\u3000\u3000 Wuliangye Yibin Co.Ltd(000858) (000858)
Event: the company announced that due to job changes, Mr. Li Shuguang applied for resignation from the company’s director and relevant special committees under the board of directors, and Mr. Zou Tao applied for resignation from the company’s director, vice chairman and general manager. On the same day, the company announced that the board of directors elected Mr. Jiang Wenge as the vice chairman and appointed him as the general manager.
Personnel adjustment will be implemented, the military will be determined and confidence will be raised, and the deepening of reform in the future can be expected. Since the second half of last year, the market has increased concerns about the company’s internal governance. At present, the company’s personnel adjustment has been implemented, and a new leadership team with Chairman Zeng Congqin and general manager Jiang Wenge as the core has been built. Before the adjustment, chairman Zeng Congqin and general manager Jiang Wenge held important positions in the company. They are familiar with the company and have rich experience in government and enterprise management. It is expected that they will lead the company to continue to deepen reform and strive to solve multiple problems faced in current development in the future. At the 2021 annual work summary meeting before the Spring Festival, chairman Zeng Congqin proposed to “promote the high-quality development of the enterprise with higher standards, stricter work style and more practical measures”. In 2022, the company has a clear direction to accelerate the adjustment and optimization of the marketing system and strengthen the ability of tactical execution. The implementation of this personnel adjustment will first play a role in calming the military and enhancing confidence. The effect of subsequent internal governance optimization and external market operation and channel control remains to be tested.
We look forward to the improvement of corporate governance and the strengthening of core growth drivers. (1) The simultaneous rise in volume and price of the eighth generation and the fifth generation is still the most important growth driving force of the company at this stage. From the dynamic sales during the Spring Festival, the demand of the eighth generation and the fifth generation is still strong, the payment collection progress is good, and the performance of 2022q1 is guaranteed. The price increase of puwu has made a clear contribution to the performance. After the price increase, the dealers have high acceptance, but the general feedback is that the profit space has been compressed. We believe that the company needs to further improve the marketing system, optimize the manufacturer relationship, and strengthen the implementation ability of volume and price strategy, so as to consolidate the leading position of puwu in the 1000 yuan price belt. In the future, the price trend and inventory of puwu is an important test indicator of the company’s channel control ability. At present, the price of puwu is maintained at about 980 yuan. According to the experience of previous years, the company may carry out volume control and price support in the off-season before the Mid Autumn Festival. Whether the price of puwu can reach thousands before the peak season of the Mid Autumn Festival is the key point of tracking. (2) Classic Wuliangye Yibin Co.Ltd(000858) has faced the problem of loose pricing since the second half of last year. It is expected that the company will make corresponding adjustments to the market strategy of classic Wuliangye Yibin Co.Ltd(000858) this year. It is necessary to do a solid job in consumer cultivation and lay a solid foundation for the future volume of classic Wuliangye Yibin Co.Ltd(000858) .
The five year plan has grown steadily. In the cultivation of classic Wuliangye Yibin Co.Ltd(000858) kinetic energy, the current stock price position has limited downward risk and high upward elasticity, so it maintains the “recommended” rating. Combined with the development stage of the industry and the recent dynamic sales situation, we expect that the general five-year plan will maintain a steady growth trend in the whole year. It is expected that the company will appropriately slow down the launch pace of classic Wuliangye Yibin Co.Ltd(000858) this year. At present, it is mainly to do a solid job in consumer cultivation. After the market foundation is solid, the volume of classic Wuliangye Yibin Co.Ltd(000858) can be expected. We adjusted the profit forecast of the company accordingly. It is estimated that the total operating revenue of the company from 2021 to 2023 will be 67.11/77.16/88.33 billion yuan respectively, with a year-on-year increase of + 17.1% / + 15.0% / + 14.5%; The net profit attributable to the parent company was 23.15/272.5/31.79 billion yuan respectively, with a year-on-year increase of + 16.0% / + 17.7% / + 16.7%; EPS is 5.96/7.02/8.19 yuan / share respectively. The company’s brand is strong, the leading position of Luzhou flavor is stable, and the high-end Baijiu industry has a high barrier, and its long-term steady growth has a high degree of certainty. The future classic Wuliangye Yibin Co.Ltd(000858) is expected to contribute to greater elasticity of achievement after its success. The company’s share price has been trading at 28/24 times PE in 2022/2023, and its price performance has been highlighted in the Baijiu industry valuation system. We give the company 38-42 times PE in 22 years, corresponding to the target range of 266-295 yuan. The current stock price position has limited downward risk and high upward elasticity, maintaining the “recommended” rating.
Risk warning: the macro-economy has fallen sharply; The classic Wuliangye Yibin Co.Ltd(000858) moving pin is not as expected; The reform is not as expected; Stricter supervision of the industry; Brand power is damaged.
