guideThe valuation of the industry is expected to be stable in 2023, and the sector still needs to return to the main line of performance growth, It is recommended to grasp the principle of certainty. We choose four main lines of food and drink trading strategies in 2023: one is to choose varieties with stable and upward fundamentals, and use leading spirits brands; A range of falling costs. The fourth is to pay attention to thematic investment opportunities, such as investment opportunities brought about by rural regeneration under a background of common prosperity.
Market performance: Food and drinks have underperformed the market since the start of the year, mainly due to the decline in valuation
Between January and November 2022, the food and beverage sector fell by 22.8%, underperforming Shanghai and Shenzhen 300 by around 9.8%, ranking low among the first tier sub-sectors. In terms of molecular industries, wine stands out (+11.6%), the only sector in the food and drink sector that has achieved positive returns. Beer (-3.6%) also fell less. Spirits (-24.9%) and dairy products (-27.6%) underperformed in the food and drink sector. From a growth rate perspective, the fall in stock prices is mainly due to the fall in valuation: RE from food and drink from January to November 2022 has fallen by 36.1% compared to the end of 2021, and the net profit in 2022 is expected to increase by 17.2%.
Quantitative view: the economy is still affected, and the demand curve is relatively flat
From a macro perspective, the epidemic will slowly recover from 2021, and the epidemic will spread in many places in 2022, which will have a greater impact on the economy. Moreover, the epidemic is still ongoing, and it has become an industry consensus that the economy will run at a slow pace throughout the year. In the first three quarters of 2022, GDP will increase by 3.0%, which is the lowest growth rate since 2021. At the same time, the social zero data in September continued to run at a low pace (2.3%), and the cumulative growth rate from January to September was 0.7%, and the fourth quarter is also expected to be low. situation. Overall, due to the impact of the epidemic, the macroeconomic environment has not yet shown strong growth, and the social zero data is also operating in a weak range.
Rhythm Review 2022: The epidemic is the biggest variable, showing a slowdown throughout the year
(1) From the perspective of the demand side, the first quarter is the traditional peak season for liquor consumption. During the Spring Festival, the national epidemic situation is well controlled, and liquor charges are usually paid. In the second quarter, the epidemic spread in Eastern China, and the sale of spirits was disrupted by the epidemic. According to the report, the second quarter also showed pressure. In the third quarter, during the peak seasons of mid-autumn and National Day, although the epidemic also affected, the payment collection end of the enterprise was carried out as usual, and the reports performed well, which reflected more pressure on the channel end.
(2) During the year, most mass market products face the problem of shrinking demand, and inventory has become a regulator for manufacturers to balance shipments and dynamic sales at this time. In the second quarter, under the low base effect, the company’s performance was generally good. In the middle of the year, enterprises considered completing the quarterly target and chose to increase inventory to complete the shipping task; in the third quarter, some companies slowed down their growth. We judge that the current demand of the industry is close to the bottom. Given the low base effect, looking ahead to 2023, the growth rate of mass products may be better.
The main line of the investment: continue with the main line of recovery of use and understand the principle of certainty
Looking ahead to 2023, the main investment in food and drink is to recover consumption. Affected by the epidemic, the economy will still run at a low level in 2022. After consumption weakens, from a fundamental point of view, we judge that the industry is already in the process of bottoming out. In the second quarter, many markets mainly in Eastern China were affected by the epidemic to varying degrees, which was mainly reflected in the limited demand for catering supply and logistics. In the third quarter, the epidemic was still spreading in many regions, and the peak season of Mid-Autumn Festival and National Day was affected by the epidemic. Against the background of the country’s increasing emphasis on the epidemic, we believe that the effect of the epidemic on consumption will be maximized within the year, and most sub-sectors should be in the process of recovery and improvement in 2023; Reasonable design of the range, the valuation of some companies has been lower than the average level in recent years. Assuming that the current policies do not change significantly, the valuation of the industry is expected to be stable in 2023, and the sector still needs to return to the main line of performance growth It is recommended to grasp the principle of certainty. We choose four main lines of food and drink trading strategies in 2023: one is to choose varieties with stable and upward fundamentals, and use leading spirits brands; A range of falling costs. The fourth is to pay attention to thematic investment opportunities, such as investment opportunities brought about by rural regeneration under a background of common prosperity.
Risk warning: risk of macroeconomic fluctuations, lower than expected consumption recovery, and fluctuations in raw material prices.
(Source: Kaiyuan Securities)
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