The Zhitong Finance App learned that Guojin Securities released a research report saying, how do you view the sharp decline in the sector last week? Catalytic factors: December data performance was relatively lackluster, and funding was volatile. The bank reiterated that the economic environment is low, the consensus on supply-side upgrade+efficiency improvement remains unchanged, and that the demand side pursues high-quality products with higher cost performance. Beer costs 5-12 yuan mainly in catering scenarios, low price sensitivity, and strong control by manufacturers, so upgrades are resilient enough. The 23Q4 loss reduction is a probable event. In 24, the corresponding profit side growth rate was 15-20%, and it has gradually entered the value investment range. The focus is on layout opportunities brought about by the excessive decline in sales in January-February under a high base, and attention will also increase as the peak season approaches.

The main views of Guojin Securities are as follows:

Tonnage outlook? According to the bank's judgment, the ASP growth rate will slow down in '24, but it will not fall back to 1-2%.

1) Looking at marginal trends, the 23Q3 ton revenue growth rate is +7.5% for green beer, +4.1% for Yanjing, +4.4% for Pearl River, +8.9% for Budweiser, and +1.1% for heavy beer. China Resources expects the 23H2 ton price growth rate to be in the middle to low order. In '23, the tonnage rate is expected to increase by more than 5% for green beer, +4% for China Resources, and +1-2% for heavy beer. Heavy beer is at different stages of development. Its own product structure is good and the tonnage price base is high. Usu is still in a period of adjustment. 1664 was heavily affected by the closing of stores at night. Its tonnage price growth rate does not represent the overall growth rate of the industry. Even in 23Q3, when demand was not booming enough, the tonnage prices of most of the taps increased by about a mid-single digit. The 23Q4 tonnage price growth rate cannot be linearly extrapolated to 24. Q4 fluctuated greatly over the years (low share of sales volume, confirmed sales discount at the end of the year). The policy has been successfully implemented in 24 years, and the probability that the economic environment will continue to deteriorate month-on-month is low.

2) From an industrial perspective, ① the supply-side, the logic of jointly driving upgrade+efficiency improvement has not changed. In terms of price, more than 15 yuan is greatly affected by spending power, and is mostly concentrated at night shows, and is heavily affected by the wave of nighttime market closures. Less than 5 yuan is concentrated on non-current drinks. Consumer income is low, price sensitivity is high, and it is difficult to raise prices. However, the price range of 5-12 yuan is less sensitive and mostly concentrated in restaurants (manufacturers have strong control), which is the most likely price range to be upgraded. ② On the demand side, consumption downgrade essentially pursues products with higher cost performance and lower IQ tax, rather than lower prices and lower quality. On the restaurant side, beer is less expensive than coconut milk, juice, carbonated drinks, Wang Laoji, etc., and the time cost is higher than drinks that need to go through processes such as saccharification, fermentation, and filtration. Over the past few years, many excellent high-end beer products have been created. They all use better ingredients (such as increasing the proportion of imported barley, eliminating sugar syrup), better packaging materials (such as pull ring caps, new glass bottles), and also provide more diverse taste choices. ③ Looking at the upgrade space, the leading tonnage price is expected to match Budweiser China's more than 5,000, and the high-end share is expected to move from the current 15-20% to Budweiser's 30% +.

3) Judging from the plan, each company's target for high-end single products in '24 did not decelerate significantly. China Resources maintained 15% + growth in '24, Heineken maintained a high growth of more than 20%, and SX and Pure Life had double-digit growth (SX replacement and upgrade +300,000 tons of local products upward integration). Heineken still maintained a healthy inventory in the core markets of Fujian, southern Zhejiang, and eastern Guangdong in 23, with a higher price list than Budweiser Classic, and a marginal sell-off ratio. The 24-year assessment will shift from a ranking system to a budget system and a survey system. Heineken is expected to develop at a higher quality.

Is the competitive landscape deteriorating?

China Resources's 24-year sales target (allowing the middle and low end to decline, and the total volume remains unchanged in KPI), the abolition of Budweiser's sales staff, and the stabilization of various sales rate plans in '24 all show that the industry's consensus on pursuing upgrading and efficiency improvement has not changed.

Investment advice: The bank reaffirms that the economic environment is low, the consensus on supply-side upgrade+efficiency improvement remains unchanged, and the demand side pursues high-quality products with higher cost performance. Beer costs 5-12 yuan mainly in catering scenarios, low price sensitivity, and strong control by manufacturers, so upgrades are resilient enough. The 23Q4 loss reduction is a probable event. In 24, the corresponding profit side growth rate was 15-20%, and it has gradually entered the value investment range. The focus is on layout opportunities brought about by the excessive decline in sales in January-February under a high base, and attention will also increase as the peak season approaches.

Liquor sector: At the level of market expectations, there is no shortage of expectations that have been revised to Spring Festival sales or less than last year. Last year's Spring Festival was a steep release of demand in the short term. From the differentiation in demand prices, mid-range alcoholic beverages, mainly self-drinking drinks, recovered the best, and demand was second highest or higher due to disruptions in consumption power and consumer sentiment. The bank believes that sales during the Spring Festival will remain stable this year. Based on factors such as having enough time for annual meetings, group gatherings, banquets, etc. this year, this year's increase is expected to fill the aforementioned gap. Judging from the fundamentals of wine companies, the bank believes that leading wine companies will get off to a good start and still have a high repayment rate, and that prices for core products in the industry are still relatively stable, and actual demand and channel sentiment have not fluctuated significantly. The bank still believes strongly in the ability of strong brands to cross the cycle. Currently, many wine companies in the sector have fallen back to about 15X in 24 years. The safety mat is clear. It is recommended to choose stable leaders, those with strong regional endowment targets, and those that focus on flexibility and high odds.

Risk warning: macroeconomic downside risk, regional market competition risk, food safety risk.