Kweichow Moutai Co.Ltd(600519) (600519)
event
Kweichow Moutai Co.Ltd(600519) announcement: according to preliminary calculation, the company will produce 56500 tons of Maotai base liquor and 28200 tons of series base liquor in 2021; It is estimated that the total operating revenue will be about 109 billion yuan in 2020, with a year-on-year increase of about 11.2%; The net profit attributable to the shareholders of the listed company is expected to be about 52 billion yuan, a year-on-year increase of about 11.3%. In 2021q4, the total operating revenue was about 31.95 billion yuan, a year-on-year increase of about 12.4%, and the net profit was about 14.73 billion yuan, a year-on-year increase of about 14.5%.
Key investment points
There will be steady progress in 2021, with price as the main driving force of performance. In 2021, the company made steady progress as a whole, and the profit growth was faster than the revenue growth, which showed that the price was the main driving force for the performance in 2021. Among them, the revenue of Maotai liquor increased by 9.9% year-on-year, which contributed to the small single digit growth (the total investment is expected to be about 36000 tons), and the upgrading of structure and the proportion of direct channels promoted the ton price, thus contributing to the large single digit growth; The revenue of series liquor increased by 26.1% year-on-year. It is expected that the contribution of volume increase is limited, and the main driving force is price. From the perspective of 2021q4, the growth rate of 21q4 company’s revenue and net profit attributable to the parent company increased month on month, of which the revenue of Maotai liquor 21q4 increased by 14% year-on-year; The revenue of series liquor increased by 2% year-on-year, and the growth rate of profit side exceeded that of revenue side, or because: 1) the company allocated 600-800 tons of 1479 yuan pumao to dealers in preparation for the Spring Festival; 2) 21q4 is equipped with more non-standard and old wine products.
The capacity target at the beginning of the year will be exceeded in 2021, and the output growth in 2022 can be expected. According to preliminary calculation, in 2021, the company produced 56500 tons of Maotai liquor and 28200 tons of series liquor base liquor respectively, with a year-on-year increase of 12.5% and 13.1% respectively. Thanks to the completion of the expansion of production in China during the 13th five year plan, Maotai liquor and series liquor base liquor exceeded the targets of 55300 and 29000 tons at the beginning of the year respectively. The successive completion of series liquor technical transformation projects during the 14th five year plan will continue to contribute to the growth of volume. Looking forward to 2022, judging from the base liquor production of Maotai in the past 4-5 years and the Maotai liquor input this year, we expect that the Maotai liquor volume may increase by more than 4000-5000t next year, thus contributing a large proportion of income (without considering the price increase).
Marketing reform or accelerated landing, price increase should not be a game point in time. In November, we clearly pointed out the possibility of the implementation of marketing reform in “marketing reform or accelerated implementation, looking forward to exceeding the expected performance in 2022” (policy continuity: the goal of marketing reform is sustainable, so it can be expected); Specific possible plans for marketing reform (in addition to continuing to increase the proportion of direct sales channels, or by adjusting Maotai liquor sales channels, part of the external profits will be included in the joint-stock company); Possible schemes for direct price increase (ex factory price from 969 yuan to 1199 yuan and retail price from 1499 yuan to 1899 yuan). At present, the market generally believes that some dealers have paid 969 yuan for flying Maotai in January + the company released new treasures with an ex factory price of more than 4000 yuan, and raised the price of Maotai new treasures and Maotai aged liquor 15, so it is considered that the expectation of Maotai price increase / reform is weakened. We believe that the price increase in pumao is still a high probability and should not be a game time node. A number of recent measures can be understood as “price increase preparation”; The price increase method may still adopt multiple measures such as “ex factory price, retail price and smart Maotai construction” repeatedly mentioned before to control prices and thicken profits.
Kweichow Moutai Co.Ltd(600519) three major expected differences give it the possibility that its performance will exceed expectations in 2022. At present, the market generally believes that Kweichow Moutai Co.Ltd(600519) performance growth is too stable and difficult to have poor expectations; We believe that Kweichow Moutai Co.Ltd(600519) still has three major expectations
First, the volume exceeded expectations. From the perspective of volume, considering that the amount of Maotai liquor put in this year is only about 36000 tons, which is expected to be 50000 tons at the end of the 14th five year plan, the four years back in 2022 will be the big year of Maotai base liquor production, and the volume of Maotai liquor is expected to increase or exceed the expectation in 2022;
Second, the price exceeded expectations. From the perspective of price, considering that non-standard price increases have limited profit thickening, the proportion of direct channels will be further increased (in line with the strategy of strengthening price control). At the same time, more marketing reforms may also be conducive to thickening performance.
Third, the strength and speed of marketing reform may exceed expectations. It is expected that the new chairman will bring more effective & more than expected marketing reform measures (the specific or implementation scheme has been described above), and the catalytic time point is expected to be at the beginning of next year.
In the short term: Maotai liquor series is driven by two wheels, and a series of measures taken by new leaders will be implemented. In terms of Maotai liquor, the recent batch price of Feitian Maotai liquor is about 2650-2800 yuan / bottle. With the continuous release of price increase dividends of non-standard products in the first half of the year, the structural upgrading, the gradual elimination of the impact of taxes and fees, and the cancellation of non-standard unpacking policy, the batch price fluctuation is gradually reduced. It is expected that 21q4 Maotai liquor will continue to achieve steady growth; In terms of series liquor, with the in-depth implementation of the “big single product” strategy, the product cluster with Maotai Prince liquor as the core has performed well: in the past 20 years, the sales of Maotai Prince liquor has exceeded 4 billion yuan, and the revenue of Han sauce, Lai Mao, Guizhou Daqu and other series liquor products has also exceeded 1 billion yuan. Under the background of the expansion of secondary high-end liquor and the continuous deduction of sauce liquor fever, 21q4 series wine is expected to further upgrade its structure while increasing its volume. After the new leader took office, measures such as double section incremental launch, empty bottle replacement and cancellation of non-standard unpacking have been implemented one after another. In the future, more practical measures may be launched to stabilize prices.
In the medium term, the performance growth in 2021 may accelerate month on month, and the target setting is more rational. The company previously said that the revenue target for 2021 was 10.5%. We think the target setting is more rational. The main reasons are as follows: 1) through the resumption of previous performance targets and actual performance growth, the actual growth rate is often higher than the performance target; 2) From the perspective of the 14th five year plan of the group, we believe that in addition to Maotai Co., Ltd., Xijiu and other subsidiaries of the group will also contribute part of the performance (it is expected that the production capacity of Xijiu will reach nearly 50000 tons during the 14th Five Year Plan period) to achieve the group’s revenue target of 180 billion yuan. Adding that Maotai may raise prices in the next five years, it is reasonable to set the revenue growth rate at 10.5% in 2021; On the profit side, considering that Maotai Co., Ltd. is the main source of profit increment of the group, it is expected that the profit growth rate of Maotai will be higher than that of revenue during the 14th Five Year Plan period. At the same time, the price increase of Maotai products will also boost the profit growth rate to achieve high growth, so as to help the group achieve the goal of the 14th five year plan.
In the long run: entering the 14th five year plan, take the road of Maotai and the “five line” development road. Considering the strong demand side performance, the company’s increasing supervision and steady increase in output (the production target of Maotai base liquor is 55300 tons in 2021 and the production target of series liquor is 29000 tons; during the 14th Five Year Plan period, Maotai series liquor is planned to achieve double production capacity of 56000 tons) The technological transformation project has been steadily promoted (the Maotai liquor technological transformation and expansion project in the 13th five year plan of Maotai has been fully completed in September 2020, the new design capacity of 4032 tons of Maotai base liquor will be released in 2021, and the technological transformation project of 30000 tons of Maotai flavor series liquor has been steadily promoted), the channel reform has been accelerated, and it is expected that the volume and price of Maotai liquor in 2022 will exceed the expectation to accelerate the reporting end, In the 14th Five Year Plan period, the company will take the road of Maotai, the “five line” development road, adhere to the “double building” and “double consolidation”, focus on the main business, adjust the structure, strengthen supporting facilities, construct the ecology, and have strong certainty of future performance.
Profit forecast and valuation
It is estimated that the revenue growth of the company from 2021 to 2023 will be 11.2%, 17.0% and 13.5% respectively; The growth rate of net profit was 11.3%, 18.4% and 15.2% respectively; EPS were 41.4, 49.0 and 56.4 yuan / share respectively; The corresponding PE is 50, 42 and 36 times respectively. Considering the strong growth and performance certainty of the company, the buy rating is given.
Risk tips: 1. Macroeconomic downturn; 2. The impact of the epidemic exceeded expectations.
