Zhitong Financial APP learned that Ping an Securities released a research report saying that reviewing the performance of baijiu during previous rounds of inflation, it was found that the baijiu sector led the food and beverage industry, often significantly outperforming the CSI 300 index, showing a steady growth trend of high-end liquor, the performance of sub-high-end liquor and real estate wine was significantly elastic, and Volkswagen liquor was less affected by external shocks. In the future, it is suggested that we should actively pay attention to policy changes, that liquor has the ability to pass through the inflation cycle, be optimistic about future performance, and suggest paying attention to three main lines: first, the national high-quality leader represented by Guizhou Moutai (600519.SH); second, the secondary high-end liquor enterprises that firmly open the national expansion strategy; and third, the regional liquor enterprises that fully benefit from the upgrading of consumption in the province.
The main points of Ping an Securities are as follows:
The first round of inflation: investment heat-driven revenue growth, specific taxes squeeze profit margins.
The first inflation cycle is from 2003 to 2005, which is mainly driven by fixed asset investment. The continuous upsurge of investment in this round of inflation has led to domestic economic growth. CPI and PPI increased significantly in the fourth quarter of 2003 and reached a peak in the third quarter of 2004. the domestic liquor government business consumption demand is exuberant and the liquor industry has entered a ten-year golden expansion period in short supply. In the level of revenue space, under the background of inflation, as liquor consumption is greatly affected by real estate and infrastructure investment, the growth rate of fixed asset investment leads to the growth of liquor revenue, and the growth rate of high-end liquor leads.
At the level of profit space, although the rise in raw material prices has little impact on the liquor industry, the volume-price compound tax policy reduces the production, sales and efficiency of the whole industry, resulting in the short-term performance of a large number of liquor enterprises under pressure. In order to reduce the impact of consumption tax, liquor companies have launched high-end products, at the same time, in the inflationary environment to create a good atmosphere for liquor prices, liquor companies have implemented product structure upgrading or direct price increases. However, due to the completion of brand building and structural adjustment requires a lot of cost, coupled with individual enterprises facing regional negative news and corporate structure changes, the profit margin level of wine enterprises fluctuates greatly. In terms of stock price performance, high-end wines achieved excess returns by virtue of strong fundamentals during the first round of inflation, while the share prices of sub-high-end wines, real estate wines and Volkswagen wines underperformed the CSI 300 index.
The second round of inflation: political and business consumption-driven liquor volume and prices rise, high-end liquor enterprises lead the performance release.
The second inflation cycle is from 2006 to 2008, mainly driven by demand brought about by loose monetary policy and the double heat of investment and export. The economic boom superimposed the prosperity of political and business consumption, which successfully contributed to the rapid development of the liquor industry. In the context of macroeconomic prosperity, high-end wine took the lead in raising prices, leading to a trend of price increases in the industry. At the level of revenue space, high-end wines continue to grow, while secondary high-end wines and real estate wines lead in elasticity.
At the level of profit space, the net profits of sub-high-end wines, real estate wines and Volkswagen wines declined under the influence of inflation, but all returned to positive growth within 1-2 quarters after the decline. the prosperity of political and business consumption has created a good environment for wine enterprises to increase the proportion of high-end wines, driving the overall gross profit margin of high-end and sub-high-end liquor enterprises to rise. Specifically, low-priced wines are more affected by inflation, while net profits of high-priced wines continue to grow, thanks to brand premiums and low price sensitivity of the target audience. From the perspective of stock price performance, except for the high-end liquor during the second round of inflation, the other price bands significantly outperformed the Shanghai and Shenzhen 300. In the later period, the overall valuation of liquor fell due to the financial crisis, and the benefit structure of high-end liquor was optimized. Davis double-click, the stock price performance leading the industry.
The third round of inflation period: 4 trillion to stimulate the rapid recovery of the industry, three public regulation of the industry under the deep adjustment.
The third inflation cycle is 2009-2012, and the 4 trillion investment plan has injected a lot of liquidity into the market. A number of policies related to fixed asset investment and infrastructure industry accelerate inflation. At this stage, the recovery of fixed asset investment promoted the activity of political and business activities, led to the recovery of the liquor industry, all prices with liquor revenue achieved significant growth, of which real estate wine benefited from the local real estate support performance growth led. However, with the introduction of the three public consumption restrictions in 2012, liquor consumption has been hit hard, and the liquor industry has entered a period of deep adjustment.
At the level of profit space agricultural products rose significantly under the background of inflation but had a limited impact on the gross profit margin of liquor. The gross profit margin of high-end liquor and public liquor increased slightly and the net interest rate of sub-high-end liquor and real estate wine increased. In terms of stock price performance, during the third round of inflation, liquor at all prices outperformed Shanghai and Shenzhen 300. Real estate wine benefited from the support of local real estate policies, rising more than other price bands, followed by high-end, Volkswagen liquor, and the last high-end wine.
The fourth round of inflation: the upgrading of consumption opens a new era of liquor, and the sub-high end leads the structural growth of the industry.
The fourth inflation cycle is from 2015 to 2018. There is a significant scissors gap between PPI and CPI. The upside of PPI is mainly driven by capacity loss in the industrial sector. At this stage, the driving force of economic growth changed from the original investment-driven and export-driven to domestic demand-driven and consumption-driven, the proportion of mass / business consumption increased, and consumption upgraded to become the driving force of the liquor industry. the industry gradually transitioned from the incremental era to the era of stock competition. At the level of revenue space, the revenue of liquor continues to grow at all prices, and the growth rate of high-end wine and sub-high-end wine is better than that of real estate wine and public wine.
At the level of profit space, sub-high-end wine is the first to recover and leads the industry, the net interest rate of high-end wine and real estate wine shows a fluctuating upward trend, while the performance of Volkswagen wine net interest rate lags behind. Mass consumption driven by rising consumption in the context of inflation is the main driving force of the upward trend of net interest rates. Judging from the stock price performance, the recovery of liquidity and the strengthening of consumption during the fourth round of inflation led to a rebound in the industry boom, enabling the overall growth of the plate. High-end wine, sub-high-end wine, real estate wine and Volkswagen wine all outperformed Shanghai and Shenzhen 300. High-end wine and sub-high-end wine rose higher than other price bands, mainly due to strong fundamentals.
The profit of liquor is little affected by inflation and achieves excess income relative to the market.
Due to the low proportion of raw materials, prominent industrial status and strong bargaining power, most liquor enterprises show the trend of "quantity stability and profit increase" during the period of inflation, that is, the gross profit margin and net profit margin are the same or higher. Through a review of the bank, the following conclusions are drawn: 1) the profitability of liquor is less affected by inflation, and the industry is in the squeezing growth stage of volume reduction and price increase. 2) the price of liquor is significantly affected by macro-economy and policy, and is greatly affected by fixed investment and real estate industry. 3) during the period of inflation, liquor often shows excess returns relative to Shanghai and Shenzhen 300. 4) during the period of inflation, the performance of different prices of liquor is different, and the high-end liquor tends to show the strongest alpha.
Investment advice:Pay attention to three main lines: first, the nationalized leading liquor enterprises represented by Guizhou Moutai recommend Guizhou Moutai; the second is the secondary high-end liquor enterprises that firmly open the national expansion strategy, recommending 600702.SH and Shanxi Fen Liquor (600809.SH). Third, fully benefit from the provincial consumption upgrading of regional wine enterprises, recommend Gujing tribute wine (000596.SZ), pay attention to Yanghe shares (002304.SZ), today's fate (603369.SH), welcome tribute wine (603198.SH) and so on.
Risk Tips:1) Industry policy risk. 2) the downward risk of the prosperity of the liquor industry. 3) the industry competition aggravates the risk. 4) Food safety risk.