Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) (603369)
Event: the 2022 development conference was held at Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) on December 29, and many leaders of Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) attended. The conference summarized the achievements of the company’s marketing reform in 2021 and looked forward to the goal and path of achieving high-quality development under the main line of “focusing on high quality and concentrating on New leaps” in 2022. We conducted research and gave feedback as follows:
Key investment points
In the first three quarters of 2021, it achieved high growth and significant structural upgrading. The meeting summarized the main work of the company in 2021: the company achieved a revenue of 5.335 billion in 2021q1-3, a year-on-year increase of + 27.2%, a net profit of 1.699 billion yuan, a year-on-year increase of + 29.3%, 21q4 continued to maintain a good development trend, and is expected to achieve high growth in the beginning year of the 14th five year plan. Among them, the product structure has been continuously optimized. The proportion of V Series in the national margin has reached 10.7%, and the growth rate of four opening and two-way opening has reached 31.1%. Channels. The six regions of the provincial market have achieved the growth of the whole region and the whole county. The growth momentum of Huai’an and Xuzhou has not decreased, achieving the growth of 20.0% / 51.5% respectively. The southern Jiangsu and eastern Jiangsu regions have maintained the growth of more than 30%. Nanjing has completed the tasks of the whole year ahead of schedule; The “2 + 5” key plate market outside the province achieved an increase of more than 35% in the first half of the year. In terms of dealers, there were 20 dealers with sales of more than 100 million in the province, 6 new ones, and more than 30 prefecture level markets with sales of more than 10 million outside the province, 18 new ones. In terms of production capacity, phase II of 100000 tons of Jiuqu has been put into use; The intelligent packaging and logistics center, wine making storage center, fermentation mud workshop and 40000 ton stainless steel wine warehouse have been capped; The construction of Luzhou flavor brewing plant was started, the design scheme of the new self storage center was completed, and the guarantee capacity of production capacity and quality was improved.
In 2022, focus on high quality, cohesion and new leap forward. The company puts forward the “13445” plan for marketing in 2022: “1” refers to the main line of “focusing on high quality and focusing on new leaps”. “3” refers to deepening and following the three modernizations strategy: highlighting differentiation and building the company’s core competitiveness; High end governance is the inevitable strategic choice for the company to participate in market competition; Speed up nationalization, which is the market result of high-end and differentiation strategy and the only way for sustainable development of enterprises. The first “4” refers to enhancing four confidence: industry confidence, brand confidence, quality confidence and development confidence. The second “4” refers to the four major campaigns of deepening marketing: first, unswervingly fight the tough battle of V9 and strive to improve the potential energy of V9 brand; Secondly, improve the expansion area and continue to strengthen the open system basic disk; Highlight the characteristics again and strengthen the effectiveness of Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) brand activation; Finally, take multiple measures to accelerate the breakthrough of the plate market outside the province. “5” refers to strengthening five guarantees: upgrading marketing organization, increasing market investment, deepening process reform, implementing excellent business plan and improving incentive mechanism. Through the above measures and paths, the company will gather development consensus, gather development confidence and actively develop momentum to ensure its stability and long-term progress on the high-quality development track.
Investment suggestion: according to the preliminary announcement, the company plans to use its own funds of no more than 518 million yuan to repurchase 6.6-7.7 million shares by the end of October, accounting for about 0.53% – 0.61% of the total share capital before repurchase; The repurchase was completed on November 26, with a cumulative repurchase of about 7.7 million shares, accounting for 0.61% of the total share capital of the company. The average repurchase price was 56.24 yuan / share, and the total amount paid was about 433 million yuan. We believe that the equity incentive scheme is expected to accelerate its implementation. According to channel research feedback, the company’s current inventory is low and the contract liabilities in the third quarterly report are high. It is expected that the contract liabilities in the whole year are still high. In addition, the enthusiasm of the sales team is expected to be further boosted after the implementation of potential incentives. The company has the potential and motivation to release performance. Among them, the price increase effect of four opening and counter opening is gradually obvious, the new four opening has achieved a smooth layout, and the V series continues to increase. The company’s performance target for 21 years is expected to be successfully achieved, contributing to the 25-year revenue target of the 14th five year plan of more than 10 billion. In the medium and long term, the logic of “upgrading product structure + increasing market share” in the province is expected to continue to be realized; The cultivation of key markets outside the province such as Shanghai, Zhejiang, Anhui, Henan and Shandong has accelerated, and the proportion of revenue outside the province may steadily increase to more than 10%. We maintain the profit forecast: the operating revenue of the company from 2021 to 2023 will be RMB 6.401/77.66/9.282 billion respectively, with a year-on-year increase of 25.0% / 21.3% / 19.5%. The net profit attributable to the parent company was RMB 1.943/2.401/2.908 billion, with a year-on-year increase of 24.0% / 23.6% / 21.1%. The corresponding EPS is 1.55/1.91/2.32 yuan respectively. Considering the company’s high growth under the background of upgrading in the province and expansion outside the province, the company was given a 22-year pe35x valuation and maintained the company’s “buy-b” rating.
Risk tip: under the repeated epidemic situation, the performance growth is less than expected, the product upgrading is less than expected, and the industry competition is intensified.
