\u3000\u3 Shengda Resources Co.Ltd(000603) 369 Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) )
Event: the company issued an announcement. After preliminary accounting, from January to February 2022, the company achieved a total operating revenue of about 2.45 billion yuan, an increase of about 25% year-on-year; The net profit attributable to the parent company was about 940 million yuan, with a year-on-year increase of about 26%.
The Spring Festival collection is active, the sales are good, and the product structure is further optimized. According to the feedback from the Spring Festival channels in Jiangsu and other regions, the dealers of Guoyuan V-series and Kaixi series have received positive payments and benefited from the fine control of the epidemic situation. The announcement confirms the successful start of 2022. In 2021, the company seized the opportunity of upgrading the structure of the secondary high-end price belt, focused on key products, and further optimized the product structure. Specifically, Guoyuan V series has achieved remarkable results in tackling key problems, realizing rapid and large-scale production, which not only improves the company’s brand image, but also brings greater profit elasticity; Guoyuan’s new Sikai has passed smoothly. Since the introduction of the new Sikai in May 21, the channel has been well controlled and the price has been stable.
The restructuring of the brand business department is of great significance, and the V99 alliance improves the joint force of manufacturers. According to the exchange of the company’s 2022 development conference, the company will orderly establish V9, Guoyuan, Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) three brand business departments and Gaogou sales company. This measure is of great significance. Previously, the management functions of the company’s sales department were fragmented or even balanced with each other due to different products and regions, resulting in the company’s weak overall promotion and marketing ability, good “sales” rather than “marketing”. If the corresponding management functions are divided uniformly according to products, it may be conducive to the company’s systematic promotion of marketing measures. In addition, the company has newly promoted the V99 alliance system and selected 99 V-series dealers inside and outside the province to provide one-to-one market guidance, professional skill training and other empowerment, so as to achieve win-win cooperation through value creation and right sharing. The establishment of V99 alliance may help V-series become another growth pole.
Actively expand the market outside the province, and the replication of model market is expected to accelerate the expansion. Relying on the advantages of its own brand, quality and experience of mature tasting mode in the province, the company has increased human and material resources, and achieved remarkable results in market expansion outside the province. For example, some county-level cities in Shandong and Anhui are expanding smoothly, and the sample market is relatively successful. In 2022, it is expected to achieve rapid growth in markets outside the province through model replication.
Investment suggestion: V series continues high growth, smooth four opening and upgrading, and the current price is stable and the inventory is benign. The medium and long-term K-series steady growth ensures the profit elasticity brought by the high growth of the basic sector and V-series, opens the growth space for expansion outside the province, and clearly divides the functions and powers through the brand business division system, so as to improve the promotion and marketing ability. In addition, the company’s equity incentive has been promoted in an orderly manner, and the “14th five year plan” goal is expected to be completed with high quality. It is estimated that the company’s earnings per share in 2021, 2022 and 2023 will be 1.61, 2.05 and 2.52 yuan respectively, maintain the Buy-A investment rating, and give a six-month target price of 62 yuan, which is equivalent to the dynamic P / E ratio of 30x in 2022.
Risk tips: macroeconomic and policy risks, food safety problems, and the risk of development outside the province is less than expected
