\u3000\u3000 Sichuan Swellfun Co.Ltd(600779) (600779)
Events
Sichuan Swellfun Co.Ltd(600779) release the annual performance forecast for 2021: in 2021, it is expected to achieve an operating revenue of 4.63 billion yuan, a year-on-year increase of 54.1%, a net profit attributable to the parent company of 1.2 billion yuan, a year-on-year increase of 64%, a sales volume of 11000 kiloliters, a year-on-year increase of 40.3%, and a ton price of 420000 yuan / kiloliter, a year-on-year increase of 9.8%; In the single quarter of 2021q4, it is expected to achieve a revenue of 1.21 billion yuan, a year-on-year increase of + 14.1%, a net profit attributable to the parent company of 200 million yuan, a year-on-year increase of – 13.4%, a sales volume of 2781.2 kiloliters, a year-on-year increase of + 6.3%, and a ton price of 435000 yuan / kiloliter, a year-on-year increase of + 7.3%.
Key investment points
21q4 company mainly controls goods and combs prices, and takes frequent high-end measures
1) October: from October to November, the company continued to control goods and sort out prices, and high-end wine group buyers were in the process of attracting investment; 2) November: at the beginning of the month, the company issued a letter to raise the price of the collection. It was suggested that the group purchase price of high-grade and low-grade collections should be increased by 50 yuan and 40 yuan respectively. At this time, the inventory of the old version was basically empty, and new products such as the national treasure Sanxingdui Memorial version) Sichuan Swellfun Co.Ltd(600779) · collection ice and snow version and Sichuan Swellfun Co.Ltd(600779) · Jingtai ice and snow version were listed. When the collection was out of stock, the approval price increased significantly. In addition, the company has increased large-scale job recruitment for high-end and Qionglai base; 3) December: more than 100 group buyers (mainly small businesses) have been recruited for the new collection recently. The new collection has gradually arrived and the products are being promoted in an orderly manner; 4) Spring Festival in the 22nd year: the performance of dynamic sales is stable and the inventory is healthy. At present, the Sichuan Swellfun Co.Ltd(600779) Spring Festival collection and delivery is in progress, and some dealers are expected to complete about 30% of the delivery before the festival. The recent approval price is relatively stable: the approval price of zhenniang No. 8 / Jingtai / new collection is about 330, 440 and 640 yuan respectively, and the inventory is also at a healthy level in one month.
In 2022, the high-end landing performance increased, and the growth rate slowed down in 21q4
We believe that benefiting from the implementation of high-end strategy and the simultaneous rise of product volume and price (zhenniang No. 8, Jingtai card, sub high-end liquor volume and price band, the sales volume and ton price in 21 years are + 40.3% / + 9.8% year-on-year respectively. According to the company’s announcement, the sales growth is all from medium and high-grade liquor), the company’s performance in 21 years has achieved high growth, exceeding the company’s annual performance target. In the single quarter of 21q4, the growth rate of the company’s revenue slowed down compared with the same period of previous years, or it was mainly affected by factors such as misplaced delivery and control of goods in the off-season; The slowdown in the growth of net profit is mainly due to the increase in the investment of pre expenses related to high-end and the increase in the expenses related to the employee stock ownership plan.
Looking forward to 22 years: the target of the new fiscal year is 30%, and the high-end will continue to be implemented
In 2022, the company will continue to focus on the collection and above products, so as to promote the brand value / price of zhenniang No. 8 and well platform and guide the price upgrading. We believe that the high-end effect of the company is expected, and the proportion of the revenue of collection and above high-end products is expected to increase from less than 10% to double digits, Main reasons: 1) gene: the company’s high-end gene is the necessary basis for realizing the high-end strategy; 2) Channel: the establishment of high-end liquor platform will effectively activate the channel and make the investment of high-end products more flexible. At present, the upgraded collection has been listed and is in the distribution stage. The high-end liquor sales company has attracted more than 100 dealers; 3) Marketing: make up for the weakness of previous consumer cultivation, take consumer cultivation as the current focus, and establish “Lion King Hui” to lock in opinion leaders and match the high-end strategy for circle marketing. Considering that the effect of high-end strategy will gradually appear, the medium and long-term development logic of the company is smooth.
Profit forecast and valuation
We believe that Sichuan Swellfun Co.Ltd(600779) will benefit from the gradual implementation of the high-end strategy (operate the high-end wine platform to promote the rapid development of products with a price of more than 700 yuan, strengthen consumer cultivation, establish Lion King Hui, etc.). At the same time, considering the low performance base of the company affected by the epidemic in 2020 and the company’s revenue / net profit target of 43% and 35% in 2021, The actual performance in previous years exceeded the original performance target, and it is expected that this year will exceed the annual target set at the beginning of the year. It is estimated that the revenue growth rate from 2021 to 2023 will be 54.0%, 27.2% and 21.8% respectively; The growth rate of net profit attributable to the parent company was 63.7%, 32.0% and 24.2% respectively; EPS is 2.5, 3.2 and 4.0 yuan / share respectively; PE is 40x, 30x and 25X respectively. In the long run, the performance has strong growth, the current valuation is cost-effective, and the buy rating is given for the first time.
Catalyst: continuous consumption upgrading and smooth introduction of high priced products;
Risk warning: the two outbreak of China’s epidemic situation affects the whole Baijiu sale of liquor. The sales of high-end liquor was less than expected; Management change risk.
