\u3000\u3 Shengda Resources Co.Ltd(000603) 919 Jinhui Liquor Co.Ltd(603919) )
Longnan is the leader of historical famous liquor, and Fosun is in charge, enabling development Jinhui Liquor Co.Ltd(603919) originated from the Western Han Dynasty, flourished in Tang and Song Dynasties, and the company is the leading Baijiu enterprise in Gansu province. With the brand positioning of “only pit fragrance, no mud flavor”, the products mainly cover multi price bands of less than 100 yuan (“Century Golden Emblem Samsung, two stars”, etc.), 100300 yuan (“soft golden emblem”, “positive energy” series), Tus-Design Group Co.Ltd(300500) yuan (“Golden Emblem year” series). In 2020, Fosun Group entered the main company through its Shanghai Yuyuan Tourist Mart (Group) Co.Ltd(600655) holding, opening a new chapter of development.
Based in Gansu, it makes great efforts in the northwest and looks at East China in the distance. 1) the Baijiu market in Gansu is about 60-70 billion yuan, and Jinhui Liquor Co.Ltd(603919) is “super strong and super strong”. In 2020, the company occupied 24% of the city in Gansu Province, leading the market of wine enterprises such as the Red River and riverside. The company took Longnan and Lanzhou as the core market, and the provincial capital market focused on the layout of the high-end liquor, so as to form a leading role in the whole province. Promote the two wheel drive marketing mode of “deep distribution + key customer operation”, build channel barriers through the golden network project, accelerate the layout of western Gansu and Eastern Gansu markets, and stabilize the leading position in the province. 2) Adhere to the northwest strategy and focus on the market of Gansu: the five provinces around Gansu include Qinghai, Xinjiang, Inner Mongolia, Shaanxi and Ningxia. Xifeng Liquor ranks first in the region, and Xinjiang Yilite Industry Co.Ltd(600197) , Jinhui Liquor Co.Ltd(603919) , tianyoude liquor and other basic markets. The company’s products are differentiated inside and outside the province. The “positive energy” series focuses on the consumption upgrading price of 100300 yuan. The year series is arranged at the secondary high end. The marketing is based on the operation mode of “one place, one policy”, creating a model market and “core store”, realizing asymmetric competition in the way of “focusing on resources, precision marketing and asymmetry”, and gradually opening up the Northwest market. 3) East China market: take advantage of Fosun and look to East China: after Fosun became the owner, the company provided customized wine for the group and took advantage of group purchase resources to achieve a “zero” breakthrough in the East China market. In October 2021, the company established Jiangsu and Shanghai sales branches to lay a solid foundation for future development.
Long standing brand, excellent quality and continuous upgrading of product structure. In the 20162020 year, Gansu’s per capita income increased by 38.62%, and the mainstream price of Baijiu consumption increased from 100 yuan to 100300 yuan. The company’s Golden Emblem brand has a long history. After Fosun became the owner, it further improved its brand awareness through activities such as “famous wine into famous enterprises”. The inventory of base liquor is about 37000 kiloliters, which ensures good quality and fully benefits from consumption upgrading. The price of 100300 yuan with soft series has a strong development momentum in recent years, and the secondary high-end year series also has a bright performance, In the 20162020 year, the overall sales volume of the Baijiu company increased steadily by 48.28%, and the product structure continued to upgrade.
Sword finger 3 billion, improve the incentive mechanism and stimulate the vitality of enterprises. In 2019, the company formulated a shareholding plan for senior executives, key employees and dealers to fully bind the interests of management, core employees and dealers, and issued the outline of Jinhui Liquor Co.Ltd(603919) five year development plan in the same year. It aims to achieve a revenue of 3 billion yuan and a profit of 600 million yuan in 2023; After Fosun takes over, it will maintain the stability of personnel and business objectives, export management experience and have sufficient momentum for enterprise development.
Investment suggestion: we estimate that the net profit attributable to the parent company in 21-23 years will be 412 million yuan, 553 million yuan and 696 million yuan respectively, with a year-on-year increase of 24.2%, 34.4% and 25.9%; EPS is 0.81 yuan, 1.09 yuan and 1.37 yuan respectively. The current share price corresponds to 42, 31 and 25 times of PE. The company’s regional expansion is advancing steadily, the product structure is improved, and the growth path is clear. Fosun energy brings new development opportunities. Refer to the valuation of comparable regional leading companies and maintain the “recommended” rating.
Risk warning: the epidemic situation repeatedly affects consumption; Structural upgrading is not as expected; Industry competition intensifies; Food safety accidents.
