\u3000\u3000 Luzhou Laojiao Co.Ltd(000568) (000568)
Investment suggestions: lay a solid foundation for the 13th five year plan and make steady progress in the “five steps”. Since the “Miaofeng” combination took office in 2015, the company has established the core product strategy of “double brands, three product lines and five single products” by cleaning up the over development of bar codes, shifted from Qiquan mode to brand franchise, and flattened and deepened its cultivation through diversified channel management methods such as manufacturer direct operation, 1 + 1 and dealer control, so as to speed up the national market layout. Looking back on 2021, Guojiao brand continued to grow in large quantities on the basis of 10 billion yuan, Tequ prices were combed smoothly, the southwest and Hebei markets made stable contributions, and the construction of central and East China markets was accelerated. We expect that the EPS from 2021 to 2023 will be 5.22 yuan, 6.68 yuan and 8.42 yuan respectively, corresponding to 43 / 33 / 26 times of the closing price (222.45 yuan / share) on February 23, 2022. We give a “buy” rating for the first time.
The ancestor of Luzhou flavor, double brand positioning Luzhou flavor national liquor and Luzhou flavor authentic. As a typical representative of Luzhou flavor Baijiu, Luzhou Laojiao Co.Ltd(000568) is one of China’s four famous wines. It has led the development of Luzhou flavor liquor with the advantage of technology, and is known as “the founder of strong fragrance”. The company focuses on five major products: the national cellar 1573 is China’s three largest high-end Baijiu brand, and it hits thousands of yuan price bands. Tequ and Jiaoling occupy the secondary high-end price range of 300-600 yuan. Jiaoling liquor is positioned as “wine for business elites”, aiming at medium-sized business banquets, while Tequ is positioned as “the first wine for Chinese famous wine banquets”; According to the positioning of “mass consumption brand”, the first song and the second song seize the high-speed light bottle wine track. At present, Guojiao has a volume of about 13 billion, and the scale of Tequ 60 version is nearly 2 billion. Driven by dual brands, it promotes Luzhou Laojiao Co.Ltd(000568) rejuvenation.
The channel mode is flexible in iteration and refined in cultivating the market. Since 2009, the company has established the Qiquan model of binding interests with dealers to enhance the vitality of channels. Subsequently, on the basis of Qiquan model, we continued to improve the disadvantages of channels. Since 2015, we have established a brand franchise model that is more consistent with the strategy of large single products, and gradually explored a variety of segmentation models such as Jiutai direct marketing model and 1 + 1 manufacturer collaboration. According to local conditions, we have deepened the control and profit sharing model through double “124”. On the basis of years of market cultivation, the company has established a three-level alliance operation mode, promoted the Guojiao meta system throughout the country, achieved close contact with core terminals and core consumers, and promoted the rapid cultivation of Guojiao brand awareness and consumption atmosphere.
Looking forward to the future, the “136” strategy will be firmly implemented and the brand’s comprehensive rejuvenation can be expected. At the beginning of 2021, the company formulated the “136” strategy for the development of the 14th five year plan and clearly put forward the goal of “returning to the top three in the industry” based on the development idea of “promoting advantages, making up weaknesses, improving quality, strengthening strength and seeking rejuvenation”. Under the plan of “going east and rising in the South”, the company will continue to stabilize the base market, accelerate the expansion layout of central, East and South China, and continue to cultivate the national market.
Stock price catalyst: Guojiao’s wholesale price continued to rise
Risk factors: macroeconomic uncertainty risk; Industry competition intensifies risks
