Tianfeng Securities: The valuation of the food and beverage industry has entered a historically relative bottom range, suggesting attention to two major investment lines
I'm LongbridgeAI, I can summarize articles.Tianfeng Securities released a research report indicating that the valuation of the food and beverage industry has entered a historically relative bottom range, with fund holdings hitting a low. It is recommended to focus on two main investment lines: strong brands and elasticity. It is expected that by 2025, the industry will experience a situation of both rationality and aggression, with strong brand liquor companies such as Moutai and liquor companies with strong β attributes like VATS benefiting
According to the Zhitong Finance APP, Tianfeng Securities released a research report stating that the valuation/sentiment of the food and beverage industry has entered a historically relative bottom range, with fund holdings hitting a low. It suggests focusing on two major investment lines. It is expected that by 2025, the industry will experience a coexistence of rationality & aggression/consumption upgrades & downgrades, and under the potential policy & consumption positive catalysts, the performance of strong brand liquor companies that have deeply destocked may gradually bottom out and rebound.
Tianfeng Securities is optimistic about two main lines: 1. Strong brand line: Select strong brand liquor companies that can best grasp the "accelerated growth phase brought by structural changes in quantity & the concentration driven by high-quality capacity" (with the ability to stabilize through cycles), namely: strong brand targets with a rich product matrix & the ability to link upper and lower products. For example: Moutai (600519.SH); 2. Elasticity line: Select liquor companies and liquor distributors with low performance baselines & strong β attributes. For example: VATS (300755.SZ).
Tianfeng Securities' main viewpoints are as follows:
1. Baijiu: Bottoming in 2025, rebounding in 2025
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Review of 2024: Starting from the framework model, look at the industry status in 2024. The excess returns of Baijiu are mainly driven by performance, with the performance growth rate slowing down in Q1-3 of 2024 dragging down returns. Specifically: ① Demand side: In 2024, demand will face a "stress test," and the industry will enter a deep destocking phase; ② Supply side: Based on liquor companies' confidence in the future high-end market, leading liquor companies are still in an expansion cycle; ③ Industrial cycle: Entering an era dominated by "structural changes in quantity," 2025 may welcome an upward turning point; ④ Liquor company governance: The plan to increase the dividend rate of state-owned enterprises is positive, and the importance of management capabilities is becoming increasingly prominent.
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Reflection on 2024: Under the reality of weak β, the decline in high-end liquor demand has led to a greater-than-expected drop in the price of Feitian; the adjustment of sub-high-end liquor has exceeded expectations; while the expansion of mass price levels has exceeded expectations in terms of upgrading momentum.
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Outlook for 2025: Under policy catalysis, the clouds will part, and expectations will lead the way. The industry will enter three major phases: "accelerated growth phase driven by structural changes in quantity & high-quality capacity," "ensuring channel profits + terminal dominance," and "under policy stimulation, the prosperity may bottom out or reverse," with six major trends unfolding.
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Investment strategy: Valuation/sentiment has entered a historically relative bottom range, and fund holdings have hit a low. It is recommended to focus on two major investment lines. It is expected that by 2025, the industry will experience a coexistence of rationality & aggression/consumption upgrades & downgrades, and under the potential policy & consumption positive catalysts, the performance of strong brand liquor companies that have deeply destocked may gradually bottom out and rebound. We are optimistic about two main lines: 1. Strong brand line: Select strong brand liquor companies that can best grasp the "accelerated growth phase brought by structural changes in quantity & high-quality capacity" (with the ability to stabilize through cycles), namely: strong brand targets with a rich product matrix & the ability to link upper and lower products. For example: Moutai/Wuliangye/Luzhou Laojiao/Shanxi Fenjiu/Guqingongjiu/Yingjia Gongjiu/Jinshi Yuan/Zhenjiu Liduzheng, etc.; 2. Elasticity line: Select liquor companies and liquor distributors with low performance baselines & strong β attributes For example: VATS / JiuGuiJiu / SheDeJiuYe / ShuiJingFang / LaoBaiGanJiu, etc.
II. Beer: A Consolidating 2024, with Rising Volume and Price in 2025
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Reviewing the four major changes in 2024: low demand expectations, a decrease in CR5 concentration, a direct absence of low-end scenarios rather than upgrades, and a slowdown in upgrades (ton price dropping to 0-1%).
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Looking ahead to 2025: Prediction 1: Under the pro-cyclical trend, rising volume and price can be expected. Prediction 2: Barley still has dividends, with cost improvement lower than in 2024.
Stock selection: First choice is Qingdao Beer (the 2025 leadership transition is expected to open a new chapter).
III. Soft Drinks: An Exceeding Expectations 2024, More Differentiated 2025
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Reviewing 2024: Demand resilience exceeded expectations (tea and functional beverages are more prosperous), intensified competition in peak season, and high dividend valuations rising.
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Looking ahead to 2025: Water predicts that the 2025 landscape will still be competitive; sugar-free tea: the 2024 tea war, with 2025 expected to start clearing out, benefiting traditional leaders.
Individual stocks: It is recommended to pay attention to YiBao (2025 12X+ net profit margin improvement space is large), NongFu (2025 H2 profit turning point), BaiRun (new whiskey products)