The Zhitong Finance App learned that Pacific Securities released a research report stating that it is concerned about rebalancing opportunities in the consumer sector. Chips have gradually been cleared in depth. Currently, holdings are at their lowest level in 20 years in history, and are already below the bottom of the 2016 Q3 liquor bear market. Judging from the valuation, the current PE (TTM) of the food and beverage sector is about 21x, at the 5% level in the past 10 years. Most double-digit growth companies have fallen back to the 10-20X range this year. Institutional holdings and valuations are at historically low levels. The sector's pessimistic expectations have been fully released, and the consumer sector has entered the rebalancing window after “undervaluation, low holdings, and low expectations”, and the layout value is prominent. Combined with the introduction of the “Fifteenth Five-Year Plan” to expand consumption, high-quality consumer assets with low congestion have a strong cost ratio.
Pacific Securities's main views are as follows:
The boom in mass sales of snacks continues, operational efficiency continues to be optimized, both store opening and same store improvements, and profit margins are flexible
Shuangqiang's opening schedule in the first half of the year exceeded expectations. As of July 20, Ming Ming was very busy signing more than 30,000 stores. It is expected that 26H1 will open more than 4,000 stores. The average single-store GMV has improved year-on-year. The average monthly GMV target for a single store is expected to be maintained throughout the year, and the efficiency of the high turnover and hard discount business continues to be verified. According to market statistics, the current number of Wanchen Group stores has exceeded 20,000, and the number of same stores improved in 26Q1. Currently, leading snack sales companies have optimized store models, member operations, and category expansion, and profit margins are flexible enough. The focus is on leaders with strong store expansion capabilities, store model optimization, and sinking penetration advantages. It is recommended to focus on Wanchen Group.
The logic of “channel adaptation+new product iteration” for casual snack brands continues to deepen
Brands with deep channel binding and outstanding product innovation capabilities, such as Yanjin Store and Weilong Delicious, continue to benefit from the channel volume of member stores, instant retail, and mass sales stores. The Yanjin Shop continues to expand its new offline channels, and deepens cooperation with Ming Ming is busy and other waist snack mass sales systems to create core exploits and increase SKU coverage. Looking ahead to the whole year, konjac revenue is expected to maintain a relatively rapid growth rate, and the share of revenue from high value-added products such as quail eggs is expected to continue to rise. As the impact of e-commerce adjustments subsides, and mass sales and quantitative distribution maintain rapid growth, revenue growth is expected to increase month-on-month. Currently, PE (TTM) is only about 15 times higher, making it highly cost-effective. Weilong's delicious channel restoration and new product innovation can be expected to be released in the second half of the year. On the channel side, the positive impact of the Q2 channel adjustments is expected to continue to be unleashed, and the performance of core channels such as mass marketing, KA, and CVS is improving; on the product side, vegetable products continue to be booming, and the market feedback on new products of stinky tofu, Dai flavor, and porcini flavored konjac is good, and it is expected to contribute new volume in the second half of the year. Recommended attention: Yanjin store and Weilong are delicious.
Upstream dairy cow production capacity has sufficient flexibility to recover profits, and the value of the downstream low temperature category is prominent
The bottoming of the milk cycle is compounded by an upward trend in the cow cycle, and profits from leading animal husbandry companies can be expected to be released. High-value-added categories such as low-temperature fresh milk and low-temperature yogurt are booming, and the structural growth momentum is clear. The new dairy industry is deeply involved in the low temperature circuit. Relying on the “Fresh Cube Strategy”, product structure upgrades and channel cultivation have achieved remarkable results. Low-temperature products account for more than 50% of revenue, and the proportion of high-margin and innovative products continues to rise. The company achieved continuous performance growth and improved profitability through innovation such as DTC channels. Recommended attention: New Dairy
Short-term disturbances will not change the main line of beverage scene recovery and multi-category platform-based growth
The effects of weather disturbances have subsided. Relying on the advantages of high-density channels, frozen displays, and “1+N” multi-category layout, Dongpeng Drinks is expected to benefit priority from scene restoration. The company's business resilience is outstanding. Shipments remained steady under short-term disturbances in Q2, compounded by year-round PET price locking, and continued to enjoy cost dividends. The medium- to long-term revenue center is expected to exceed 40 billion dollars: the core single product Dongpeng Special Drink is expected to replicate the potential of the Guangdong market, with a long-term target of 25 billion yuan; the second curve has considerable potential in the matrix of new products such as hydrating, fruit tea, and big names, and the overall scale is expected to reach 10 billion dollars; overseas layout is in Southeast Asia and other countries, with a medium- to long-term outlook of 5 billion yuan. Currently, PE (TTM) is only about 15x, at 3% since launch. Early adjustments have reflected a lot of pessimistic expectations and have strong layout value. It is recommended to focus on: Dongpeng Drinks.
Risk warning: food safety risks; increased industry competition; risk of rising raw material costs; new product promotion falls short of expectations; network development falls short of expectations.