\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 58 Wuliangye Yibin Co.Ltd(000858) )
At present, Wuliangye Yibin Co.Ltd(000858) is significantly lower than that of Maotai and Luzhou Laojiao Co.Ltd(000568) and there is more room for repair. We believe that it is mainly due to the weakening of the approved price since the second half of 21 and the uncertainty caused by the change of management. The price is determined by the relationship between supply and demand. The demand for high-end liquor is growing steadily, and the demand is carefree; From the supply side, through the in-depth resumption of Wuliangye Yibin Co.Ltd(000858) market in recent seven years, we found that the volume pressure is the most critical factor restricting the price, and the company has a variety of effective channel management means to assist the upward pricing. Under the background of low volume pressure in the past 22 years and the solution of problems left over by history, the company has more methodical financial management means for channels, and the annual cost of dealers is more stable. With the introduction of price support measures, we expect that the approval price will change from weak to strong and break through upward this year. The new management has rich experience, and this year is the first year of the new team, with a strong willingness to reform. With the help of potential catalysts such as price improvement and deepening reform, the valuation repair can be expected.
The valuation discount is essentially due to concerns about growth. Historically, Wuliangye Yibin Co.Ltd(000858) has not many stages of significant discount relative to the high-end liquor sector (Maotai and Luzhou Laojiao Co.Ltd(000568) ). The last time was the end of 20162017. It began with continuous price increases and upside down problems, and finally achieved remarkable reform results and channel profits. We believe that this valuation discount is similar to the previous one, mainly due to the thin profits of the industrial chain and the uncertainty caused by the change of management, which leads to concerns about the long-term growth capacity of the company in the future.
What is behind the rating: the demand side is stable, and the supply side has a greater impact. The price is determined by the relationship between supply and demand. It is one-sided to extrapolate linearly from the rating performance in the past few months and predict the future trend. 1) Demand side: in addition to Wuliangye Yibin Co.Ltd(000858) , the wholesale price of large single products such as Maotai, Guojiao and qinghualang has increased steadily in the past two years, and there has been a cumulative increase of more than double digits since 2020; Last year, there was no worry about demand. The problem of transit warehouse in 2020 was solved in 2021. There were many grassroots research feedback, with obvious increase in discussion and strong dynamic sales; The 22 year Spring Festival survey shows that the situation around the country is still stable. 2) Supply side: by reviewing the pressure of Wuliangye Yibin Co.Ltd(000858) volume increase, channel control measures and price trend in recent seven years in stages, we find that the impact of volume increase on the price can not be ignored. It is difficult for the price to show obvious performance in the five volume years (2018 and 2021), while the channel control is more strict in the years (2016, 2017 and 2020) with little volume increase pressure, and the price has increased significantly; There is also a 25% revenue growth target in 2019. Therefore, after strict control of goods, it is still necessary to achieve the target in large quantities. Therefore, the price fluctuates greatly during the year.
Why do we think that this year’s rating is expected to change from weak to strong and break through upward. According to the research feedback of the Spring Festival in 22, the high-end liquor sales continued to be stable and the demand side was worry free. On the supply side, compared with the previous year, there are four major changes this year, which are favorable for the upward rating: 1) there is little growth pressure in the whole year, and the determination to support the price is stronger; 2) The historical problems left over by the postponement of last year’s planned volume have been solved, and 22 young people have taken up the battle; 3) Financial means are more structured: on the one hand, the proportion of payment is more rational, the financial pressure of dealers is reduced in the first quarter, so as to avoid the rejection of goods by channels in order to recover funds; on the other hand, the policy on the use of acceptance bills is significantly tightened this year, so as to prevent dealers from selling goods at a large amount of parity or at a low price in order to earn acceptance interest; 4) Play a game of chess, and the cost is stable throughout the year. With the launch of the follow-up channel price control policy, it is expected that the wholesale price will change from weak to strong and break through upward this year.
Management changes are implemented and we look forward to the deepening of reform. 1) The previous reform achieved fruitful results and laid a solid foundation for deepening the reform: the fruitful results of the previous reform cannot be ignored because of weak wholesale prices and insufficient profits of dealers. The next reform of the company is to stand on the shoulders of the previous reform. The flat channel reform has significantly improved the problem of big business, the digital system has made the channel management more accurate, and the market operation under the theater system more accurate and flexible. 2) With the new management centered on the core team of the previous session, the reform is expected to continue and deepen: the new management team has rich industry experience, and the promotion of the last core team makes the strategy continuous, which is expected to further deepen the reform on the basis of the previous reform results.
Investment suggestion: at present, the valuation discount of Wuliangye Yibin Co.Ltd(000858) higher end liquor sector (Maotai, Luzhou Laojiao Co.Ltd(000568) ) is obvious, and there is a large space for repair. Under the background of low volume pressure and the company’s urgent need to ensure favorable price results this year, there are four changes on the supply side, which are favorable for the upward rating. With the introduction of channel management policies in the off-season, we believe that there is a high probability that the rating will be thousands this year. Recently, personnel changes have been implemented, and usually the new management will be more willing to reform after taking office. It is expected that there will be catalysts for price improvement and deepening reform in the future, and the valuation and repair can be expected.
Risk tips: the risk of lower than expected price increase, the risk of repeated global epidemics, the risk of delayed information or untimely update of the public data used in the research report, the risk of deviation between the results and the actual situation caused by insufficient sample data in channel research, and the risk of management replacement.
