The long-term positive trend of baijiu has not changed

A few days ago, except for Shunxin Agriculture, which did not announce the results of the liquor sector, the third quarterly report of 19 liquor listed companies was released
.
The 19 listed liquor companies achieved a total revenue of 256.
72 billion yuan, a year-on-year increase of 18.
15%; The net profit was 100.
024 billion yuan, a year-on-year increase of 21.
69%.

This all-round red three-quarter report is in stark contrast
to the recent "war situation" of liquor stocks.
Since October, the stock prices of liquor stocks represented by Kweichow Moutai, Luzhou Laojiao and Gujing Gongjiu have been relatively sluggish, and although they have recovered recently, the "collective decline of liquor stocks" is still a big news
in the capital market recently.

"Although the liquor sector has fluctuated greatly since October and the market sentiment is weak, based on the three quarterly reports and market performance, the fundamentals of the industry have not fundamentally changed, and the logic of upgrading the consumption structure remains unchanged
.
" Institutional sources said that after many rounds of cyclical fluctuations, they are still optimistic about the investment value of
liquor.

The performance is upward and the stock price is down

In the first three quarters, among the 19 listed liquor companies, 17 achieved positive revenue growth, and 15 achieved double-digit or more revenue growth year-on-year; Fifteen companies achieved positive net profit and achieved positive growth, and 13 companies
saw double-digit or more year-on-year net profit growth.

The revenue of 6 companies, Kweichow Moutai, Wuliangye, Yanghe Co.
, Ltd.
, Shanxi Fenjiu, Luzhou Laojiao and Gujing Gongjiu, exceeded 10 billion yuan, and the revenue and net profit increased by double digits year-on-year
.

Specifically, Kweichow Moutai still holds the top spot
.
According to the third quarterly report of Kweichow Moutai, the company achieved revenue of 87.
16 billion yuan in the first three quarters, a year-on-year increase of 16.
77%; The net profit was 44.
4 billion yuan, a year-on-year increase of 19.
14%.

Among them, the sales of Moutai liquor were stable, with an overall revenue of 74.
4 billion yuan, a year-on-year increase of 14%; The speed of series wines has increased significantly, and the revenue in the first three quarters has exceeded 10 billion yuan, an increase of 31.
6% compared with last year's
revenue.
In addition, Kweichow Moutai's new digital marketing platform "i Moutai" launched in April this year performed well, helping the company's direct sales share to increase significantly, and achieved alcohol revenue of 8.
46 billion yuan
excluding tax through the platform in the first three quarters.

Wuliangye achieved revenue of 55.
78 billion yuan in the first three quarters, a year-on-year increase of 12.
19%; The net profit was 19.
989 billion yuan, a year-on-year increase of 15.
36%.

Shanxi Fenjiu, which had the most obvious increase in revenue and net profit, achieved revenue of 22.
144 billion yuan in the first three quarters, a year-on-year increase of 28.
32%; The net profit was 7.
108 billion yuan, a year-on-year increase of 45.
7%.

Luzhou Laojiao and Yanghe shares also performed well
.
Luzhou Laojiao achieved revenue of 17.
525 billion yuan in the first three quarters, a year-on-year increase of 24.
2%; The net profit was 8.
217 billion yuan, which has exceeded the profit of last year, a year-on-year increase of 30.
94%.

Yanghe Co.
, Ltd.
achieved revenue of 26.
483 billion yuan in the first three quarters, a year-on-year increase of 20.
69%; The net profit was 9.
072 billion yuan, a year-on-year increase of 25.
78%.

"The overall operation of the industry is good, the operating performance of the head enterprises is particularly prominent, and the concentration of the liquor industry to the head is accelerating
.
" Industry insiders said that under the catalyst of the epidemic, the leading advantage of the head wine companies has been amplified, and the ability to integrate distributors, call on terminals, and "store water" in the market has made them have stronger anti-risk ability and the ability to gain market share than small and medium-sized wine enterprises, and the liquor industry is clearly
differentiated.

The overall performance of "actual combat" is good, but the performance of the liquor sector in the stock market is not satisfactory
.
After the National Day holiday, liquor stocks as a whole showed a downward trend, and the China Merchants CSI Baijiu Index fell by 21.
42% in the past month, of which the A-share leader Kweichow Moutai has recently fallen continuously, the stock price fell below the 1400 yuan mark, and the total market value fell below the 2 trillion yuan mark, once falling back to the stock price level
in mid-2020.

"There are two reasons why
stock prices continue to fall.
" Cai Xuefei, an expert in the liquor industry, believes that on the one hand, this year's epidemic has brought a great negative impact on alcohol consumption, although the performance of the head famous wine is not bad, but on the whole, alcohol sales are difficult and the inventory is too high; On the other hand, policy uncertainty has triggered the market's wait-and-see
.

"During the National Day period, the epidemic spread at many points, the peak season expectations were disappointed, and the inventory and cash flow pressure of dealers increased after the holiday; The early Spring Festival has caused some investors to worry about the Spring Festival collection that began in December; Many investors believe that at present, financial, liquor and other sectors may not be the focus of future policies, coupled with the fermentation of rumors of the 'alcohol restriction order', the short-term risk aversion of the sector has intensified; the net sale of funds in the north.
.
.
All these have had an impact
on the stock price of baijiu.
Industry insiders said
.

The institution remains positive

It is worth noting that since October, it is not the liquor sector that has fallen significantly, and many "white horse stocks" with halos on their heads in the past and some leading enterprises in the industry have also fallen significantly
monthly.
Compared with the three quarterly reports of these companies, the "actual combat" performance of listed liquor companies is significantly better
.
The market demand for liquor is still relatively stable, which has made many securities institutions have a positive attitude
towards the liquor sector.

Zheshang Securities Research Report pointed out that the follow-up structural flexibility opportunities for the head wine companies in the liquor sector still exist, and it is recommended to deploy the main line of strong Hengqiang such as Kweichow Moutai and Luzhou Laojiao, as well as medium-term low valuation but strong certainty of liquor stocks
such as Wuliangye and Yanghe shares.
East Asia Qianhai Securities believes that under the background of demand recovery, the third quarterly report of liquor is outstanding
.
The growth rate of high-end liquor in each quarter was relatively stable, showing strong resilience
.
Throughout the year, the resilience of high-end liquor is expected to be highlighted
.
Although demand replenishment in the peak season has been delayed, most of the sub-high-end and regional leaders have rebounded
significantly.
With the continuous improvement of terminal demand, the logic of the fundamental improvement of the liquor sector is expected to be gradually verified
.
According to data from Essence Securities, as of the end of September, among the top 20 with the highest proportion of fund holdings, food and beverage stocks accounted for 6 seats, namely Kweichow Moutai, Luzhou Laojiao, Wuliangye, Shanxi Fenjiu, Yanghe and Yili, all of which were listed liquor companies except Yili shares, which were consistent
with the second quarter.
Among them, Kweichow Moutai's holdings increased month-on-month, and the positions in the whole market remained the first
.
In addition, from the perspective of the number of funds held by individual stocks, among the top 10 funds held in the third quarter, liquor stocks accounted for 7 seats, which were Kweichow Moutai, Wuliangye, Luzhou Laojiao, Shanxi Fenjiu, Yanghe Shares, Gujing Gongjiu, and Jinshiyuan
.
"We believe that the disturbance of short-term external factors will only affect the rate of escalation, and the overall stable recovery of China's consumer market in the third quarter, with the continuous growth of residents' income and the people's continuous yearning for a better life, the direction of long-term upgrading is still highly probable
.
" ICBC Credit Suisse believes that from the perspective of consumption upgrading, the compound growth rate of the liquor industry in the past five years is 1.
2%, and the compound growth rate of price is 10.
3%.

From the perspective of China's liquor consumption structure, about 90% of liquor consumption is still concentrated in the middle and low-end price band, and the future high-end, especially sub-high-end liquor, still has broad expansion potential, and the long-term growth space is still relatively clear
.

China Wine Industry Association also joined hands with Kweichow Moutai, Wuliangye, Yanghe Co.
, Ltd.
, Luzhou Laojiao, Shanxi Fenjiu, Gujing Gongjiu and other six leading liquor enterprises to collectively voice: China's liquor industry is a fully market-oriented long-cycle industry, calling on the majority of investors and consumers to stand on a longer time axis, with a historical vision and long-cycle thinking of industrial development, rationally view the changes in the capital market, objectively analyze the development trend of the industry, reasonably adjust the basic investment strategy, and jointly shape a good industrial ecology
.

In this way, although the current capital market of the liquor sector fluctuates greatly, the fundamental trend of stable and good development of the liquor industry has not changed
.
As Song Shuyu, chairman of the China Wine Industry Association, said, "Long-term practice has proved that the economic situation of the wine industry is very consistent with the
national economic trend.
" In the future, the wine industry economy will seek steady progress, and maintaining steady growth is the general trend"
.

At the market level, the traditional peak consumption season of liquor is coming, "the market is still relatively optimistic about the fourth quarter, from the current differentiation trend in the first three quarters, high-end liquor may usher in a small sales climax
in the fourth quarter.
" For regional liquor that lacks brand and quality support, the fourth quarter will focus on digesting inventory and solving the problem of dynamic sales, but it may be difficult
to reverse the sales decline throughout the year.
Cai Xuefei suggested that some regional wine companies with differentiated competition characteristics can achieve corner overtaking by trying winery transformation or new retail model innovation based on new technologies
.

"China's wine industry has entered a new round of industrial adjustment, the industrial structure, product structure, market and consumption structure are facing changes and adjustments, only by deep thinking, pinpointing the crux, adapting to changes, and actively adjusting, can sustainable development
be achieved.
" Song Shuyu said
.

(Gu Yufei comprehensive arrangement)

China Food News (November 07, 2022 Version 04)

(Editor: Gu Yufei).