\u3000\u3000 Wuliangye Yibin Co.Ltd(000858) (000858)
Wuliangye Yibin Co.Ltd(000858) personnel adjustment is implemented, and management optimization is the big logic. According to the information on the official website of Yibin Municipal People’s government, on February 18, Yibin municipal Party committee announced Wuliangye Yibin Co.Ltd(000858) personnel adjustment. Zeng Congqin served as the Secretary and chairman of the group Party committee, Zou Tao served as the deputy secretary and general manager of the group Party committee, and Jiang Wenge served as the deputy secretary, vice chairman and general manager of the joint stock company. The retention of the core team can ensure the consistency of strategy and continuous control of the company. When he was chairman of the stock company, he had a deep understanding and rich experience in the Baijiu market. Therefore, the personnel adjustment is expected to introduce channel reform measures after landing. At present, the main contradiction in the Wuliangye Yibin Co.Ltd(000858) market is that the wholesale price is basically consistent with the ex factory price, and the channel profit is low. Therefore, compared with previous years, the company’s requirements for price this year are different. In the past, it is necessary to ensure the favorable price results achieved in recent years to restore the confidence of dealers. Usually, Baijiu enterprises may have potential measures to control prices: 1) control shipments: reference companies in 2019 and 2020 will take control of goods as a major measure of price increase, which has played an obvious role in promoting the price. 2) Market inventory: the channel feedback company has relaxed the channel supervision since the second half of 2021. It is expected that the phenomenon of fleeing goods and low price sales will be strictly monitored and assessed in the future; 3) Market expectation management: it is possible to emphasize price control through dealer meetings to improve dealers’ expectations of prices; 4) Reduction in areas greatly affected by the epidemic: for example, Henan may be reduced due to floods and the epidemic last year. We believe that Wuliangye Yibin Co.Ltd(000858) has the ability to achieve efficient channel control with the help of digital system, and the rating is expected to break through the 1000 yuan mark before the peak season of the Mid Autumn Festival.
The concentration of famous wines in the Spring Festival has been continuously strengthened, and the steady growth of mobile sales is commendable. During the Spring Festival, the demand for gifts and banquets of famous wines is just needed. Recently, we investigated a number of regional core dealers and terminal stores and reported that the biggest change in this year’s Spring Festival is that consumers’ active choice of famous wines has increased significantly, the market has accelerated to concentrate on famous wines, and most brands with weak brand strength have declined. In terms of subregions, Wuliangye Yibin Co.Ltd(000858) performed best in Shanghai, with double-digit growth in mobile sales according to channel feedback; Among the traditional strong regions of Wuliangye Yibin Co.Ltd(000858) such as Henan, Anhui, Guangdong and Hunan, Wuliangye Yibin Co.Ltd(000858) has further strengthened its market dominance in the 1000 yuan price band. During the Spring Festival this year, many large businesses have completed the payment throughout the year, and small and medium-sized businesses and specialty stores have also completed the preliminary task. The dealer inventory is slightly higher than last year, but it is also less than one month. It is expected that the overall dynamic sales will increase in medium and high single digits, and the wholesale price will remain stable under the stress test. It is valuable in the environment of weak overall consumption this year.
Problems left over by history are gradually solved, and multi catalyst promotes valuation and repair. At present, the valuation of Wuliangye Yibin Co.Ltd(000858) is significantly lower than that of Maotai and Laojiao. The delivery volume in 21 years is large and the rhythm is not detailed enough, resulting in unstable wholesale prices. At the same time, the market supervision is not strict under management changes, and there is a certain phenomenon of goods collusion, disturbing the market price. We believe that Wuliangye Yibin Co.Ltd(000858) the current market expectation is quite poor. Management changes have been implemented, and there are the following catalysts in the follow-up: 1) channel management measures have been launched one after another; 2) At present, the price of puwu in most regions is 970-980, and the price in Guangdong, Beijing and other places is close to 1000 yuan. After the price of puwu breaks through 1000, dealers will have stronger confidence and are expected to increase the unplanned group purchase volume, and the average price increase may exceed expectations; 3) It is expected that classic Wuliangye Yibin Co.Ltd(000858) will stand firm at 2000 yuan. According to the research, the cost of dealers will increase this year. At the same time, the delivery among regions is expected to be more balanced, and the delivery in high inventory areas may be stopped. Referring to the change of core management in Wuliangye Yibin Co.Ltd(000858) 2017, the former chairman Li Shuguang took office at the sugar and Wine Fair. Later, he put forward reform plans for the problems of extensive channel management and chaotic product system at that time, including focusing on core brands, paying attention to and expanding the recruitment of middle and grass-roots employees, actively attracting investment and optimizing quotas under the “hundred million” plan, showing the reform ability matching the leading position of the industry, After that, when the ex factory price remained unchanged at 739, the rated price increased from 740 yuan in February 2017 to 830 yuan at the end of 2017. The channel profit recovered significantly, and the channel thrust and purchase intention also became stronger. In terms of performance, Wuliangye Yibin Co.Ltd(000858) from 2016 to 2018, the growth rate of revenue was 13% / 23% / 33%, and the growth rate of net profit attributable to the parent company was 10% / 43% / 38% respectively. Although there is the impact of the recovery of industry prosperity, the accelerated growth of performance brought by the reform can not be ignored; In terms of valuation, in March 2017, the valuation of Wuliangye Yibin Co.Ltd(000858) / Kweichow Moutai Co.Ltd(600519) / Luzhou Laojiao Co.Ltd(000568) was 24 / 29 / 36 times respectively, and by the end of December 2017, the valuation of Wuliangye Yibin Co.Ltd(000858) / Kweichow Moutai Co.Ltd(600519) / Luzhou Laojiao Co.Ltd(000568) was 35 / 36 / 40 times respectively. The valuation of Wuliangye Yibin Co.Ltd(000858) was significantly repaired, and finally the share price achieved the double-click of performance valuation. We believe that Wuliangye Yibin Co.Ltd(000858) is expected to deduce the valuation repair market under the improvement of management this year, and benefit most from the trend of strengthening the concentration of famous wines.
Profit forecast and investment suggestions: maintain the “buy” rating. We estimate that the company’s revenue from 2021 to 2023 will be 67.1/77.6/89.1 billion yuan respectively, with a year-on-year increase of 17.0% / 15.8% / 14.8%; The net profit was 241 / 285 / 33.1 billion yuan respectively, with a year-on-year increase of 20.6% / 18.4 / 16.3%, the corresponding EPS was 6.20/7.34/8.53 yuan respectively, and the corresponding PE was 27 / 23 times from 2022 to 2023. It is highly recommended.
Risk tip: the global epidemic continues to spread, competition in the high-end wine industry intensifies, and food quality accidents.
