\u3000\u3000 Anhui Yingjia Distillery Co.Ltd(603198) (603198)
Main points:
A model of Baijiu liquor private system, a leading enterprise of ecological liquor
The company is one of the main representatives of Hui liquor and one of the few private listed liquor enterprises in the industry. The incentive system is flexible and sufficient, and the management and shareholders work in the same direction. Richly endowed by nature, China’s Mount Holyoke has its unique natural conditions. The company actively explores the “six in one” ecosystem and is the leading enterprise of Chinese Eco baijiu.
Hui liquor market is “one super and two strong”, and the mainstream price band is rising steadily
The scale of Baijiu market in Anhui is about 33 billion yuan, showing the Anhui Gujing Distillery Company Limited(000596) “one super”, Anhui Kouzi Distillery Co.Ltd(603589) and Anhui Yingjia Distillery Co.Ltd(603198) “double strong” head concentration pattern. Benefiting from the improvement of the economic strength of the province and the optimization of the product structure of Huijiu, the scale of products above 100 yuan has expanded rapidly, reaching 16 billion yuan in 2019. The capital Hefei is the market vane, leading the Baijiu consumption upgrading. The mainstream Baijiu consumption price belt in the province has risen to 200 yuan +, 300 yuan + price belt rapid rise, and 500 yuan + price belt is ready to go.
Comply with the upgrading trend of consumption in the province and make efforts to optimize the product structure
Anhui Yingjia Distillery Co.Ltd(603198) in line with the consumption upgrading trend in the province, the ecological cave collection series was launched in 2015 to continuously optimize the layout of medium and high-end products. The company uses the mode of “small business system + deep distribution” and “223” marketing strategy to stimulate the potential energy of products. Dongzang series has contributed 700 million revenue in 19 years, exceeded 1 billion yuan in 20 years, and is expected to continue high growth in 21 years. Among them, Dong 6 / 9, the leading product, occupies the price band of 150-250 yuan, undertakes the upgrading demand of mass consumption in the province, and Dong 16 / 20 respectively blocks the price band of 300 + yuan and 500 + yuan, so as to enhance the brand image and prospectively layout the sub high-end price band.
Intensive cultivation in the province has been carried out in an all-round way, and the expansion path outside the province is clear
The company adopts intensive cultivation strategy in the province to ensure “small area and high occupancy”. Taking Lu’an and Hefei as the benchmark, Tongling + Chaohu and Huaibei + Suzhou as the north and South wings to realize rapid expansion; Outside the province, based in East China, explore core markets such as Jiangsu and Shanghai, gather and form a national influence. In 2020, the revenue ratio inside and outside the province will be about 6:4, and the company will realize two wheel drive in the province and around the market outside Anhui Province.
Profit forecast and valuation
Anhui Baijiu market is gradually concentrating on the head brand. Anhui Yingjia Distillery Co.Ltd(603198) is taking measures to product, channel and brand ends. It is expected to grab the bonus of Baijiu consumption upgrading in Anhui province and maintain its own high speed growth. We estimate that the net profit attributable to the parent company from 2021 to 2023 will be RMB 1.36 billion / 1.696 billion / 2.059 billion respectively, with a year-on-year increase of + 42.7% / + 24.7% / + 21.4%, and the corresponding PE will be 41.2 / 33.0 / 27.2 times respectively. The “buy” rating will be given for the first time.
Risk tips
Baijiu intensified competition and regional expansion was not as good as expected.
