Kweichow Moutai Co.Ltd(600519) (600519)
event
On December 31, 2021, the company released the production and operation in 2021: about 56500 tons of Maotai base liquor and about 28200 tons of series base liquor in 2021; It is estimated that the total operating revenue in 2021 will be about 109 billion yuan (including Maotai liquor revenue of about 93.2 billion yuan and series liquor revenue of about 12.6 billion yuan), an increase of about 11.2% at the same time; The net profit attributable to the parent company was about 52 billion yuan, an increase of about 11.3% at the same time.
Key investment points
In 2021, it will be concluded successfully, with a rich matrix of non-standard added new products
According to the production and operation in 2021, the base liquor will be 56500 tons in 2021, an increase of 12.5% at the same time; 28200 tons of series wine, an increase of 13.3%. Base liquor continued to grow, opening a solid foundation for the company in the first year of the 14th five year plan.
In 2021, the revenue of Maotai liquor was about 93.2 billion yuan, an increase of 9.9% at the same time; The revenue of series liquor was about 12.6 billion yuan, an increase of 26.11%, accounting for 11.6%. Among them, the revenue of 2021q1-q3 series liquor was 9.540 billion yuan, an increase of 36.3%.
Since 2021, the company has continuously enriched the matrix of non-standard products and improved its brand strength through non-standard products. Maotai 1935 was launched at the end of September, with an ex factory price of 788 yuan, a retail price of 1188 yuan and a card price band of 1000 yuan, filling the blank price band of pufeihe series liquor. At the end of December, the rare Maotai was launched, with an ex factory price of 4299 yuan. The price band between the high-quality Maotai and the 15-year-old Maotai is expected to be listed in a small number. The company will continue to enrich the matrix of non-standard products in the future.
Optimization and adjustment is an important aspect of Maotai’s new measures to change its commander
At the end of August, Ding Xiongjun became the chairman of Maotai and put forward the direction of the company’s reform: marketization and legalization, releasing positive signals. Recently, Maotai cancelled the unpacking order of Pufei and added a 12 bottle specification Maotai wine per box, which is specially used for unpacking and retail to meet the differentiated needs of target groups. We believe that the reform process of Maotai is expected to accelerate in 2022.
During the 14th Five Year Plan period, the optimization and adjustment of Maotai was an important focus, which was mainly divided into price adjustment, product structure adjustment and channel structure adjustment. In terms of price, the company has cancelled the unpacking policy and returned to marketization. The wholesale prices of whole Mao and scattered Mao are expected to continue to narrow. We expect Maotai to raise prices at least once during the 14th Five Year Plan period. In terms of product structure, we believe that the company will continue to adjust the proportion of non-standard products to drive the ton price increase. This is also confirmed by the price increase of non-standard products since this year; The product structure of series liquor will continue to be optimized, the “big single product” strategy will be implemented internally, the “1 + n” big single product group with Maotai Prince liquor as the core, and Han sauce and Guizhou Daqu have become 1 billion big single products. The adjustment of channel structure is another important focus during the 14th Five Year Plan period. In the future, the dealer quota will remain unchanged. The company will focus on developing direct channels (including self-supporting, e-commerce, supermarket and enterprise group purchase). Since 2018, the company has paid more attention to direct marketing channels, especially in peak seasons such as the Mid Autumn Festival, the national day and the Spring Festival. It has successively signed Maotai quotas with national supermarkets such as Yonghui, regional supermarkets such as Better Life Commercial Chain Share Co.Ltd(002251) , e-commerce such as tmall and Jingdong, so as to increase the breadth, depth and frequency of contact with consumers and increase the bottle opening rate of Maotai in that year.
Profit forecast
We continue to be optimistic about the brand moat, the medium and long-term pattern of high-end liquor is still stable, and the role of Maotai sea god needle is still obvious. According to the performance forecast, we slightly adjusted the EPS from 2021 to 2023 to 41.39/48.06/55.02 yuan respectively (the previous values were 42.07/48.64/55.72 yuan respectively), and the corresponding PE of the current stock price was 50 / 43 / 37 times respectively, maintaining the “recommended” investment rating.
Risk statement
Macroeconomic downside risk, epidemic drag on consumption, less than expected capacity expansion, less than expected growth of direct channels, less than expected reform process, rapid upward risk of rating, etc.
