Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) (603369)
event
Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) held the 2022 Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) development conference with “focus on high quality and focus on new leaps” today. While first proposing the “13445” marketing work plan, V99 alliance was established to develop V series.
Key investment points
Focus on high-quality cohesion and make a new leap forward
Looking back on 2021, the first battle of Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) was initially won: 1) overall growth of main indicators: 21q4 company continued to maintain a good development trend. This year, there were 20 dealers with tax included sales exceeding 100 million yuan, 6 new ones, and more than 30 prefecture level markets with tax included sales exceeding 10 million yuan outside the province, 18 new ones; 2) Further improvement of management level: 22 dealers pilot promoted the authorization mechanism and paperless expense settlement; Enrich dealer portal functions; Improve the supply chain system; Some dealers have a high level of corporate operation; 3) More balanced regional development: in the first three quarters of the province, 6 regions, 13 prefecture level cities and 74 offices achieved the growth of the whole city; The weak market and highland market achieved double-digit excellent growth (the growth rate of Southern Jiangsu and central Jiangsu exceeded 30%, and the annual goal of Nanjing region was completed ahead of schedule); 4) technological transformation projects were steadily promoted. Under the environment of intensified competition, the company will comprehensively plan the path measures of “completing the five-year goal ahead of schedule” and implement the “13445” marketing work plan (grasp the principle of “focusing on high quality and focusing on new leaps” One main line; Follow the strategy of differentiation, high-end and nationalization; Strengthen “industry confidence, brand confidence, quality confidence and development confidence”).
V series is unswerving in tackling tough problems, improving quality and expanding surface, Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) activating and highlighting characteristics
The company’s structure continued to improve in the first three quarters: 1) super class a increased by 20%: Guoyuan V series performed well (+ 120%), and V series accounted for 10.7% of Guoyuan brands; 2) Special a + category increased by 31.1%, and the volume and price of the four countries increased simultaneously; 3) Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) secondary high-end strategic new products D20 & d30 increased by 235%. Looking to the future, The company will continuously upgrade its product structure by deepening four campaigns: 1) V-series is unswerving in tackling tough problems – strive to improve the potential energy of V9 brand (the company established V99 alliance today to help the development of V-series); 2) open up systems, improve quality and expand coverage – improve the control and profit sharing system and continue to promote intensive cultivation in different regions; 3) Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) Activate and highlight the characteristics – create excellence wedding banquet promotion mode, upgrade the old products, expand the scene, supplement the new products and simplify the number; 4) Many measures should be taken to make breakthroughs outside the province – coordinated layout of dual brands (National edge takes the lead in nationalization, main promotion of systems, local highland layout V9), diversified plate building (peripheral, plate, 100 City breakthrough project, tackling 10 “quasi billion yuan” provincial plates), innovative consumption training, and strive to achieve more than 20% of the revenue outside the province in the 14th five year plan.
Exceeding expectations: expansion of V series and outside the province or exceeding expectations to stimulate or accelerate growth
Under the guidance of the “three modernizations” strategy, Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) product upgrading and market expansion are gaining momentum. Specifically, in terms of channels, we believe that one of the core reasons why the company’s channel profits are always relatively stable is the adoption of the “price control and profit sharing” model (“control policy”, “control price”, “control terminal” and “control inventory”);
In terms of products, V series is expected to continue its strong growth trend, mainly due to: 1) clear product structure: the company focuses on V3 and V9, V9 is further divided into premium version and business version (42 degrees and 52 degrees respectively). The light bottle version exits the market, covering more than 700-800 yuan, 1000 yuan and 2000 + price bands, and the high-end product matrix is clear; 2) organizational structure empowerment: set up V9 business department to be responsible for the company’s high-end product line; 3) new channel investment promotion: focus on the 42 degree V9 business version in V9 series (2021) and attract investment alone or give strong channel impetus. 21h1v series has doubled, and we expect that the performance of V series will increase sharply this year, and the CAGR of V series will exceed 100% from 2019 to 2023. Under the background of the company’s 10-year 10 billion project, the revenue of V series during the 14th Five Year Plan period may reach 5 billion yuan, or exceed market expectations. The upgrading of Guoyuan Fourth Development Co., Ltd. is progressing smoothly, and the growth rate of Fourth Development Co., Ltd. in the first half of the year is about 50%, The wholesale price of the new quarto is about 440-450 yuan, the terminal transaction price is increased to 450-480 yuan, and some regions stand firm at 480 yuan. Driven by the quota system + control of the inventory of the old quarto, it is expected that the subsequent quarto price is expected to increase to more than 500 yuan, and the opening series is expected to continue to grab the market share of secondary high-end liquor.
In terms of the market in the province, Southern Jiangsu is expected to become another growth pole of Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) in the province. The main reasons are as follows: 1) the market capacity of Southern Jiangsu such as Su Xi Chang is large, and the mainstream consumer price band is higher than the average level. At present, the proportion of national edge in southern Jiangsu exceeds that of Nanjing; 2) Southern Jiangsu has an important strategic position. Southern Jiangsu will be the base for developing the markets of Shanghai and Zhejiang in the future.
In terms of the market outside the province, at present, the market outside the province is characterized by structural upgrading and accelerated expansion. Since the dual brand strategy was put forward in 19, the foreign edge of the province accounts for 50%. Referring to the volume of Yanghe River and the expansion rhythm outside the province, it is expected that when the volume of Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) 10 billion, the proportion outside the province is expected to reach about 8%, that is, the CAGR of the market outside the province will exceed 32% from 2019 to 2023, and the expansion outside the province is expected to accelerate and the process of nationalization will be further.
Promotion of equity incentive: the company plans to launch equity incentive in 2020. If equity incentive is implemented in the future, it will effectively stimulate the enthusiasm of management and employees and accelerate the development and potential release of the company.
We believe that the company’s 14th five year plan is rational and positive (in 2021, the revenue target is 5.9 billion yuan, striving for 6.6 billion yuan / net profit target is 1.8 billion yuan, striving for 1.9 billion yuan; in 2025, striving to achieve revenue of more than 10 billion yuan, striving for 15 billion yuan). The company’s development goal is clear. In the future, the company will continue to improve its product matrix, continue to cultivate in the province and accelerate its expansion outside the province. We are optimistic about the long-term growth of the company.
Profit forecast and valuation
It is estimated that the company’s revenue growth from 2021 to 2023 will be 26.9%, 25.5% and 24.5% respectively; The growth rate of net profit attributable to the parent company was 26.1%, 27.8% and 27.7% respectively; EPS is 1.6, 2.0 and 2.6 yuan / share; PE was 35, 27 and 21 times respectively. Considering the strong certainty of the company’s annual performance, the current valuation is cost-effective, and the buy rating is maintained.
Catalyst: Baijiu demand exceeds expectations; Guoyuan moving pin continued to improve.
Risk warning: Overseas epidemic affects China’s two outbreak or prevention and control upgrade, affecting Baijiu‘s overall sales recovery. The situation of Guoyuan movable pin was less than expected.
