Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) (600809)
event
On December 26, 2021, the 2021 Fenjiu global distributor conference was held in Fenjiu Group, and the company’s management attended the conference.
Key investment points
Four advantages gather potential energy and four focuses meet rejuvenation
At present, the company has reform advantages, category advantages, product line advantages and market advantages. The reform advantage refers to that the company has accumulated a large number of Fenjiu characteristic ideas since the national reform in 2017, which has promoted the deepening of the company’s reform; Category advantage means that the company is a leading enterprise of fragrance type, and the market share of fragrance type continues to increase; Product line advantage means that the company has three well-known trademarks: Fen, Zhuyeqing and Xinghua village, covering multiple price bands; Market advantage refers to the significant effect of the company’s nationalization strategy and the in-depth expansion outside the province. The four focuses refer to focusing on market structure optimization, product structure optimization, quality improvement and management improvement. Among them, the optimization of market structure means that first, we should play steadily and consolidate the Shanxi market; Second, we should seize the highland. The Yangtze River Delta and the Pearl River Delta are the high-speed growth areas of China’s economy and the highland that must be seized by the Fenjiu nationalization strategy. Product structure optimization refers to highlighting the development orientation of medium and high-end wine, continuously releasing the head effect of blue and white wine and shaping waist products. Quality improvement refers to the expansion of high-quality original wine to escort the goal of the 14th five year plan. Management improvement refers to the continuous improvement of enterprise system and the optimization and development of governance structure. The four focuses represent the areas that need to be improved in the deep-water area of the company’s reform, so as to prepare for the revival.
The reform entered the deep water area and adhered to the policy of 133238
At present, the company faces the following problems: 1. We should fully solve the problems of unbalanced and insufficient brand development and insufficient aggregation of brand resources. 2. 2. We should fully solve the problem of imperfect and incomplete Fenjiu international marketing system. 3. We should fully solve the problem of promoting the brand value of Qinghua Fen Liquor. 4. We should fully improve the existing business team and dealer team. 5. We should fully solve the problems of building a digital marketing platform and extending and covering the digital marketing end.
In 2022, the company adheres to the overall marketing reform policy of “133238”, that is, aiming at one goal, fighting three battles, building three markets, promoting two projects, adhering to three indicators and achieving eight adherences. One of the goals is to achieve the three goals of the Baijiu industry. The three campaigns refer to the crucial battle of marketing system construction, product structure adjustment and brand value promotion. The three major markets refer to the first is the large base Market (in addition to the original base camp, it is emphasized that a strong base market will be built in the north of the Yellow River, with the North China market as the core barrier), the second is the East China market, and the third is the South China market. Once again, it is emphasized on the East China market (markets such as Jiangsu, Zhejiang, Shanghai and Anhui) and the South China market (mainly including Guangdong, Shenzhen, Hong Kong and two lakes regions.) three indicators refer to: the first is the sales index of Qinghua Fen Liquor, the second is the terminal index of Qinghua 20, and the third is the index of Qinghua Fen Liquor opinion leader group. More emphasis is placed on focusing on resources, focusing on Qinghua series, holding high and playing high, and continuously improving the fragrance brand strength.
Five highlights of the company in the future, in-depth nationalization
Looking forward to next year, although the company’s performance slows down, its revenue is expected to maintain a growth rate of more than 25%. After the national reform in 2017, the company is rejuvenated in the second spring, and the brand revival is imminent. It is just around the corner to become maowufen.
We believe that the company’s five highlights in the future: 1. Build a 2 + 2 brand. The first 2 refers to Fenjiu and Zhuyeqing, and the second 2 refers to Xinghua village brand and series brand. Fenjiu and Zhuyeqing core drive the development of the company, and Xinghua village brand and series brand are beneficial supplements. 2. It is a big health industry platform with bamboo leaf green as the core. Bamboo leaf green is a core brand built by the company in the future, and is expected to be large in the future. 3. Under the product strategy of “grasping both ends and strengthening the waist”, the blue and white series continues to enhance the brand strength of the company. The blue and white 30 · revival version seeks to bring large quantities of single products at a price of 1000 yuan, and Bofen consolidates the large single products at a price of 40-60 yuan, so as to strengthen the competitiveness of waist old Baifen and Panama products. 4. The “1357” nationwide layout is implemented for regional expansion, and the marketing organization structure of 31 provinces and regions + 10 directly subordinate management areas is gradually built. During the 14th Five Year Plan period, the proportion of revenue inside and outside the province is expected to increase from the current 4:6 to 3:7 in the future. 5. With the gradual completion of the company’s layout, the optimization of product structure and the deepening of national layout, the company’s net interest rate under the scale effect is expected to increase from more than 20% at present to more than 30% in the future.
Profit forecast
At present, the company’s brand potential continues to be released, focusing on building the revival version of blue and white 30 and entering the high-end wine camp. We are optimistic about the revival of the company’s brand. Blue and white lead the company’s brand height. It is expected that the EPS will be 4.65/6.28/8.40 yuan from 2021 to 2023, and the current share price corresponding to PE will be 66 / 49 / 37 times respectively, maintaining the “recommended” investment rating.
Risk statement
Macroeconomic downside risks, epidemic drag on consumption, blue and white growth less than expected, expansion outside the province less than expected, etc.
