\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 519 Kweichow Moutai Co.Ltd(600519) )
Events
Kweichow Moutai Co.Ltd(600519) released the announcement of main business data from January to February 2022 in the evening of March 7, 2022. During the Spring Festival in 2022, the company’s product sales momentum improved and the company successfully achieved a “good start”. According to the preliminary accounting of the company, from January to February 2022, the company achieved a total operating revenue of about 20.2 billion yuan, an increase of about 20% year-on-year; From January to February, the net profit increased by about 20% year-on-year, surpassing the level in the same period after the epidemic in 2020 and 2021.
Comments
The performance exceeded expectations and made a good start in the first quarter. Maotai’s revenue and net profit in the first quarter of 2020 / 2021 increased by 12.54% / 16.34% and 10.93% / 6.56% respectively year-on-year. The operating data in the first two months of 2022 slightly exceeded expectations. Baijiu Baijiu Baijiu PE (TTM) has been declining since 2022. The liquor industry’s policy disturbance and epidemic situation have been repeatedly affected. The recent geopolitical factors and consumption tax expectations have been the main factors affecting liquor industry. The liquor PE (TTM) has been adjusted to 41X from the beginning of 2021, and the valuation has basically fallen into a reasonable area. In the long run, the Baijiu industry is basically free from worry and the industry is still in the boom cycle. The company’s scarce business model and its deep brand moat support its largest Baijiu liquor. The disclosure of business data from January to February is the first release of such data in its history, and the solid fundamentals highlight the prosperity of the industry.
The management style is pragmatic and has strong determination to reform the market. The company has successively cancelled the unpacking policies of zodiac, boutique and Pufei (1 6), and increased 500ml 12 Maotai liquor for unpacking sales. In order to prevent overheated wholesale prices, the price is controlled around 2800 yuan during the Spring Festival. At the same time, restore the digital sales system and explore the balance between channel and market-oriented pricing. In terms of channels, the company will further strengthen the construction of direct channels, and the company’s control ability and profitability of channel terminals will be further enhanced. In terms of capacity, the company’s “Maotai Baijiu Xishui” phase 1 construction project in 14th Five-Year was launched in February 27th. The project invested 4 billion 110 million yuan and the construction period was 24 months. After completion, the company will further enhance its liquor production capacity. Channel optimization and capacity construction work together, with strong certainty of steady growth of performance.
Optimize the product structure and channel structure, and the performance can grow steadily. At the end of 2021, the company launched new products such as the year of the tiger Zodiac Maotai and rare Maotai liquor. During the Spring Festival in 2022, the company launched Maotai 1935, a series of liquor with a price of 1000 yuan. It is expected that the total amount of liquor put in 2022 will reach about 3000 tons. From the perspective of channel structure, Maotai has been optimizing the channel structure and increasing the proportion of direct channels since 2019. With the increase of the proportion of direct channels, the profitability has been continuously improved.
Investment advice
As a high-end famous liquor, Maotai has sufficient toughness. Under the multiple reforms of digitization, production capacity, corporate governance, product structure and channels, the production capacity of short-term base liquor is sufficient. Through the optimization of product structure and the inclination of channels, the ton price can be increased, and the performance has stable growth and strong certainty. After early adjustment, the current valuation has reached the reasonable allocation range, and the company’s long-term investment value has been further highlighted.
Risk tips
Geopolitical factors and food safety issues.
