Luzhou Laojiao Co.Ltd(000568) (000568)
event
On December 29, 2021, according to the authorization of the first extraordinary general meeting of shareholders in 2021, the company held the 12th meeting of the 10th board of directors on that day, deliberated and adopted the proposal on granting restricted shares to incentive objects, determined that the granting date of restricted shares was December 29, 2021, and granted 6.9286 million restricted shares to 441 incentive objects for the first time.
Key investment points
Equity incentive was finally implemented, with a wide number of participants
The company was approved by Luzhou state owned assets supervision and Administration Commission on December 2 and approved the equity incentive plan issued by the company on September 27, marking important progress in equity incentive of the company. The plan includes no more than 521 directors, supervisors, senior executives and core backbone, and the number of restricted shares to be granted shall not exceed 8834600 shares; Among them, the number of shares granted by senior executives ranges from 62800 to 95900, and the average number of shares held by business backbone is 14200. The grant price is 92.71 yuan / share. 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. Compared with 2019, the net profit growth rate from 2021 to 2023 shall not be lower than the 75th percentile of the benchmarking enterprise; 3. From 2021 to 2023, the proportion of costs and expenses in operating revenue shall not be higher than 65%.
In the equity incentive plan finally implemented, it is specified that the number of participants in the first batch is 441, and the number of shares granted for the first time is 6.9286 million restricted shares (of which 432 core backbones hold 6.2277 million shares), accounting for about 0.473% of the company’s total share capital of 1464752500 shares. The amortization of equity incentive expenses is divided into four years: the expenses from 2022 to 2025 are 390 million yuan, 390 million yuan, 182 million yuan and 78 million yuan respectively.
The scheme has great challenges, puts forward higher requirements for the company’s high-quality growth, improves the enthusiasm of the core backbone, and is 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 46 / 37 / 30 times respectively, maintaining the “recommended” investment rating.
Risk statement
Macroeconomic downside risk, epidemic drag on consumption, epidemic drag on consumption, national cellar growth is less than expected, and the expansion outside the province is less than expected.
