Shede Spirits Co.Ltd(600702) (600702)
Summary of this issue:
Tianshi: the expectation of price increase of high-end wine + phased slowdown of sauce wine + price increase of Jiannanchun, the competition pattern is good and willing. In 2020, the hot trend of sauce and wine is obvious. Driven by the sinking logic of sauce and wine consumption, high-quality sauce and wine will fill the place in the sub high-end price belt, and also drive the expansion of the whole sub high-end price. In 2021, the price of sauce and wine rose too fast, the cost performance of consumption decreased, the secondary high-end Luzhou flavor enjoyed the bonus of price with capacity expansion, and the wholesale price increased steadily. In 2022, the production capacity of high-quality sauce wine is limited, the quality of sauce wine is mixed, the consumer sentiment, market marketing and dealer sentiment are suppressed, the sauce wine fever slows down in stages, and the secondary high-end of Luzhou flavor still enjoys development dividends. In addition, in 2022, both high-end and sub high-end wines are expected to raise prices, and the competition pattern is favorable and willing.
Geographical advantage: the differentiation of old wine strategy is accurate, light pack and consolidate the benign channel. In 2019, based on its core advantages of rich old wine inventory and high quality, the company decided to implement the differentiation strategy of old wine. The advertising slogan was changed to "shede wine, every bottle is old wine", and the "double year" logo was marked on the fourth generation packaging of taste shede for the first time, so as to fully explore the historical value of the brand and strengthen the concept of old wine, Use the sense of time of "old wine" to find a position from the fierce flavor competition. In 2020, the company controlled goods and destocked under the epidemic situation. Although the thunder explosion of major shareholders brought confidence fluctuations, its strong brand strength supported its dynamic sales recovery. In 2021, the company has an obvious concept of giving priority to price protection. After September, the company has made great efforts to control goods, continued to reduce channel inventory, and the wholesale price of core products is strong.
Renhe: Fosun respects the market, respects the team, strengthens its advantages and seizes opportunities. Different from the radical reform in the Tianyang era, Fosun has made less adjustments at the business level after taking over, fully respected the existing team, improved the team cohesion, strengthened the implementation of the old wine strategy, empowered the brand, took the repair of the old cellar as the top strategy, strengthened quality assurance and seized the development opportunities of the industry. With Fosun's endorsement, dealers' confidence in the development of the company has increased significantly, and they have gradually recognized the positioning of the old wine strategy. The willingness of brand agency has increased, and the momentum of nationalization is good. In 2019, the company provided equity incentive to the management. In terms of the cost and current stock price at that time, it has increased by 20 times, and the stability and motivation of the sales team have been significantly enhanced, which has promoted the realization of compound growth.
Future: the company can seize the track of low-grade Luzhou flavor and vintage wine and give full play to its quality advantage. Low alcohol liquor has high requirements for the quality of basic liquor, and willing quality has advantages. At present, some core markets of the company have a large demand for low alcohol liquor, so the construction of core market can be consolidated through low alcohol Luzhou flavor strategy. It is difficult for high-end liquor to increase its volume. At present, old liquor is more of an enabling brand and core single product in terms of quality advantage. The company may strengthen the cultivation of consumers and core opinion leaders in the circle by increasing tasting, back to the factory tour, media launch and other means, and gradually make a large-scale single product at 500-800 yuan. We believe that the company's short-term exceeding expectation comes from the collection and performance drive, the medium-term exceeding expectation comes from the guarantee of incentive, model innovation and organizational adjustment, which now affects the future organizational power, and the long-term exceeding expectation comes from the old wine strategy and quality confidence.
Stock price catalyst: expansion of secondary high-end market
Risk factors: macroeconomic uncertainty risk; Industry competition intensifies risk
