the company's continued growth driven by strong R&D and customer advantages. With the normalization of catering in the future, and the implementation of fundraising projects to solve the company's production capacity bottleneck, we are optimistic that the company will continue to develop the quick-frozen B-end catering market.

Ligao Foods: Frozen Baking Fast Track, optimistic about the company's product innovation + channel customer resource advantages. 1) Frozen baking effectively reduces the labor cost of baking chain stores, supermarkets’ own baking, and restaurant baking, and has great potential for future growth. According to Euromonitor, the retail market size of my country's baking industry has reached 235.8 billion yuan in 2020. If the penetration rate of frozen baking reaches 39% of the application rate in the United States in 1961, then my country's frozen baking market space can reach 91.962 billion yuan. 2) In 2021, the three-year compound growth rate of the company's revenue and profit will reach 28.98% and 75.90%, maintaining rapid growth. Optimistic about the company's product innovation capabilities and the advantages of marketing resources close to the terminal. On the product side, the company continuously develops product formulas suitable for large-scale production with its perfect R&D system and high-quality R&D team, and has the ability to efficiently iterative innovation. On the channel side, go deep into 300 + cities, more than 1,800 dealers, and more than 380 direct sales customers. Products and channels are driven by two wheels, and it is expected to maintain rapid growth in the future.

(This article is for informational purposes only and does not represent any investment advice from us. For relevant information, please refer to the original report.)

Selected report source: [Future Think Tank]. Future Think Tank - Official Website

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Label group:[food and drink] [epidemic] [marketing strategy] [inventory costs

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