Investment advice
Anhui Baijiu liquor consumption upgrading is strong, and driven by high Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) , economic growth and consumption upgrading are more sustainable. We expect the high-end expansion to grow to 25%+ in the next 3 years. We believe that in this round of price upgrading, liquor enterprises with systematic advantages are more likely to win. We recommend Anhui Gujing Distillery Company Limited(000596) .
Reasons
Anhui is a large Baijiu production and consumption province, with strong consumption upgrading and strong sustainability. Anhui Baijiu is about 30 billion yuan, and many brands are separated. In recent years, Baijiu consumption upgrading in the province is strong. We expect that the high-end compound growth rate will reach 25%+ in the next three years, and the price of real estate will be the main competition. High Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) development drives this round of consumption upgrading, and economic growth and consumption upgrading are highly sustainable.
The development of the first mock exam has been developing for twenty years. We believe that the liquor is moving from a single price to a systemic competition. In the last decade, duojiahui liquor seized the opportunity of price expansion of mainstream single products and successfully broke through by relying on channel advantages. In this decade, only with the ability of systematic trading can we win. Gujing, which has a systematic competitive advantage, has a stable leading position, and the gap with longer is gradually widening.
Looking forward to the future, the potential energy of regional upgrading is still there, and the leading space of Huijiu is broad. The pattern of “one emblem” and “one super emblem” still enjoy the continuous upgrading of regional economic development and consumption dividends. We believe that Gujing sub high-end products have entered the harvest period, and the surrounding sector-based and pan national layout has initially taken shape. Compared with competitive products, it has significant systematic advantages, and the leading position in the province will continue to be strengthened. Anhui Kouzi Distillery Co.Ltd(603589) continue to enjoy the dividend of price upgrading, focus on the cultivation of secondary high-end, and steadily advance the reform. It is necessary to observe the implementation degree of the reform. The potential energy of Yingjia Gongdong reservoir remains unchanged. It is necessary to observe the promotion of provincial industrialization of medium and high-end products and the cultivation of sub high-end products for a long time.
Profit forecast and valuation
We maintain the Anhui Gujing Distillery Company Limited(000596) target price and outperform the industry rating, corresponding to 49 times / 38.3 times P / E ratio in 22 / 23, the current price corresponds to 40.5 times / 31.7 times P / E ratio in 22 / 23, and the target price has 20.9% upside space corresponding to the current price. Considering the impact of the epidemic on the market demand outside the province, we reduced the company’s revenue in 2021 by 1.7% to 12.707 billion yuan, reduced the net profit attributable to the parent by 19.6% to 2.335 billion yuan, and introduced the profit forecast of 2.961 billion yuan in 2022 and 3.789 billion yuan in 2023. Considering the marginal improvement of Anhui Kouzi Distillery Co.Ltd(603589) fundamentals, we raised the target price by 24.3% to 87 yuan, corresponding to 26.0 times / 21.6 times P / E ratio in 22 / 23, which has 14.5% upside space compared with the current stock price, and the current price corresponds to 22.8 times / 18.9 times P / E ratio in 22 / 23, maintaining a outperformance in the industry. Considering the impact of the epidemic on the company’s demand, we reduced the revenue of 2021 by 1.8% to 5.096 billion yuan and maintained the forecast of net profit attributable to the parent company in 2021; Considering the acceleration of consumption upgrading in Anhui Province, we raised the revenue in 2022 by 1.7% to 6.135 billion yuan, raised the net profit attributable to the parent company in 2022 by 3.4% to 2.002 billion yuan, and introduced the profit forecast of 2.412 billion yuan in 2023. Anhui Gujing Distillery Company Limited(000596) is recommended. It is recommended to pay attention to Anhui Kouzi Distillery Co.Ltd(603589) , Anhui Yingjia Distillery Co.Ltd(603198) (not covered).
Risk
The point like recurrence of the epidemic affects terminal demand, and the macroeconomic repair is slower than expected.
