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Investment securities: the rise of high-end wine Confined public food
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We believe that there is still potential for the next 2 years, free white space. View product categories from 2004-2008 ultra high-end wine, the most prosperous in 2009, now plays the most beautiful high-end wine, the next 2 years is still second to none. The wine will be Relay in the end the deepening capacity for the future rise of mass consumption is inevitable. Plays down high-end enterprise product line will continue to enjoy the greatest benefit, with the capital strength and brand of low-end enterprise products may also be tight encirclement on the move, of course, price range of the terminal should also be improved, and capital strength and brand heritage will eventually led development of the industry pattern. In addition to food and beverage sector in 2010 rose sharply than alcohol, another phenomenon is the category listing of many new public companies, and is expected to be more and more, these companies have not listed so familiar to the everyday consumer goods began to move out brand the road, such as traditional food Fuling mustard, Hengshuncuye so condiment Angel yeast, convenient snack foods beverages Chengdelulou, contact contact food. We believe that the economic transformation after the increase consumption, especially consumption of second and third tier cities, will open the public food-grade brand a huge space. Holdings should be off-season white wine The current high-end liquor plate plate short term valuation of goods is not low, by the sound of liquidity tightening, or will be under pressure. Overall valuation of the current high-end product segment has reached 35 times in 2011, of which nearly 30 times the white line, second-tier liquor Gujing, Shanxi Fen is at the level of more than 40 times, Changyu valuations and high growth in the second liquor in line considerable level of Yanghe valuation. The current market in the government's repression of still higher inflation expectations and inflation the game under the incremental reduction in liquidity have a negative impact on high-end products. We are still optimistic about the mid-plate high-end products, the overall recommended holdings in the off-season stage, waiting for harvest season, including liquor, wine companies continue to perform market segmentation, efficient distribution, earnings growth is still more to determine the end of 2011 to 2012 There is expected to increase the performance of the valuation space. Which focus on two categories: First, in the late stage of development effort and have the brand and the capital advantage of the company, such as Shanxi Fen, etc.; the second is expected to improve performance or system companies, such as Maotai, Luzhou, Laobaigan Shuijingfang and so on. Maotai profit growth which will be higher, the low valuation of the old pits, has staying power, the ability Wuliangye growth rate of over 20%. For high-end class white wine, we think that the short-term valuations are high, but still worth the long-term bullish. We propose to hold the main short-term, to be dropped again when the valuation of holdings of the off-season. We will also be placed in the high-end wine Changyu, the maintenance of Changyu A "highly recommended-A" rating, as the representative of high-end wine, second and third tier markets will benefit from the consumption of long-term upgrade, the popularity of urban lifestyle, the next few years to maintain 25-30% of the profit growth are protected. In addition, high-end liquor in Shanxi Fen, Gujing Distillery, Yanghe is still the most established high-growth species, sub-leading high-end market has not ended, Yang has first mover advantage, the first follow-up depends on whether the management plan the next era; Fen and Gujing from 2008 until the end of force, momentum has yet to be released in the next 2-3 years is expected to surpass 40 billion market value of the Fen, old well beyond the 300 billion market value. Adequate capital reserves of the three, the future market can withstand the test of a complete product line, to develop products that meet the mass consumption era. Other species include Shuijingfang, gold seed wine, Laobaigan wine, Tuopai Liquor and so on. Shuijingfang mainly from DIAGEO approved and follow-up results of the acquisition is expected to rebound to bring the bottom of the trading opportunities, the Company acquired all the preparations for the event more fully, the local has been approved, notice has been almost no public opposition to the Chinese liquor test the water overseas is a good thing, we think the difficulty is not approved by the Ministry of Commerce, near the purchase price in the offer price can be configured, with a margin of safety. Golden wine will benefit from the seed of regional economic development, market depth distribution, performance is expected to maintain rapid growth, but the company's brand power is weaker, over-reliance on channel promotion, brand advantage in the late stage of the low-end consumer prices and the main channel a Red Sea pressure. Refinancing enrich the company's capital strength, but too much expansion of production capacity will be double-edged sword. Companies need to do more brand influence on reserves. Leading enterprises in the public food selection Logic of public goods investment has three main lines: 1, the choice of the sub-industry leader. We believe that additional high-end products because of their culture, so that industry shows the strong stronger and the weak are not weak pattern. But the public more fully competitive products, product homogeneity, the future must be the strong stronger and the weak out of the pattern of industry concentration continued to improve. Configure the various sub-sectors in the proven leading enterprises will enjoy the growth and integration of long-term gains. Meat, poultry, milk, beer and other consumer products most widely used, leading enterprises in the birth of the first, there is more room for future industry consolidation; fruits and vegetables (the biggest round of price increases of products), spices, food ingredients and additives industry leader is still in the early stage. 2, tap the regional quality varieties. Level of development of first-tier cities in China is already able to meet the modern country, the future upgrade of China's main consumer market must be the second and third line, the first root out the second and third tier markets continue to expand quality companies with potential. Such as composite seasoning industry is worth attention, the overall growth rate of 20-30% in the second and third tier markets are alternative dining and family trends in MSG, related businesses such as shares and ingredients production company Jialong technology will significantly benefit from Star Lake. 3, the focus changes in inflation expectations under the opportunity. Early because of the cost pressures of inflation expectations, often suppress the overall performance of public goods; price inflation is expected to appear later, there is pricing power of the leading enterprises respond to price increases, stock prices should be a stage performance; inflation expectations down point, section of the public goods will be the dawn of market, we believe that after the second quarter of 2011 deserves attention, particularly at the lower valuation of the beer industry. Profit forecasts and ratings According to third quarter results, we raised Wuliangye, Gu Yue Long Shan's 2010 forecast, Wuliangye valuation has certain advantages, we increase short-term rating of "recommended care", Shanxi Fen adjusted long-term rating to "recommended A", raised Tsingtao Brewery 2011 forecast, and raised short-term rating to "strong recommendation", cut Yanjing Beer, Jinfeng Wine, Bright Dairy in 2010 forecast.