\u3000\u30 Shenzhen Fountain Corporation(000005) 68 Luzhou Laojiao Co.Ltd(000568) )
Event: Luzhou Laojiao Co.Ltd(000568) announcement: after preliminary accounting, the revenue in 2021 will reach 20.384 billion, with an increase of 22.4%; The net profit attributable to the parent company was 7.85 billion, an increase of 30.7% at the same time; Among them, Q4’s revenue was 6.274 billion, an increase of 24.1%; The net profit attributable to the parent company was 1.573 billion, an increase of 32.2% at the same time.
The proportion of medium and high-end products increased, and the structure continued to improve. The growth rate of 21q4 performance is higher than that of the whole year, which is even more valuable under the rhythm of accurate delivery and inventory reduction in the fourth quarter. The net interest rate of 21 years was 38.5%, up 2.5pct year-on-year, mainly due to the continuous increase in the proportion of medium and high-end products driven by Guojiao and the improvement of expense rate brought by lean management. In terms of products, it is expected that the proportion of national cellar products will continue to increase, and the growth rate is better than the whole, driving the gross profit margin upward; The sales rhythm of cellar age products is adjusted and Tequ products are expected to stop sliding.
Quota system, accurate delivery and enhanced consumer investment. In the past 21 years, the company thoroughly implemented the development policy of “fine management to increase benefits and precision marketing to expand the market”, and promoted the benign growth of business scale and profitability. 2021 had a good start and a positive completion. Since May, the strict quota system has been implemented, and the goods have been delivered accurately according to the inventory. At the end of the year, the overall inventory decreased significantly year-on-year, and the national cellar inventory in East China decreased significantly year-on-year. In addition, the dealers fed back that the marketing strategy of Guojiao company was further optimized: 1) the distribution was changed to monthly quota; 2) Propose to do a good job in favorable prices and enrich the direct profits of dealers, hoping to create scarcity and reduce relevant cost investment; 3) Pay more attention to consumer input in terms of cost; 4) Build a professional consumer oriented promotion team in terms of personnel. We believe that brand power will play an increasingly important role in the Baijiu industry competition. Continuous consumer input and strong executive teams will help companies to harvest high-end liquor in the long run.
The 22 year Spring Festival channel feedback is good, and the low-grade national cellar has high cost performance. At the end of the 21st century, the inventory of Guojiao products in East China and other core regions decreased significantly compared with the same period, and the customer investment has advantages, laying a good foundation for a good start in the past 22 years. According to the current grassroots channel research, the completion of Guojiao collection is good and is expected to exceed market expectations. More than 30% of the delivery progress is fed back, and the inventory is maintained for more than one month. In terms of products, the channel feedback shows that the growth of high-grade national cellars is stable, and the low-grade national cellars have a leading position in the price belt and high cost performance. The growth rate is fast during the Spring Festival. At present, the proportion in the overall income has increased steadily, and they have a strong position to undertake consumption upgrading in low-grade areas such as North China. They are optimistic about driving the overall market share of the company in the future. In terms of liquor series, cellar age and Tequ have been adjusting the price and rhythm, promising to contribute to the growth rate after stopping slip. At the same time, it is emphasized that the core price band of upgrading the secondary high-end structure of Tequ series with a card space of Tus-Design Group Co.Ltd(300500) yuan is undervalued by the market. In terms of subregions, the feedback from North China and Northeast China is the most positive, the dealers have the strongest willingness to pay, and East China and southwest China are also relatively benign.
The operation is stable and upward, and we are optimistic about the release of brand potential energy. In terms of management, the transfer of senior management positions does not affect the stable and upward operation. The company has always attached importance to the cultivation of new people, and its management ability is also obvious in the industry. It is optimistic that the continuous optimization of the company’s management and incentive will bring vitality. We believe that the current active cultivation of consumers and the release of brand potential energy may promote the performance to exceed the expected growth in the next three years, and the set goal of equity incentive of the company is expected to be exceeded.
Profit forecast and investment suggestions: maintain the “buy” rating. According to the company’s performance express for 21 years, we slightly adjusted the profit forecast. It is estimated that the operating revenue from 2021 to 2023 will be 20.4/249/29.9 billion yuan respectively, with a year-on-year increase of 22% / 22% / 20%; The net profit was 7.9/10/12.2 billion yuan respectively, with a year-on-year increase of 31% / 27% / 22%, corresponding to EPS of 5.36/6.81/8.33 yuan respectively (the previous time was 5.18/6.51/8.11 yuan), corresponding to PE of 30 / 25 times from 2022 to 2023, which is highly recommended.
Risk tips: the risk of continuous spread of the epidemic, the slowdown in the promotion of new products, and the risk of food quality accidents.
