Here, first explain the logic of liquor stocks rising, and then discuss whether these logics will change in the future, and then come to the conclusion that liquor stocks can continue to rise.
The logic of liquor stocks rising is as follows:
Good performance. China people's income increased, liquor consumption demand surged, and consumption was upgraded. Consumers who originally bought loose wine and inferior wine began to buy brand-name wine;
The risk is small. The liquor industry doesn't need to invest a huge amount of R&D funds, and it can make money lying on its back only by brand equity, with little risk, which is also the reason why Buffett invested in Coca-Cola instead of buying technology stocks (if he is interested, he can search the book cash of liquor stocks, which is much higher than those with high debts).
Huge amount of foreign investment. Foreign investors like to buy consumer stocks. Recently, the United States has been printing money continuously, and foreign investors will definitely buy China assets more actively. Blue chip is an important part of the index compiled by global institutions. Due to multiple factors, foreign investors are more likely to pay attention to Kweichow Moutai and other stocks when investing in China.
Domestic funds hold a group. This is a common way for funds to play in recent years. Mainly in the context of the registration system, there is probably no high income without a group.
State-owned assets are happy to see its success. The appreciation of state-owned assets can make up for local debts and replace the proceeds from land sales. Therefore, we have seen that Maotai has increased by 50 times in five years, and no regulatory agency has saidno. In some underdeveloped areas, the share price has doubled through the reorganization of state-owned assets. Minjiang Hydropower is an example.
Will liquor stocks continue to rise in the future?
The biggest problem is that the current increase in liquor is huge, and the valuation is already very high (the dynamic price-earnings ratio of liquor has reached 64%). Can we continue to create the miracle of the previous five years? At present, my view is that as long as foreign capital keeps buying China assets like a scourge, liquor stocks will continue to rise strongly, at least at 202 1. Many liquors have started to raise prices to fight inflation, so the high dynamic P/E ratio is not a problem at present.