Gelonghui November 1st 丨Sauce-flavored Technology officially announced a price increase late at night, and Kweichow Moutai's stock price skyrocketed.

In terms of ETFs, Penghua Fund Liquor ETF, Yinhua Fund Food ETF, China Merchants Fund Food and Beverage ETF, Huabao Fund Food ETF, and Huaan Fund Food and Beverage ETF Fund rose more than 1.5%.

Kweichow Moutai announced last night that the ex-factory prices of the Takeoff Tien and Five-Star have increased by an average of about 20% today. Ex-factory prices are expected to be 1,169 yuan after the price increase. This means that 53-degree Flying Moutai ended the nearly 6-year factory price history of 969 yuan.

This price increase will help Moutai move towards 100 billion dollars in net profit. After the price increase, the market generally expects that it will have a great positive impact on Kweichow Moutai's dividends.

Ping An Securities said that Maotai's price increase strategy is steady and restrained, and this price increase will help boost industry confidence. Historically, Kweichow Moutai's price increase strategy was relatively restrained and steady. Even during the upward cycle of the industry in 2019-2021, it did not choose to raise prices. It avoided excessive price fluctuations from causing the industry to overheat, helping to stabilize market sentiment and demonstrating a leading style. We believe that this price increase is within a reasonable range, and after Kweichow Moutai raised prices, it also opened the ceiling for products with a price of 1,000 yuan, such as Wuliangye and Guojiao 1573, which will help boost confidence in the development of the liquor industry.

Huacheng Securities believes that the significance and impact of this price increase is that the company is operating more calmly and the industry ceiling is opening up.

First, for Maotai, after the price increase, the company's operating base card may be more adequate, and the operation may be more relaxed, and not easily deformed. The company may not need to increase generalization and non-standard performance, or it may effectively dispel concerns in the early market about the quality of next year's performance and whether the approval price can be balanced. It may also improve the channel profit mechanism, or resolve the current underlying fundamental risks and valuation suppression. The valuation is expected to rise to 30 times + in the short term.

Second, as far as the industry is concerned, the price ceiling has been raised again, driving the expansion of industry space, while for other wine companies and brands, there is more room and opportunity for price increases (for example, it greatly relieved the downward pressure on 1935 batch prices, which greatly benefited the upward development of the 1,000 yuan price band). It also gave channels and dealers greater confidence, which was conducive to increasing sector confidence and prosperity.

Third, as far as a higher level is concerned, the market has been calling for an increase in Maotai's ex-factory price for a long time. There are many difficulties in Maotai's price increase. Reasonably, unexpectedly, the significance behind this is not just a price increase and contribution to reporting, but rather a sign of a more market-based economy.

Since February 2021, consumer stocks have continued to adjust. Since this year, major consumer ETFs, consumer TOPETFs, consumer ETFs Shanghai, Hong Kong, and Shenzhen, consumer ETFs South, food ETFs, food and beverage ETF funds, consumer 50 ETFs, food and beverage ETFs, food and beverage ETFs, food ETFs, food ETFs, optional consumer ETFs, and food ETFs have fallen by more than 10%.

Recently, consumer industry expectations have improved. Judging from active equity positions in the third quarter of this year, active equity fund managers are increasing their holdings in consumer stocks.

Regarding the consumer industry, Wells Fargo Fund Wang Yuanyuan mentioned in the three-quarter report that the consumer sector has experienced adjustments since the beginning of 2021, and valuations have returned to the value range; combined with the adjustments since this year, the market no longer has high expectations for a recovery in consumption; instead, it has turned neutral or pessimistic, so overall, the consumer sector is already in a relatively low position of valuation and expectations.

Li Xiaoxing of Yinhua Fund pointed out that the current market is concerned about factors such as the demographic dividend and the slowdown in consumption upgrades. On the one hand, the growth rate of traditional industries has slowed due to the transformation of the domestic economy, which affects asset prices and future income expectations; on the other hand, fluctuations brought about by the economic cycle have led to more rational short-term consumption behavior. However, under the impact of various negative factors, overall consumption remains stable. After half a year of market adjustments, the valuations of many consumer companies fell back to a position where the central level was low in the 5-10 year dimension. Considering that in the current environment, the competitive advantage of leading companies has further increased, they will still maintain steady performance growth, and the current valuations are more cost-effective.