\u3000\u3000 Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) (603369)
Events
On the evening of February 18, 2022, the company announced that it planned to invest 9076.1634 million yuan in the project of intelligent brewing storage center in the South plant area, including 851986.119 million yuan in fixed assets and 556.0315 million yuan in working capital, which will be invested in five years. The required funds will be raised by the company with its own funds and in combination with other financing methods.
Key investment points
With a total investment of 9 billion yuan to expand production capacity and invest in the project of intelligent brewing and aging storage center of Nanchang, the company plans to invest a total investment of 9.076 billion yuan for the project of intelligent brewing and aging storage center of Nanchang; Among them, the investment in fixed assets is 8.52 billion yuan and the working capital is 556 million yuan, which is invested in five years, from January 2022 to December 2026. After the completion of the project, it is expected to add 18000 tons of high-quality Luzhou flavor original wine, 20000 tons of high-quality elegant Maotai flavor original wine, 80000 tons of semi open wine storage and 210000 tons of taotan storage to the company; The company’s koji production capacity will reach 102000 tons / year. According to the established strategic layout, the company has expanded its production capacity, of which the annual production capacity of high-quality elegant Maotai flavor original wine is 20000 tons, which provides production capacity guarantee for V9.
Entering 2022 with high quality and implementing the “13445” policy
At present, the company is closely focused on the theme of “developing high-quality products and new wine margins”, firmly grasp the keynote of “good luck and quick pursuit”, follows the “543” development trend of liquor industry, attaches importance to strategic guidance, and resolves quality first, focusing on Baijiu‘s main business. In 2022, the company’s marketing will implement the “13445” policy: “1” refers to focusing on high quality and focusing on new leaps. “3” refers to the three modernizations strategy, highlighting differentiation, building core competitiveness, striving for high-end, seizing new competitive tracks, speeding up the full flower, and making a breakthrough outside the province. “4” refers to industry confidence, brand confidence, quality confidence and development confidence. “4” refers to deepening the four campaigns: 1) unswervingly, strive to improve the potential energy of V9 brand, promote supremacy, sell business, and have V9 first and then V series; 2) Improve quality and expand coverage, continue to strengthen the basic market of opening system, enlarge the popularity of brand reputation, improve the control and profit sharing system, and continue to promote regional intensive cultivation; 3) Highlight the characteristics and strengthen the effectiveness of Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) brand activation; 4) Take multiple measures at the same time to accelerate the market breakthrough of sectors outside the province, coordinate the layout of dual brands, build diversified sectors, and cultivate innovative new consumption. “5” refers to strengthening the five guarantees, upgrading the marketing organization (strengthening V9 business unit, establishing Guoyuan, Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) business unit and Gaogou sales company), increasing market investment, deepening process reform, implementing the business excellence plan and improving the incentive mechanism.
Equity incentive is expected to speed up the implementation. In the future, the company plans to use its own funds of no more than 518 million yuan to repurchase 6.6-7.7 million shares by the end of October, accounting for about 0.53% – 0.61% of the total share capital before repurchase; The company completed the repurchase on November 26, with a total of about 7.7 million shares repurchased, accounting for 0.6138% of the total share capital of the company. The average repurchase price is 56.24 yuan / share, and the total amount paid is about 433 million yuan. We believe that the equity incentive scheme is expected to accelerate the implementation.
Three highlights of the company in the future: first, the 10 billion target of V Series in the next decade, and the price band of 600-700 yuan for V3 and competitive M6 + advance card; Second, the 14th five year plan for Southern Jiangsu is expected to be nearly 4 billion, with large growth space in the future; Third, the proportion outside the province in the 14th five year plan accounts for more than 20%, and the expansion outside the province is a must for the company to open the ceiling.
Profit forecast
At present, the company is deeply promoting differentiation, high-end and nationalization, and fully implementing the V-series battle, K-series promotion war, Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) brand activation war and breakthrough war outside the province. Taking the Yangtze River Delta as the center, accelerate the formation of strategic sectors; Cultivate key markets with key regions of Beijing, Tianjin, Hebei, Guangdong, Jiangxi, Hunan and Hubei as the core; The market development of prefectures and cities adopts the interactive layout development strategy of cities, counties and districts, and the market development of counties and districts adheres to the “focus law”. Breakthroughs outside the province follow the regional expansion strategy of “comprehensive planning, key breakthroughs, surrounding radiation and echelon development”. We continue to be optimistic about the continuous improvement of the proportion of Guoyuan series, driving the continuous optimization of product structure. V series is expected to become the company’s new power engine and follow Su liquor to build surrounding sectors for a long time. It is estimated that the EPS from 2021 to 2023 will be 1.60/2.00/2.57 yuan, and the current share price corresponding to PE will be 34 / 27 / 21 times respectively, maintaining the “recommended” investment rating.
Risk tips
Macroeconomic downside risks, consumption dragged down by the epidemic, the growth of the four open sectors was less than expected, the growth of the V series was less than expected, and the expansion outside the province was less than expected.
