This period was affected by the epidemic, which triggered a huge earthquake in the global capital market. The market is filled with all kinds of voices of bargain-hunting and financial crisis, but Little Cheetah is familiar with the fact that at present, it is not a decision to make a decision, but a judgment made by examining the logic of holding individual stocks.

instead of spending time predicting the ups and downs of the American stock market and the European stock market that night, it is better to study the fundamentals and industries of the company and understand the possibility of short-term recovery of the company's operations affected by the epidemic. If the epidemic only brings about the fluctuation of emotional panic, isn't it the happiest thing for us to pick up bargains calmly?

others are afraid, I am greedy, others are greedy, and I am afraid. This is determined by your ability, and it also determines your ability to outperform the market.

first of all, we can't predict when the inflection point of foreign epidemic will appear, but we firmly believe that human beings can definitely overcome this epidemic. Everyone should agree with this. If you don't agree, you won't have to read this article.

Hengshun vinegar industry is Zhenjiang aromatic vinegar, one of the four famous vinegars in China, and it is undoubtedly the first brand of vinegar in China at present. For the study of a company, Little Cheetah mainly includes five aspects:

First, trace back to the source, see the success and failure of the company's historical development, and study the place where the "roots" grow.

second, a good industry makes a good company, and is the vinegar industry track of good quality? Can resist the "crit" of Haitian and other bibcock?

third, heavy barriers are the core. What is the strength of the company's products?

fourth, look at expectations and dreams, can reform release kinetic energy?

5. Vaguely and accurately predict the future growth rate and valuation of the company's performance?

1. Tracing back to the source, understanding is based on the past.

investment is investing in the future, but the future is full of great uncertainty, and who can accurately grasp it? The research from the company's history will help us find the advantages and disadvantages of the company's past and find the certainty of the company's past. Please note that this is the past.

Hengshun vinegar industry has a long history of making vinegar, which was founded in 1841 in Qing Dynasty. It is an out-and-out time-honored brand with a long history, and this is the competitiveness of consumer goods. This kind of competitiveness is something that other competitors can't get through any channels in a short time, and it is also an irreplaceable differentiation ability. The famous brand with a history of over a hundred years has a high reputation.

In 2111, Hengshun vinegar industry went public. Hengshun, who entered the capital market, enjoyed the "dividend" of capital, and started various capital investments, including photoelectric products, real estate, construction and installation projects, etc. Looking back, it was such an unprofessional investment, and the company paid a heavy price for it, missing the rapid development of condiments for 11 years, and Haitian and Chubang also rode the dust.

in 2115, the company began to focus on the main business of condiments and divest various sideline businesses. The overall operation of the company gradually stabilized and its development began to return to the right track. The new production line is also under construction, and the past is not forgotten.

after 2115, regardless of the increase, the proportion of condiments in the company is close to 95% at present, and the gross profit margin has increased to the average level of condiments, which was 44% in the third quarter of 2119, which proves that the competitiveness of the company's products is relatively stable, and it can maintain a healthy growth after missing 2111, which is the performance of the company's turning point.

historical comparison of the data of Haitian flavor industry, the leader of condiment soy sauce:

If soy sauce and vinegar in condiment are compared, Haitian is the leader of soy sauce, with a market share of 21%, and Hengshun is the leader of vinegar, with a market share of 11%. In terms of market share, Haitian is twice that of Hengshun. In terms of revenue volume, Hengshun is 1.69 billion and Haitian is 17 billion, a difference of 11 times. The data is revenue in 2118, because Hengshun has not been announced in 2119. Of course, because the market space of soy sauce and vinegar is quite different, they can't be the same. However, in terms of revenue growth, Haitian is nearly twice that of Hengshun.

although the company is returning to the main business of condiment, as the company is a state-owned enterprise, it can be described as "indifferent" in the equity incentive of employees and executives. At present, no executive holds the shares of the company, while Haitian executives basically hold tens of millions of shares, and Chairman Pang Zong directly holds 251 million shares, which exceeds 31 billion. Moreover, the salary of company executives is negligible in the industry, with an average salary of 311,111 yuan, which is the annual salary, and Haitian Pang and others are basically 4 million yuan. It is difficult for a company without executives holding shares and whose salary is less than one thousandth of that of its peers in the industry to bind executives with the interests of the company.

here, do you think that the certainty of Haitian will be higher than that of Hengshun? Yes, that's right. Haitian flavor industry has high certainty. Because of its strong certainty, it is widely spread by the market, and its profitability will be greatly discounted. The Hengshun vinegar industry is likely to be criticized, or run out of expectations, or make beautiful profits.

analyzing the company's past "right and wrong" can help us better understand the company and know what the company has done and what it is worth looking forward to.

Second, the industry determines the company

Only the big industry can produce big companies, the trillion-dollar liquor industry can produce nearly one trillion Moutai, and the household appliances industry can produce hundreds of billions of gree and beauty. However, most sub-sectors of condiments belong to "small industries", and it is less likely that companies with a market value of hundreds of billions will run out. At present, Haitian Weiye is the only one in the industry (with a market value of 311 billion), and Zhongju Hi-tech, the second child of soy sauce, has a market value of only 31 billion, so it is not a dream to call for a market value of 111 billion, just like some big V. Don't be fooled into dreaming, remember "your life".

The particularity of the industry

We compared soy sauce earlier, but vinegar is different from soy sauce and has a strong geographical attribute, which is influenced by China's traditional food culture. Shanxi aged vinegar, Zhenjiang balsamic vinegar, Sichuan Baoning vinegar and Fujian Yongchun aged vinegar are the four famous vinegars. It can be said that there is no absolute leading enterprise in the vinegar industry. Although Hengshun vinegar industry claims to be the industry leader, its market share is only 12%.

It is extremely difficult to popularize vinegar nationwide. Every place has different dietary tastes, and it also belongs to the local cultural system. For example, Shanxi aged vinegar has a heavy taste, while Zhenjiang aromatic vinegar has a light taste, which is determined by local dietary habits. It will be futile for vinegar to be popularized nationwide in a short time.

By understanding this factor, we can draw the conclusion that Hengshun vinegar industry should be bigger and stronger, and it can't break into "other people's" territory from a large scale. Once you see that the company has this action, it is the logic of your firm selling.

upstream and downstream of the industry

The upstream of vinegar is mainly sorghum, glutinous rice and other crops, and the dependence on the upstream is not strong. The downstream is mainly catering consumption and household consumption, which is highly dependent on the channel. The catering channel has the first-Mover advantage, and the chef's mastery of his cooking skills and the way the master teaches his apprentices is easy to defend but difficult to attack. Household consumption, generally supermarkets and grocery stores, supermarkets are the most important channel, supermarkets often need to rely on promotion efforts to compete, including the location of goods, etc., there will be higher sales costs, and its stickiness is not as good as catering channels.

At present, Hengshun vinegar industry still has a large room for improvement in terms of channels, which will be discussed in the follow-up "Looking forward to dreaming".

industry space

the ceiling of the industry is how much room there is for the company's product market to grow before it becomes saturated. This is an index that we must study deeply before investing in a company.

industry space can be divided into incremental space and stock space. Incremental space is the growth of market scale and potential demand, and it is often necessary to see how big the cake can be now through the future, and extensive competition. The stock space is an optimal process, and it will often be that the strong will always be strong and win the family. Sometimes, judging the emergence of industry inflection point or demand inflection point will be the premise for us to obtain excess returns.

of course, if there is industrial upgrading or new demand in the industry, the long-standing ceiling of the industry will be broken, which will often bring continuous incremental space to the industry, such as automobile industry and mobile phone industry.

Back to the vinegar industry, vinegar is far from the ceiling of the industry at present, but with the upgrading of consumption and the improvement of people's health awareness, the industry is in the stage of coexistence of new space and stock space. Therefore, when we calculate, we need to calculate the increment and the stock market together, and then use the company's penetration rate or market share (combined with the room for improvement), so we can vaguely determine the company's growth space. The following will focus on the growth space of Hengshun vinegar industry.

In terms of incremental space

The compound growth rate of vinegar industry in the past five years is 18.7% (soy sauce is only 11% in the same period), which is a sub-industry that is still in the development stage in condiments. But whether the volume and price rise together, we need to analyze the industry model separately from sales volume and price.

according to industry data, the compound growth rate of sales volume in the past five years is 4.5%, and the price growth rate in the same period is 13.5%. It can be seen that the volume and price have indeed risen together, and the price is dominant. Due to the low per capita consumption of condiments, daily necessities, sales volume and price often do not become inversely proportional.

quantity: compared with foreign countries (Japan and South Korea), the per capita consumption of vinegar still has 2 times room for improvement. In comparison with domestic standards, consumption upgrades and superimposed catering continue to expand, and the trend of sales increase is strong, but it is unlikely to be promoted on a large scale. After all, changes in eating habits need to be subtle.

price: take the initiative to raise the price once every 2-3 years, and the success rate is extremely high. The optimization of product structure and the increase in the proportion of high-end products are indeed the development of the industry. This is the way that soy sauce has gone, and vinegar will be copied.

In terms of stock space

According to the data of China Industrial Information Network, there were more than 6,111 large and small vinegar enterprises in China in 2118, of which only 31% were brand enterprises, and the remaining 71% were small family workshops. Only Hengshun, Shuita and Zilin have an annual production capacity of more than 111,111 tons, among which Hengshun vinegar industry is the only one with an annual production capacity of more than 311,111 tons.

from the above data, we can get that the scale production of the industry is low and the concentration is low, which brings competition in the stock market. With the increase of people's income, health awareness and food safety awareness, the industry will move closer to famous and excellent brand enterprises, and it will be an excellent process. The upgrading of product structure will open up the subsequent growth space of the industry.

this chapter summarizes the past of Hengshun vinegar industry, and missed the decade of high growth of condiment industry. The company learned from a painful experience and returned to its main business, and will do its best to learn from the past. The reform of executive equity incentive is the later point of view, and binding the interests of executives is a precursor to becoming bigger and stronger. The industry has room for growth with both increment and stock.

Then the focus of the follow-up research of Hengshun vinegar industry will be:

1. Back to the company's fundamentals, what is the strength of the company's products?

2. What do you earn? Earn whose money? Can the business continue to expand?

3. The company is worthy of "dream expectation". Can reform release kinetic energy?