\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 58 Wuliangye Yibin Co.Ltd(000858) )
In the past ten years, the price of Pu five has not been high. The trend of Baijiu price upgrading has made Wuliangye Yibin Co.Ltd(000858) have higher cost performance, faster sales and lower inventory. The Baijiu industry once reached the peak price of that time before 2012, before the three official business expenses restriction. In the ten years in a flash, apart from Moutai’s strong brand power, it constantly broke through the ceiling of the industry price, and the rest of the products did not break through itself. The thousand price belt seemed to become a wall without shape, which separates Moutai from the value of other famous liquor. However, the logic of consumption upgrading in Baijiu industry has remained unchanged in the “second consumption era” and “third consumption era”, even more prominent under the spice of hot sauce. As a strong fragrance, Wuliangye Yibin Co.Ltd(000858) has a more cost-effective brand. Even though the situation is disturbed, the demand for high-end Baijiu is also more rigid. During the Spring Festival in 2022, the Wuliangye Yibin Co.Ltd(000858) sales were booming, and the willingness to replenish goods was strong after the year.
In the next ten years, it is almost impossible to have a deeply nationalized independent brand product that reaches the price of puwu. The pattern problem has been considered too much, and the sustainable growth is worthy of the current valuation of 20-25 times. The core competitiveness of high-end Baijiu lies in brand. As a 40 billion level national product, Pu five has enough confidence in the price range of 1000 yuan. No matter the thickness of the brand history or the general recognition of the consumers nationwide, it is difficult for the competitors to compete with them for the next ten years. The high end liquor pattern is relatively stable. In the short term, the birth and performance of Maotai 1935 have shaken the market’s confidence in Wuliangye Yibin Co.Ltd(000858) , but we believe that when the market goes down, the market is prone to over amplify the noise and produce anxiety. If we return to rational analysis, the actual sales performance and sustainable growth of puwu deserve a valuation 20-25 times higher than that at present. At present, an oversold opportunity has been formed, and the value can be repaired.
In the short term, the ex factory price of Wuliangye Yibin Co.Ltd(000858) is 969 yuan, which will probably reach more than 1000 yuan in 2022. When Wuliangye Yibin Co.Ltd(000858) negative information is widely spread in the market, Wuliangye Yibin Co.Ltd(000858) has the ability to break the negative view with one move. In 2022, the company raised the ex factory price of puwu plan to 1089 yuan / bottle, solidified the quota proportion inside and outside the plan, and substantially increased the ex factory price of puwu plan to 969 yuan / bottle. We expect the cost price of dealers to increase by more than 5% compared with 2021, providing a source of profit thickening. This also shows the company’s determination to support the price in 2022. Even if the dealers have complaints in the short term, it will be strictly implemented. We are confident that the price of puwu is more than 1000 yuan. Especially after the change of management is stable, the company is expected to further introduce reform measures, strengthen channel supervision and market inventory, and improve market expectations. We believe that the brand thickness of Wuliangye Yibin Co.Ltd(000858) gives the new team the confidence to break the negative views of the market. Similarly, the new team also needs to obtain the recognition of the market through the first report card or seek reform in time.
Profit forecast and investment rating: we expect the company’s EPS from 2021 to 2023 to be 6.03 yuan, 7.16 yuan and 8.39 yuan respectively, maintaining the “buy” rating of the company.
Risk factors: macroeconomic uncertainty risk; Industry competition intensifies risks
