国投证券:食饮行业韧性十足 淡旺季明显 积极推荐竞争力变化的公司

SDIC Securities: The food and beverage industry is resilient and clearly actively recommends companies with changing competitiveness during the off-peak season

Zhitong Finance ·  Mar 3 19:17

China Investment Securities believes that sector valuations are still at the bottom, excellent companies can still have excess profits, and continue to recommend the sector.

The Zhitong Finance App learned that SDIC Securities released a research report saying that although the food and beverage sector has rebounded in the past two weeks, the market remains cautious. In addition to concerns about medium-term consumption, some investors have also raised concerns about changes in off-season sales. China Investment Securities believes that sector valuations are still at the bottom, excellent companies can still have excess profits, and continue to recommend the sector.

The main views of SDIC Securities are as follows:

Residents' demand for independent consumption can provide some support for total annual consumption, which in turn allows famous enterprises to repay and complete tasks. After the Spring Festival, the market's pessimistic expectations about consumption have been repaired, and market performance has also risen moderately. The bank believes that the characteristics of consumption in 2024 will be different from 2023. Overall, it will be more resilient, clearly differentiated, and it is more critical to grasp the pace and make bottom-up choices.

For trends and rhythms throughout the year: Very resilient, the off-peak season is evident. Since 2022, consumer consumption represented by banquets has become the undertone of consumer demand, and the resilience of demand is reflected in this. Residential consumption has obvious characteristics of the off-peak season. This type of consumption is more dependent on the number of people and the consumption atmosphere. It will explode more clearly during the holiday season, and it is difficult to meet such conditions such as scenarios, occasions, and crowds. The off-season performance is expected to be relatively lackluster. However, due to pessimism about consumer demand in the short to medium term, the relative inventory volume at the industrial level is low (compared to the financial strength of channels and terminals), which is reflected in difficulties in collecting payments and suppressing goods. The current inventory is more based on an assessment of one's own strength, and it is expected that the probability of a sharp drop or even collapse in off-season prices is low.

It is particularly important for manufacturers to control and guide prices. The bank expects this year's price stability to be stronger than in 2023, and the more important purpose of price increases is to protect the interests of channels and terminals. The bank still believes that being a weak brand would do more good, and that being a channel would be more valuable. The current industrial-level dilemma is that there is a lack of confidence in channels and terminals, and there are still thoughts of withdrawal (the problem of demand is a key contradiction and not something that companies can solve). In the light off-season, price control is particularly critical, and may be the key to adjusting relative brand value and forming consumer impressions. The bank believes that the maintenance and acquisition of channels and terminals is particularly important at this time. In addition to enhancing the brand image, the price policy should also consider channel interests more, maintain the integrity of its own channels, and even compete for more partners to enrich its channels.

The channel will generally be more positive: the channel side dares to negotiate with the brand, gradually changing from slimming down in 2023 to brand replacement in 2024, and squeezing growth is reflected in famous restaurants. Channel providers are not sensitive to policies. If you look at the long-term cycle, brands and channel parties have always been in a state of both cooperation and confrontation. In the upward phase of the industry, brands are strong, while in the downturn of the industry, channel players dare to negotiate or even resist. In 2023, dealers generally entered the de-branding cycle due to caution about demand, while the Mid-Autumn Festival in 2023 and the 2024 Spring Festival proved the resilience of demand. However, the channel side will become more active, but brands that cannot be monetized and have no way to make a steady profit will still not consider agents. Rapid channel expansion is unlikely to occur. It is expected that the phenomenon of replacing weak brands with strong brands will occur. At this point, it will show the squeeze between famous wines. At this time, who has good channel service and who has good price control will be the key to winning.

Risk warning: Food safety issues, increased industry competition, demand recovery falling short of expectations, rising raw material costs beyond expectations, etc.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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