Huachuang Securities: Food and beverage beta bottom-building layout leading repair

The Zhitong Finance App learned that Huachuang Securities released a research report saying that the food and beverage beta has built a bottom, repaired the layout, and captured segmentation opportunities. The current industry position has reached a new low, and the bottom signal is gradually becoming a consensus. Currently, it is recommended to “sow” a number of high-quality blue-chip white horse stocks with fundamentals that have actually gone out of winter from the perspective of actual business quality and market position, but the stock price is still experiencing severe cold; second, seizing opportunities such as seizing flexible segmentation opportunities, yeast protein, algae oil substitution, and reform expectations are worth focusing on.

The main views of Huachuang Securities are as follows:

Liquor: Under the low Q3 base, the decline is expected to continue, and the report bottomed out at an accelerated pace. Liquor is still at its end of construction in the third quarter. Industry risks are fully reflected on the reporting side. Most liquor companies' statement adjustments are still greater than the actual decline in sales, and industry inventories, especially terminal inventory, continue to be eliminated. On the payment side, most wine companies continued to slow down the pace of payment and delivery in Q3, and channels no longer accepted pressure. The repayment process was generally slower than the same period in previous years. On the sales side, Q3 double sales fell short of expectations year on year and still fell by double digits. Only leading brands and some base type sub-high-end brands can have normal shipping turnover; in the scenario, high-end Maowu maintains steady sales under the current price system, and the business group buying scenario corresponding to the sub-high-end is still relatively weak, and the mass price range with household consumption is still somewhat resilient. Looking ahead, under a low base for the fourth quarter, some companies are expected to improve. Looking at the price, the reporting side of the 26Q3 Maotai and 100 yuan mass price wine companies is relatively more resilient, and other wine companies are expected to continue to clear out. For details, see the price breakdown:

High-end: Maotai remains relatively stable, and the old cellar is still being completely cleared. Maotai's Q3 revenue is expected to increase slightly by 0.5% year on year, and profit is expected to drop slightly by 3% year on year; Wuliangye's revenue/profit is expected to drop 25%/30% in Q3, and Laojiao Q3 is -50%/-70% year on year.

Base-type sub-high-end: Q3 continued to be cleared, and second-tier wine companies' statements were the first to be corrected. Fenjiu's revenue/profit is expected to be -18%/-25% YoY, Yanghe Q3 -30%/loss (approximately -340 million yuan), Furui Q3 +2%/-80% YoY, Jinshiyuan Q3 +10%/+12% YoY, and Jinhui Liquor Q3 -3%/-15% YoY.

Expansive sub-high-end: Q3 sales continued to be under pressure, and reports were cleared at an accelerated pace. It is expected that revenue and profit will be -25%/-300% YoY in Q3, and -20%/-50% YoY in Shuijing Fang Q3.

Popular products: Stable overall volume and internal segmentation. Total retail sales of social consumer goods were +0.6%/+0.4%/+1.1% year-on-year respectively in 7/8/9, of which food and beverage revenue was +1.4%/+1.1% year-on-year; the overall pace of consumption restoration in Q3 was still moderate. The recovery accelerated slightly in September, and the mass goods sector showed stable overall volume and internal segmentation. Looking at specific sub-sectors, the dual-stage preparation of dairy products led to continued steady recovery in demand, with liquid milk sales improving quarterly, compounding that the impact of tax payments weakened in the second half of the year, and the expected improvement in head profits; the soft drink industry was still under pressure, competition for traditional large single products intensified and growth slowed, and health categories such as sugar-free tea continued to expand; casual snacks picked up in Q3, and emerging channels such as snack sales and member supermarkets grew rapidly; demand in the food supply industry is still growing rapidly in Q3 It is lackluster, but leading companies have performed well. Among them, strong alpha companies such as Yihai and Yasui have maintained relatively rapid growth. In terms of cost, the cost trend of raw materials continues to diverge. Prices of PET, corrugated paper, soybeans, and fresh milk are rising year on year, while prices of sugar, pork, etc. are still falling year on year.

Dairy products: Revenue continues to increase steadily, and the impact of tax supplements is weakening. Demand for liquid milk in Q3 has been steadily recovered, and the impact of tax subsidies has weakened. It is estimated that Q3 Yili's revenue/profit is +3%/+0%, Tianrun +8%/+131% (disclosed), the new dairy industry +5%/+11% year over year, and Shuanghui -5%/-12% year over year.

Casual and functional food: Demand for soft drinks is under pressure, and snacks are improving month-on-month. In Q3, due to weak demand and increased competition in the industry, the beverage market was still under pressure. The growth rate of leading companies slowed down. Q3 Dongpeng's revenue/profit ratio was +3%/+1% year-on-year. Snack consumption improved slightly from month to month. Q3 snacks are expected to be -2%/-8% YoY, negotiation ratio +6%/+79% YoY (disclosed), and Ganyuan +7%/-20% YoY. Roasted Angel +15%/+17% YoY, Peaches and Plums -2%/-10% YoY. Supplements Xianle were -19%/-22% YoY (disclosed), Tomson +18%/+23% YoY (disclosed).

Condiments: Leading companies remain steady, and second-tier enterprises improve. In Q3, Haitian's revenue/profit is expected to be +1%/-7%, Zhongju +14%/+40%, Qianhe +15%/+20%, Tianwei +15%/+10%, Polaris +12%/+12%, and Mustard +2%/+0% YoY.

Frozen food: revenue-side resilience remains, and multiple factors disrupt profits. In Q3, Yasui's revenue/profit is expected to be +13%/+15% YoY, Richao +8%/-20%, Qianwei +9%/-15%, and Babi's -6%/-3% YoY, respectively.

Investment suggestions: Food and beverage beta bottom-up, layout repair, and seize segmentation opportunities. The current industry position has reached a new low, and the bottom signal is gradually becoming a consensus. Currently, it is recommended to “sow” a number of high-quality blue-chip white horse stocks with fundamentals that have actually gone out of winter from the perspective of actual business quality and market position, but the stock price is still experiencing severe cold; second, seizing opportunities such as seizing flexible segmentation opportunities, yeast protein, algae oil substitution, and reform expectations are worth focusing on. Let's take a closer look:

Alcoholic beverages: Accelerated clean-up, clear bottom, priority layout with clear markings at the bottom. In Q3, wine companies continued to reduce pressure and remove warehouses, and the industry as a whole was still in decline. Looking at wine companies from passive response to active adjustment throughout the year, the opportunity is that after Maotai's pricing stabilizes, it is expected to bottom out and stabilize. In terms of cycle rhythm, 26 years of active adjustment and acceleration of clearance; in '27, the inflection point gradually became apparent and gradually improved. Priority is given to Maotai, the leader that has gone through the cycle. Second, focus on Gujing and Jinshiyuan, where stocks are bottoming out at a relatively fast pace. The strategy focuses on the steady, moderate and positive operation of Wuliangye and Fenjiu, and Laojiao, a resilient variety with a low base.

Popular products: The dairy industry is stable and segmented. First, the dairy industry is preferred. The improvement in the dairy industry cycle favors downstream dairy companies, recommending Yili, Mengniu, and New Dairy, focusing on excellent and modern; second, segmentation and elasticity, with the core recommendation for Angel Yeast, which is driven by yeast protein acceleration, focusing on Jin Dawei, where El Niño catalyzes the accelerated replacement of algae oil, and Huiquan Beer, which is expected to be reformed; third, the food and beverage supply chain industry pattern has improved one after another, choosing the leading leaders Yihai, Yasui, and Haitian, focusing on Tianwei, Zhongzhu, and Qianhe.

Risk warning: Consumer demand declined after the holiday season, inventory digestion fell short of expectations, competition intensified, etc.