\u3000\u3000 Vats Liquor Chain Store Management Joint Stock Co.Ltd(300755) (300755)
Vats Liquor Chain Store Management Joint Stock Co.Ltd(300755) is the leading distributor of fine wines in China, and its high growth has been continuously verified. The company has an omni-channel marketing network all over the country, has established a long-term and stable cooperative relationship with upstream wine enterprises, has rich brand resources, adheres to the service concept of “fidelity” and provides consumers with high-quality diversified product portfolio. Thanks to the double improvement of the number and quality of chain stores, the company’s revenue and net profit attributable to the parent company maintained a rapid growth. The revenue CAGR reached 34.75% from 2018 to 2020, and the revenue in 21 years is expected to increase by 50.36% – 53.8% year-on-year; From 2018 to 2020, the net profit attributable to the parent company CAGR reached 28.75%, and the net profit attributable to the parent company in 21 years is expected to increase by 80.61% – 85.16% year-on-year.
Strong channel + strong brand resonates upward, and the nonlinear growth curve accelerates its growth. (1) In terms of channels, “700 project” + “323 new regulations” boost the quality and efficiency of sales channels; The company implements the “small B and big C” strategy, which not only develops high-quality beverage retail outlets nationwide, but also develops group purchase units and direct consumers through group purchase business and e-commerce business. The “small B and big C” strategy helps the company’s number of stores grow rapidly and expand the market cornerstone.
(2) brand, the company has rich brand resources including Moutai and Wuliangye Yibin Co.Ltd(000858) , Baijiu contributes most of its revenue. Moutai and Wuliangye Yibin Co.Ltd(000858) are also important products to increase user stickiness. The company also launches exclusive exclusive boutique wine with upstream liquor companies to enhance profitability. Among them, lotus and Diaoyutai are important products of the company, which accurately fill the blank price band of Maotai flavor wine. (3) In the future, the company’s channels will continue to expand and its brand strength will continue to improve, which is expected to promote the company’s growth curve.
The market scale of liquor circulation industry is huge, the competition pattern is scattered, and the market share of Huazhi is expected to increase under the trend of industry concentration. In 2020, the market scale of liquor circulation industry is close to 1.2 trillion, and the market share of major participants in the industry is no more than 1%. In comparison with the same industry, Vats Liquor Chain Store Management Joint Stock Co.Ltd(300755) in 2020, its revenue exceeded 1919 and became the industry leader. The company focused more on offline channels, with a leading number of offline channels. It has more than 2000 chain stores and more than 27000 retail terminals. Compared with the United States, Cr5 has exceeded 60%. Due to the dominance of Huazhi in brand and channel, the market share of the company may further increase under the trend of industry concentration.
Investment suggestions: Vats Liquor Chain Store Management Joint Stock Co.Ltd(300755) is the leader in liquor distribution, with an omni-channel marketing network all over the country. The number of offline outlets is dominant. At the same time, it actively responds to the digitization and flattening trend of the liquor industry, and actively arranges online shopping malls to serve b-end customers and directly face consumers; The company has rich brand resources and has established long-term and stable cooperative relations with Maotai and Wuliangye Yibin Co.Ltd(000858) . With the help of Maotai and Wuliangye Yibin Co.Ltd(000858) and other famous wines, the company increases user stickiness. At the same time, based on its insight into the development trend and consumption habits of the industry, the company works closely with upstream liquor enterprises to continuously launch exclusive customized boutique wines to improve profits. The scale of China’s liquor circulation industry is huge, but the competition pattern is scattered and the industry concentration is still low. With the increase of industry concentration, the market share may increase steadily in the future due to the company’s advantages in channels and brands. It is estimated that the net profit attributable to the parent company will be RMB 690, 900 and 1.16 billion in 21-23 years, corresponding to 26, 20 and 16 times of PE.
Risk factors: fluctuation of gross profit margin; Industry competition intensifies; The consumption tendency of Baijiu liquor declined. The company’s new product sales and channel expansion are less than expected; Liquor enterprises build their own direct channels
