\u3000\u3000 Anhui Gujing Distillery Company Limited(000596) (000596)
Ping An View:
Baijiu consumption has been upgraded rapidly, and the pattern of "one exceeds two" is stable. Anhui is a large province of Baijiu production and marketing. The scale of production in 18 years is fifth in China and second in online consumption. In recent years, Anhui's economy has developed rapidly, and per capita disposable income and per capita GDP growth are in the leading level in the country. Baijiu consumption and consumption level have been rising. The mainstream Baijiu price belt has been shifting up and the secondary high-end expansion is accelerating. We expect that the high-end scale of Anhui will be exceeded by billions in 2024, and the overall market size of Anhui is expected to reach 40 billion. The expansion and upgrading of the market attracted the first-line famous liquor and popular liquor from other provinces to enter the market one after another, seizing the market share of local liquor and breaking the original semi closed market. At present, the province is in the pattern of one super and two strong under the leadership of Gujing, a regional leader, Anhui Kouzi Distillery Co.Ltd(603589) and ranks in the second echelon. In the future, driven by the improvement of consumer brand awareness, the pattern in the province will accelerate differentiation and the concentration of head liquor enterprises will be further improved.
Anhui real estate wine leader, brand fees are high. Anhui Gujing Distillery Company Limited(000596) is one of the eight old famous wines. With its unique taste, the enterprise has won the awards at home and abroad for many times. It is deeply favored by consumers and takes the lead in brand value. The company has ranked the top three in 7 consecutive years, and then implemented the diversified development strategy and the low price strategy. Now it is back to the right track under the management reform, focusing on Baijiu main business development, and ranked sixth in the industry's revenue in 2020. Gujing adopts a multi-directional and high investment marketing strategy, and its sales expenses rank among the top among all wine enterprises. It not only opens the precedent of high-speed rail body advertising, but also sponsors the Spring Festival Gala, high-end conferences, participates in the global wine culture tour and other activities for seven consecutive years, continuously improves the brand tone and strengthens the shaping of high-end image.
It mainly promotes the "142" product matrix, with full coverage of high, medium and low prices. At present, Anhui Gujing Distillery Company Limited(000596) product structure has formed a product matrix represented by "142", covering high-end, sub high-end, medium and high-end and popular wines. Among them, "1" refers to the super high-end image single product Gu 26, plus 1000 yuan price band, benchmarking Feitian Maotai and other super high-end famous wines. "4" refers to the sub high-end strategic products Gu 8, Gu 20, Gu 16 and Gu 7. Among them, Gu 8 and Gu 20 have become the mainstream sub high-end single products in the province, competing with Anhui Kouzi Distillery Co.Ltd(603589) , Yingjia, Yanghe, Jiannanchun and other national famous wines, expanding outside the province and seizing the sub high-end market. "2" refers to the mid-range strategic item Gu 5 and gift. As an early strategic item, it helped the company realize the rapid expansion of revenue, cultivate the minds of consumers and lay the brand foundation for subsequent development.
Leading consumption upgrading within the province and nationwide expansion outside the province. At present, Anhui Province has entered the stock market of volume reduction and price increase. Gujing has occupied the secondary high-end market and led the upgrading of consumption in the province through the upgrading of product structure and the construction of refined channels. The strategic key single product has risen from ancient 5 to ancient 8 and then to ancient 20. On the other hand, Gujing actively expands the market outside the province, adjusts the investment promotion strategy according to the local conditions, puts in fine expenses, and accelerates the process of nationalization. According to the "14th five year plan" released by Anhui Gujing Distillery Company Limited(000596) , the company clearly puts forward the strategic layout of "nationalization and secondary high-end", and puts forward the goal that the company's operating revenue will reach 20 billion yuan in 2024, and the planned revenue outside the province accounts for 40%. We believe that under the positive role of the company's brand launch and channel strategy, it is expected to achieve the goal of accounting for 40% outside the province.
In the year of deep ploughing, the original pulp series has gradually improved its strategic focus. Year raw pulp series is a milestone strategy in the development history of the company. Gujing gift edition was launched in 2009, positioning the price band of 80 yuan. As a transitional product, it has realized the cultivation of consumers' mind. Gujing was launched in 2008 in five years, positioning the 120 yuan price band. At present, it occupies the largest volume of the 120 yuan price band in the province. At present, the company's strategic focus has risen from Gu 5 to Gu 8. The company plans that products above Gu 8 account for 40% in the next five years. As the largest single product in the price band of 200 yuan in the province, gu8 has significant advantages in channel, strategy and cost. In the future, it will continue to increase its volume gradually and contribute to the growth of revenue. In 2018, the company launched GU20 and positioned the price band of 500 yuan. Through the quota system, the company implemented quantity control and price protection, launched group purchase channels and strengthened brand publicity, which has become the company's profit product and a single product of expansion strategy outside the province. In addition, the company also launched high-end products such as ancient 30 and year original pulp Chinese Zodiac wine to enhance brand value and realize the preemption of the price band of 1000 yuan in advance.
Investment suggestion: Gujing, as the leader of Huijiu liquor, has good brand potential and channel advantages, fully benefits from the expansion of sub high-end capacity and nationalization, and is optimistic about the long-term competitiveness of the company. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 2.415 billion / 3.181 billion / 3.882 billion, with a year-on-year increase of + 30.2% / + 31.7% / + 22.0%, corresponding to EPS of 4.57/6.02/7.34. It will be covered for the first time and given a "recommended" rating.
Risk tips: 1) policy risk. Baijiu industry demand and tax rate are greatly influenced by policies, such as changes in relevant policies, which may have a greater impact on the company's revenues and profits. 2) Baijiu industry downturn risk. Baijiu industry and the price trend is highly correlated, if Baijiu prices decline, may lead to a substantial slowdown in corporate revenue growth. 3) Industry competition intensifies. There is a problem of intensified competition in the Baijiu industry. We should guard against the adverse effects of price war and fleeing goods brought about by the deterioration of competition. 4) Food safety risks. Food safety is the red line. Once food safety problems occur, they will have a great negative impact on the industry.
