\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 519 Kweichow Moutai Co.Ltd(600519) )
Core view
The new management has promoted reform and steadily upgraded the product structure. The company has made great achievements in the market since its listing on Moutai group. Management has played an important role in Moutai’s development as a baijiu. Since taking office, the new chairman has proposed to solve the price problem of Maotai Liquor by market-oriented means, and release positive signals for production capacity, which is worth looking forward to. The company launched two new products, Maotai and Maotai 1935, to further improve the product system and promote structural upgrading. If more than 1000 tons were put into Maotai in 1935, it is expected to add more than 1.5 billion yuan of revenue. The company plans to realize a revenue of 24 billion yuan (21-25cagr + 17.5%) in 2025, with a high growth rate. Maotai liquor has strong profitability. It is estimated that the net interest rates of Maotai liquor and series liquor in 21 years are about 52% and 32% respectively.
Exquisite workmanship, capacity expansion, strengthen direct selling and improve profitability. The superb technology and quality of Moutai liquor are the key to its baijiu.
The basis of leading brands, including Maotai liquor for about 5 years and series liquor for about 3 years from grain input to delivery. Since its listing, the company has promoted the steady expansion of production capacity. At present, the production capacity of Maotai liquor is about 56500 tons; According to the outline of 2035 long-term objectives of Zunyi City, the future production capacity of Maotai liquor is expected to still have room for improvement. With the implementation of relevant projects, the designed production capacity of series wine will reach 56000 tons, and the actual production capacity will be about 65000 tons. The output of Maotai base liquor increased by 16% year-on-year in 18 years, providing flexibility for the growth of Maotai liquor sales in 22 years. We expect it to increase by 9% in 22 years. Since its listing, the company has continued to promote channel reform. Since 2018, the company has expanded direct sales channels, promoted the flattening of marketing, increased the proportion of direct sales revenue and improved profitability. In the first three quarters of 2021, the proportion of direct sales revenue reached 20%.
The price increase of Maotai liquor is expected to increase and consolidate the growth foundation of the 14th five year plan. The terminal demand of Maotai liquor is strong. At present, the wholesale price of whole boxes and bulk bottles of Feitian Maotai has reached about 3130 yuan and 2770 yuan, about 223% and 186% higher than the factory price. The necessity of price increase has increased. In the history of resumption, the price increase of non-standard Maotai is usually ahead of or synchronized with Feitian Maotai. At present, the price of many non-standard Maotai has been increased, and the probability of Feitian price increase has increased. The price increase is of great significance to the long-term growth of Maotai and will effectively consolidate the growth foundation of the 14th five year plan. According to the target of doubling the revenue of Maotai Group in 25 years, the ton price of Maotai liquor needs to be increased by 44%; If Xijiu is stripped off, the ton price of Maotai needs to be increased by 61%; Under this plan, it is necessary to directly raise the price of Maotai liquor. From the perspective of consumption tax, it is more practical to expand the profit tax basis based on the actual role played by Baijiu companies in common prosperity. Therefore, we believe that if we directly increase Baijiu consumption tax rate, in order to protect the interests of state capital in the company, it is more likely to relax the price control.
Profit forecast and investment suggestions
On the premise of the upward sales volume of Maotai liquor, we raised the revenue, gross profit margin and expense rate for 22-23 years, adjusted the forecast earnings per share for 21-23 years to 41.42, 49.63 and 57.23 yuan respectively (the original forecast for 21-23 years was 41.47, 48.62 and 55.40 yuan), maintained 45 times the PE valuation for 22 years, corresponding to the target price of 223335 yuan, and maintained the buy rating.
Risk tip: the risk of insufficient production capacity of base liquor, the risk of increasing social inventory and the risk of environmental deterioration
