\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 809 Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) )
Event overview
The company issued a business express. From January to February 2022, it is expected to achieve a total operating revenue of more than 7.4 billion yuan, a year-on-year increase of more than + 35%; The net profit attributable to the parent company is expected to be more than 2.7 billion yuan, with a year-on-year increase of more than + 50%. The excellent performance of Fenjiu mainly comes from the substantial growth of medium and high-end products such as Qinghua Fenjiu series.
Analysis and judgment:
Multi price belt products continue to make efforts, and the product structure is continuously optimized
According to the data, from January to February 2021, the company achieved a total operating revenue of 5.481 billion yuan and a net profit attributable to the parent company of 1.8 billion yuan. From the perspective of product structure, Bofen is still unstoppable below the price of 100 yuan, while blue and white products have begun to take shape inside and outside the province. Since the launch of the Renaissance version, the company has been strategically focusing on the price of 1000 yuan and rapidly shaping the height of the brand. With the rapid development of high-priced products, laobaifen and Panama, the waist products of Fen Liquor, also began to show some performance in the markets outside the province, and the follow-up is worth looking forward to.
The proportion outside the province exceeds that inside the province, and the nationalization strategy has achieved initial results
From the perspective of regional structure, the volume of markets in Shanxi Province and around Shanxi (Beijing, Hebei, Shandong, Inner Mongolia and Northern Henan) is increasing steadily. The stability of the large base market has laid a good foundation for the nationalization of Fenjiu, while the base number of East China and South China in the early stage is small. In recent two years, with the gradual recognition of fragrance products by the market, it has achieved leapfrog development. At present, the market share outside the province has steadily exceeded that in the province. The nationalization strategy has achieved initial results, and the follow-up momentum is good.
Strengthen high-end positioning and clear brand strategy
In recent years, China’s consumer market has gradually deepened its understanding of “category, brand and quality”, and the profound internal strength of Fen Liquor is highly consistent with this trend. This is the source of the current round of rapid growth of Fen Liquor. Therefore, at the marketing level, Fen Liquor strengthened its high-end brand positioning of “Chinese wine soul”, highlighted the long board, further strengthened its organizational capacity-building, vigorously carried out consumer cultivation, and gradually supplemented the short board. In the long trend of “brand, quality” cognition, Fen Liquor will become a phenomenal brand representative for Baijiu industry’s sustainable growth.
Investment advice
We think the Baijiu sector has good fundamentals. According to the company’s performance forecast data, we adjusted the company’s 20212023 year business income 201.20/271.96/352.88 billion yuan to 211.01/275.19/341.82 billion yuan, up +50.8%/+30.4%/+24.2%. Raise the forecast of net profit attributable to parent company of RMB 5.484/73.88/9.656 billion to RMB 5.529/79.99/10.423 billion, a year-on-year increase of + 79.6% / + 44.7% / + 30.3%; Up regulation of eps4 49 / 6.06/7.91 yuan to 4.53/6.56/8.54 yuan. The closing price on March 9, 2022 was 273.95 yuan, and the corresponding valuations were 60.46/41.79/32.07 times respectively. Maintain the “buy” rating.
Risk tips
① the epidemic situation continues to exceed expectations; ② Economic downturn leads to weakening demand; ③ Food safety issues.
