Luzhou Laojiao Co.Ltd(000568) (000568)
The third quarter reported steady growth and steadily improved profitability
The company’s 2021q1-q3 revenue was 14.11 billion yuan, an increase of 22% at the same time; The net profit attributable to the parent company was 6.276 billion yuan, an increase of 30% at the same time; Among them, the revenue of 2021q3 was 4.793 billion yuan, an increase of 21% at the same time, and the revenue growth accelerated month on month compared with 2021q2, returning to double-digit growth; The net profit attributable to the parent company was 2.049 billion yuan, an increase of 28% at the same time, and continued to maintain steady growth. At the end of 2021q3, the contract liabilities were 1.91 billion yuan, an increase of 500 million yuan month on month and 670 million yuan at the same time, with obvious reservoir effect. The gross profit margin from 2021q1 to Q3 was 86.30%, an increase of 2.8pct; Among them, 2021q3 was 87.51%, with an increase of 0.6pct, which was caused by the continuous optimization of product structure; The net interest rate from 2021q1 to Q3 was 44.57%, an increase of 3.3pct; The net profit margin of 2021q3 was 42.21%, an increase of 2.73pct, which was caused by the increase of gross profit margin and the decrease of sales expense rate.
Improve the product matrix and make great strides forward with equity incentive
The company launched Luzhou Laojiao Co.Ltd(000568) 1952 in mid October at a price of 899 yuan to supplement the blank price band between the national cellar and the cellar age of 90 years and further enrich the product matrix. We expect that the product will be put into the national cellar system. At present, the company operates with dual brands, and Guojiao 1573 and Luzhou Laojiao Co.Ltd(000568) keep pace. It is not a day’s effort to build a brand, so it is necessary to continuously cultivate the target group.
In addition, the company was approved by Luzhou SASAC on December 2 and approved the equity incentive plan issued by the company on September 27, indicating that the company has made important progress in equity incentive. The plan includes no more than 521 directors, senior executives, middle managers and core backbone personnel, and the number of restricted shares to be granted shall not exceed 8834600 shares; Among them, the shares granted by senior executives ranged from 62800 to 95900, and the business backbone held an average of 14200 shares, The grant price is 92.71 yuan / share (the share price on the date of publication of the scheme is 186.4 yuan / share), and the assessment conditions are as follows: 1. The return on net assets in 2021-2023 is not less than 22% and not less than the 75th percentile of the benchmarking enterprise; 2. The growth rate of net profit in 2021-2023 is not less than the 75th percentile of the benchmarking enterprise compared with 2019; 3. The proportion of costs and expenses in operating revenue in 2021-2023 is not more than 65%. This scheme has great challenges and high impact on the company Putting forward higher requirements for quality growth and improving the enthusiasm of core backbone are of great significance to establish and improve the company’s incentive mechanism. At present, the company is transforming from the high growth mode obtained by investment cost to the high growth mode obtained by brand pull, and the brand strength continues to improve.
Five highlights in the future when the revival is in progress
Five highlights of the company in the future: first, brand side: dual brand strategic operation and brand rejuvenation. Guojiao 1573 and Luzhou Laojiao Co.Ltd(000568) dual brand strategy. Guojiao 1573 enhances brand influence through circle marketing such as Guojiao Hui; Propose brand rejuvenation for Luzhou Laojiao Co.Ltd(000568) , constantly tap the historical and cultural resources of the old cellar, and enhance the influence of Luzhou Laojiao Co.Ltd(000568) brand by creating cultural IP such as “seal collection ceremony”. Second, product side: focus on five single products, and Guojiao and Tequ continue to make efforts. 1) Focus on high-end wine to build national cellar 1573; 2) The mid-range liquor Tequ series bears the burden of the rise of waist products. The time-honored brands mainly serve as the circulation channel, and the 60th edition is currently used as the national group purchase channel. Third, the price side: Guojiao follower strategy, Tequ is expected to enter the 300 yuan price band. 1) Guojiao follows the Wuliangye Yibin Co.Ltd(000858) price increase strategy, which remains unchanged in the medium and long term, and is expected to enter the 1000 yuan price band in the future; 2) Tequ has raised its price to about 200-250 yuan, and is expected to enter the price band of 300 yuan in the future. Fourth, the channel side: the effect of brand franchise mode is remarkable, and the extensive operation has changed to fine operation. The company implements the brand franchise mode, establishes three brand franchise companies, and focuses on fine operation of products. Fifth, regional expansion: make up for weaknesses in nationalization, continue the battle and move east and South at the same time. The company’s traditional advantageous regions southwest, central China and North China account for more than 85%. In 2018, the company proposed the east to South map project. The East China and South China markets ranked lower, which was inconsistent with the company’s position and there was a large gap in volume.
Profit forecast
At present, the nationalization of the company continues to advance, the goal of returning to the top three remains unchanged, the talent echelon is gradually younger, and strive to advance to the top three in the 14th five year plan. We expect that the EPS from 2021 to 2023 will be 5.25/6.66/8.03 yuan, and the current share price corresponding to PE will be 48 / 38 / 31 times respectively. It will be covered for the first time and given a “recommended” investment rating.
Risk statement
Macroeconomic downside risks, epidemic drag on consumption, less than expected growth in the national cellar, less than expected expansion outside the province, etc.
