On December 28, the dairy sector bucked the trend and rose. Maiquer successfully added the concept of large consumption for 6 consecutive boards. Sunshine Dairy once hit the daily limit of and , Panda Dairy, Manor Ranch, etc. also rose one after another.
In addition to the "pyrotechnics" driven by large consumption, the Shanghai Securities News quoted brokerage grassroots research as saying that the dairy industry is showing signs of recovery. Dairy product output achieved positive growth in November, with increasing by 4.5% year-on-year. Compared with the year-on-year decline of liquor, beer, wine, soft drinks, the signs of recovery of dairy products are more obvious.
Shenzhen Hong Kong Securities pointed out that the retail scale of my country's dairy industry has increased from approximately 365 billion yuan in 2016 to 471.4 billion yuan in 2021, with a compound annual growth rate of 5.25%. It is expected to reach 596.7 billion yuan in 2026. The continued growth of national demand is an important driving force. Even during the epidemic, 56.4% of the public increased their intake of dairy products.
The industry will also welcome the holidays "Pulse" boost
Recently, major cities around the world have entered the "breakthrough" mode of the epidemic. Dongxing Securities said that judging from the current epidemic news feedback in various places, first- and second-tier cities The epidemic is spreading faster, or the first wave of infection peaks will be completed before the Spring Festival. This will form a nationwide trend that the epidemic will have a greater impact on consumption in the first half of this year's Spring Festival, and consumption will gradually return to normal after the Spring Festival. It is expected that milk, gift boxed foods, etc. with stronger Spring Festival gifts this year will enter the peak consumption season after the Spring Festival.
Huachuang Securities also believes that judging from the performance of Beijing and other places after the epidemic peaks rapidly, the consumption rhythm is expected to be marginally improved in January. Among them, the dairy industry will experience the dual headwinds of weak consumption and lack of gift-giving scenes in 2022, and the growth rate of large single products will slow down. In the future, it should be based on the recovery of Spring Festival sales and gift-giving scenes. The overall valuation level is low, and the sector has allocation value.
Bank Securities also pointed out that overall, the fundamentals of the dairy industry are expected to gradually improve in the future, mainly due to: 1) increased consumer health demand in the post-epidemic era, and demand delays caused by short-term channel closures are only temporary problems; 2) the Spring Festival preparation period is in advance, and good performance is still expected in December; 3) raw milk prices continue to be in a downward channel.
Penetration rate of still has vast room for improvement
Looking at from the industry chain , the dairy industry can be broken down into three major links: dairy farming, dairy processing, and retail distribution. The upstream breeding industry has strong cyclical attributes. The pastures breed dairy cows and sell raw milk. The midstream is the dairy processing industry. Processing companies purchase raw milk or large packages of powder and produce them into liquid milk, milk powder, cheese and other products. Downstream, products are sold to consumers through multiple online and offline channels, with strong consumption attributes.
Soochow Securities pointed out that the development of my country's dairy industry chain is uneven. Midstream enterprises have strong processing capabilities, but the breeding and sales links are relatively weak. They specifically mentioned that there is broad room for increasing the downstream penetration rate of .
From 2016 to 2021, China's dairy retail sales will have a compound annual growth rate of 4.2%, reaching 442.5 billion yuan in 2021. After the epidemic, it has become a consensus that dairy products can improve immunity. However, in 2021, only 30.5% of the people will meet the dairy intake standards, and only 360 million people will insist on consuming dairy products every day. According to international benchmarks, my country's per capita milk consumption in 2021 is 10.04 kilograms, while Japan/the United States achieved 32.13/63.08 kilograms during the same period, indicating a broad space for penetration.
Looking at from a category perspective, room temperature white milk and yogurt will occupy the main market in 2021. In terms of growth rate, room temperature white milk and milk powder have grown steadily from 2016 to 2021; the yogurt and milk beverage market has achieved a compound annual growth rate of 7.7% on a high base; pasteurized milk has grown rapidly, with a compound annual growth rate of nearly 10% from 2016 to 2021; the cheese category has achieved a high-speed growth of 23.2%.
Looking into the future, Euromonitor predicts that the growth rate of E room temperature white milk/milk powder will remain steady from 2021 to 2026; yogurt and milk beverages/pasteurized milk will achieve a compound growth rate of 7.6%/8.4% under the trend of product innovative upgrades and functional nutrition enhancement; cheese will continue to maintain high growth, with an annual compound growth rate of 15.1%.
* Disclaimer: The content of this article is for reference only and does not constitute investment advice.
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