\u3000\u30 Shenzhen Fountain Corporation(000005) 96 Anhui Gujing Distillery Company Limited(000596) )
Event overview
The company released the performance forecast for 2021, realizing a total operating revenue of 13.271 billion yuan, a year-on-year increase of + 28.95%; The net profit attributable to the parent company was 2.291 billion yuan, a year-on-year increase of + 23.54%; The net profit deducted from non parent company was 2.201 billion yuan, a year-on-year increase of + 24.14%, which was basically in line with expectations.
Analysis and judgment:
We believe that the products in many price segments of the company have good performance
In 2021q4, the company achieved a total operating revenue of 3.169 billion yuan, a year-on-year increase of + 42.58%; The net profit attributable to the parent company was 322 million yuan, a year-on-year increase of + 1.66%; The net profit deducted from non parent company was 299 million yuan, a year-on-year increase of + 10.06%. We believe that with the implementation of the regional sinking action, Gu 5 and gift still have growth in the county and township level market; As the current leading product, gu8 has recovered its terminal profit, increased both volume and price, and performed very healthy.
The recovery of consumption environment and consumption upgrading trend in the province are obvious
The overall consumption environment in Anhui has improved significantly without being affected by the epidemic in a wide range throughout the year. Driven by Hefei, the provincial capital, Anhui’s economic growth rate exceeded the national average in 21 years, and the upgrading speed of consumption in the province is also very obvious. Thanks to the improvement of the overall consumption environment, Gujing as a Baijiu in the province has grown very well and has considerable sustainability.
The product is closely related to the upgrading trend of the mainstream Baijiu consumption price belt in the province, and has the certainty of steady growth.
From the perspective of the competitive environment in the province, Gujing, as the representative of Anhui local wine, has never lost the old eight famous wine genes in the confrontation with second-line famous wines. Among the main competitive products in the province, Anhui Kouzi Distillery Co.Ltd(603589) is currently in the period of adjustment. Although the price of more than 100 yuan is growing rapidly, the volume is still small, and the momentum of impact to higher prices is weak. From the perspective of internal business elements, Gujing’s channel work with strong control as the core is very solid, and the consumer cultivation work is also in progress in an orderly manner. It has firmly grasped the price upgrading trend in the province, cooperated with a number of work systems, and implemented the strategy without errors. In the medium and long term, Gujing’s steady growth has high certainty.
Investment advice
According to the company’s performance forecast, the profit forecast is increased. From 2021 to 2023, the operating revenue is increased from RMB 12.21/14.30/16.66 billion to RMB 13.271/16.207/19.179 billion, with a year-on-year increase of + 28.9% / + 22.1% / + 18.3%; The net profit attributable to the parent company was adjusted from 23.3/28.5/3.38 billion yuan to 2.291/28.70/3.503 billion yuan, a year-on-year increase of + 23.6% / + 25.2% / + 22.1%; EPS was adjusted from 4.37/5.14/6.00 yuan to 4.33/5.43/6.63 yuan. The closing price was 195.6 yuan on March 11, 2022, and the corresponding valuations were 45.12/36.03/29.52 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.
