Hua Bin continues to increase its stake in ORG, approaching the disclosure line. After the market close on March 23, a block trade information revealed another side of the industrial capital deployment trend. On that day, a seat at Pacific Securities increased its stake in ORG through block trades, with the increase accounting for 0.62% of ORG's total share capital, using about 57 million yuan. From the trading seat, in December 2019, the Hua Bin system increased its stake in ORG by 0.94% through the same seat. It can be inferred that the buyer in this transaction may still be the operator of China Red Bull, the industrial giant in the domestic FMCG field, Hua Bin Group. If true, this is also the third increase by the 'Hua Bin system', and its holding in ORG has reached 4.6%. This ratio is one step away from the 5% disclosure line. ORG is the absolute leader in the domestic metal packaging field with the highest market share. Affected by the epidemic, ORG's stock price has suffered a heavy blow, falling to the historical lowest level since the end of 2013, with its market value falling below the 10 billion yuan mark. Even compared with the first half of 2019 when the 'Red Bull dispute' was most acute, the market value has fallen by about 30%. This may mean that the market is quietly building up momentum, waiting for the spring to come. According to data from Digital 100 Research, entering the 'post-epidemic' stage, FMCG, as an industry highly sensitive to consumer sentiment, is gradually recovering. Industrial capital deployment is undoubtedly aimed at seizing the 'first opportunity for return' of the industry. -01- Capital Deployment for 'First Opportunity for Return' On March 23, the A-share market saw another pullback. A new consensus among institutional investors is gradually forming: cash cow industries, especially finance, power, resources, and FMCG, have become the focus of institutional investment deployment. For example, recently, China Life, China Pacific Insurance, etc., have respectively increased their stakes in Agricultural Bank of China, Ganfeng Lithium, etc., and Taiping Life has increased its stake in COFCO Joycome. In terms of industrial capital increases, besides Hua Bin Group continuing to increase its stake in ORG, since March, more than 140 listed companies have implemented buybacks, including Gree Real Estate, Dong-E E-Jiao, HLA, etc. Among them, Dong-E E-Jiao, HLA, and COFCO Joycome are all in the FMCG sector. "The FMCG market was hit hard during the epidemic, but the consumer market is the most sensitive, so it is more likely to see a performance explosion after the epidemic." An investment director of a Beijing fund company pointed out in an interview. According to his logic, industrial capital increasing its stake in the FMCG industry at this stage is directly related to the current low cost. In comparison, the certainty of annual performance in the FMCG industry has a competitive advantage. Financial stocks have the function of safe haven. -02- Three-Dimensional Competition: Production, Transformation, and Distribution On another dimension, the layout competition in the FMCG industry is also quietly unfolding. In the market, with the impact of the epidemic easing, the return of consumption has become a battleground. In the first stage of resuming work and production, the FMCG industry, because it is closely related to people's livelihoods, has been at the forefront. At the same time, due to food safety issues, safe production has become the second threshold testing enterprises' ability to resume production. Reporter investigation shows that Red Bull, Mengniu, Xiangpiaopiao, and By-Health have all launched customized safe production procedures. As Red Bull's largest supplier, the market is most concerned about the resumption rate of its three factories in Hubei: Hubei ORG Can Making Co., Ltd., Hubei ORG Packaging Co., Ltd., and Hubei ORG Beverage Industry Co., Ltd., located in the High-tech Industrial Park of Xianning City, Hubei Province. According to sources, all three factories resumed production before March 11. Due to food safety concerns, all returning workers underwent nucleic acid testing. On one end is the race to resume production; on the other end, enterprises also face the potential impact of quietly changing market trends. According to people close to ORG, affected by the epidemic, consumer habits have driven up the canning rate of beer, and the substitution of canned beer for bottled beer has accelerated. Therefore, the main test in the later period is ORG's industrial integration capability after acquiring Ball Asia Pacific. In recent days, several leading brokerages, including CITIC Securities and Everbright Securities, have predicted that the dividend of the two-piece can market has not yet been released. Everbright Securities judges that in the next few years, the demand for metal cans will grow by about 10%. In terms of terminal distribution, since ORG's downstream customers are mainly beverage clients such as Red Bull, Tsingtao Beer, Budweiser, Coca-Cola, PepsiCo, Dongpeng Special Drink, Jianlibao, Amway, and Lulu, as well as food clients such as Yili, Feihe, and Junlebao, all of which are industry leaders with brand and channel advantages, these products are also the biggest beneficiaries during the FMCG recovery. -03- Everything is Ready, Who is the East Wind? According to institutional investors' investment strategies, they mainly seek 'hidden champions' based on industry logic. For market sentiment, it requires waiting for more triggering factors in the market. The current focus of market sentiment is investors' concerns about overseas crises and domestic policies, but the main expectation of bulls is that A-shares may decouple from overseas markets and become a 'safe haven'. According to Donghai Fund's research, A-shares decoupling from overseas markets still requires certain conditions; upward prosperity, domestic demand, and counter-cyclical efforts will be key factors, and consumption is its first recommended opportunity to find opportunities. In fact, affected by the epidemic, ORG's secondary market performance has continued to weaken. Compared with the most intense point of the Red Bull dispute in the first half of 2019, it has fallen by about 30%. After entering 2020, although the market generally expects that referring to the cases of Danone and Wahaha, the possibility of reconciliation between the two sides has increased, it still has not eliminated negative market sentiment, and ORG has continued to fall to historical lows. This also reflects the impact of the epidemic on investment sentiment. However, some institutions have pointed out that after ORG completes the acquisition of Ball, its production capacity will reach about 13 billion cans, and its industry capacity share is estimated to account for 21.73%, making it the largest enterprise in the two-piece can field. Therefore, they initiated coverage with a 'Buy' rating for ORG. Consensus has not yet formed. Affected by the significant pullback in Shanghai and Shenzhen markets that day, ORG fell another 3.42%, the lowest since the end of 2013. For now, the effect of the stake increase remains to be seen, but the east wind seems to be coming. Source: Securities Times, Author: Wang Xiaowei Tips will be paid 400-2000 yuan once adopted.