Jiugui Liquor Co.Ltd(000799) (000799)
Event: We recently conducted several investigations on the company, updated relevant information and commented as follows:
The internal brand potential is upward, and the high-end occupation continues to consolidate. Internal reference has actually become a billion level single product at the price of 1000 yuan, helping the company occupy a favorable high-end position. The internal ginseng liquor is a super grade base liquor that has been stored for at least 8 years. Since it was put on the market in 2004, it has been used as the company's cutting-edge single product, priced against Maotai, and has a good historical accumulation of high-end image. Since the establishment of the sales company at the end of 2018, COFCO has been substantially involved in management and empowerment. The company has continued to make efforts in brand leadership, mechanism innovation and circle promotion, and the sales climate has taken on a new look. In terms of brand, with the help of CCTV brand publicity and the launch of international conferences, the voice of internal brands has been significantly strengthened. The new packaging launched in August uses the "COFCO" logo to further strengthen brand endorsement; In terms of mechanism, the sales company model effectively bypasses the institutional constraints of central enterprises, creates a new cooperative relationship of joint channel control and benefit sharing among manufacturers, and continuously attracts powerful businessmen to participate in shares to help explore market boundaries; In terms of circles, backed by COFCO group, the company enjoys resource endowment advantages in culture and politics, and can better play the role of core opinion leader. Benefiting from the bonus of fragrant fragrances (recognized by the national standard) and the unique positioning of high-end etiquette wine, the differentiated brand barrier continues to be built. After doubling for three consecutive years from 2019 to 2021, the national scale of internal participation has been initially completed. In 2022, the quantity and price within the province will be stable and the quantity and price outside the province will be broken through, and the double increase of volume and price can be expected.
The sales momentum of drunkards has been strengthened, and the sub high-end cost performance has been highlighted. After the comprehensive adjustment in 2020, the drunkard dealer system is straightened out again, and the product layout structure is clear. In 2021, taking advantage of the secondary high-end boom, we will further realize the nationwide investment expansion, and it is expected to nearly double the growth in the whole year. Through the joint IP creation of "riding alone for thousands of miles" and "China National Geography", drunkards realize the effective dissemination of brand values in the form of cultural content output. In the future, they will clearly focus on the red altar and inheritance, and continue to make efforts in the price band of 300 ~ 500 yuan. Under the guidance of the internal reference brand, the drunkard, as a sub high-end head brand, has highlighted its cost performance in the price rise of sauce and wine. With the addition of 200 yuan of grain wine in the internal product card, the product portfolio has made joint efforts to form a good resonance. It is expected that the drunkard will still achieve rapid growth on the basis of high base next year.
Foreign markets have been opened for the second time, and we are optimistic that the national expansion has stepped into the upward fast track. The company's original fragrant tulips are of outstanding quality. Relying on the revitalization of Hunan wine and the unique natural resources in Western Hunan, and with the help of consumer cultivation methods such as tasting promotion and wine tourism integration, the share of minority flavor types has broad prospects. From the perspective of national expansion effect: 1) the company's dealer team has expanded significantly, and large and excellent merchants such as Taishan famous beverage, Xiamen Fengde, Suzhou sugar and Zhejiang sugar have been gathering. The actual number of investment attraction of internal ginseng and drunkard this year is expected to exceed the plan at the beginning of the year, increasing by about 400 and 500 respectively, and the coverage rate of cities outside the province exceeds 90%. 2) The market margin has been opened rapidly. It is expected that this year, it will successfully create a billion dollar market in Henan, Hebei, Shandong, Guangdong, Beijing, Anhui, Jiangsu, Zhejiang and other provinces and cities. The first-line core markets of Beijing, Shanghai and Beijing Guangzhou will be gradually connected into a line, which is conducive to improving consumer awareness and forming a dynamic sales atmosphere. It is expected that in the future, with the promotion of sales in the core advantageous markets and new marginal markets, The company's volume expansion outside the province will enter the upward fast track. The breaking of market margin makes the company's long-term scale space optimistic.
Investment suggestion: it is expected that the price increase of internal participation will be implemented in a centralized manner since the opening payment in December, and the opening payment and price increase effect verification are expected to bring catalysis. It is estimated that the earnings per share from 2021 to 2022 will be 2.98 yuan and 4.72 yuan. We are optimistic about the upward trend of the company's brand, maintain the target price of 306 yuan, and the corresponding 2023pe is 45x, giving a Buy-A rating.
Risk tip: the nationwide expansion leads to higher cost than expected, and the volume of alcoholic lines is lower than expected.
