Kweichow Moutai Co.Ltd(600519) (600519)
Event: the company released the production and operation data for 2021. In 2021, the company is expected to achieve a total operating revenue of about 109 billion yuan (including about 93.2 billion yuan of Maotai liquor and about 12.6 billion yuan of series liquor), an increase of about 11.2% year-on-year; 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%. At the same time, the company produces about 56500 tons of Maotai base liquor and about 28200 tons of series base liquor.
Key investment points
The revenue and profit grew steadily, and the series of wines grew at a high rate throughout the year. According to the announcement, the company is expected to achieve a total operating revenue of about 109 billion yuan in 21 years. Year on year growth of 11.2%. Among them, Maotai liquor is expected to realize an income of about 93.2 billion yuan, a year-on-year increase of 9.9%; The revenue of series liquor was about 12.6 billion yuan, with a year-on-year increase of 26.1%. The revenue of series liquor increased rapidly throughout the year, accounting for about 11.56%, with a year-on-year increase of + 1.36 PCTs. It is estimated that the company’s operating revenue in 21q4 is about 31.9 billion yuan, a year-on-year increase of 12.4%. Among them, the revenue of Maotai liquor was about 28.2 billion yuan, a year-on-year increase of 14.3%; The revenue of series liquor was about 3.1 billion yuan, a year-on-year increase of 2.3%. In the fourth quarter, under the background of Maotai liquor volume, the growth rate of series liquor slowed down. In terms of profit, the company is expected to realize a net profit attributable to the parent company of 52 / 14.7 billion yuan in 21 years / 21q4, with a year-on-year increase of 11.3% / 14.5%. 21q4’s profit growth has accelerated, the new management’s performance has been accelerated, the company’s market-oriented reform has been accelerated, and the sales channels have been more smooth, which has accelerated the company’s performance in the fourth quarter. In terms of production capacity, under the background of the full completion of Maotai liquor technical transformation and expansion project in the 13th five year plan, the company began to release production capacity in 21 years. The company produced 56500 / 28200 tons of Maotai base liquor / Series liquor in 2021, with a year-on-year increase of 12.5% / 13.1%, providing guarantee for the medium and long-term performance growth of the company in the future.
Adjust product structure & channel to promote reform and boost performance growth in 2022. According to channel feedback, at present, the overall demand of Maotai is strong and stable, and the main single product Feitian Maotai direct sales, e-commerce, supermarkets and other channels are accelerating. After the new chairman took office, the company released a positive communication signal with investors, and the adjustment of product structure and channels continued. After the launch of the high-end new product “Maotai 1935” this year, the company released the super high-end single product Maotai treasures at the end of December, which is positioned between Pufei and Maotai for 15 years. The strategic action of successively launching high-end large single products further shows the company’s determination to upgrade its product structure, so as to help improve the company’s gross profit margin and expand its brand influence. The future value growth of the company mainly comes from three aspects. First, the brand strength is continuously strengthened, and the brand moat enhances the company’s anti risk ability. Second, the channel reform has brought about the improvement of ton price and channel control. Third, the ton price increase brought by structural upgrading. At the same time, the current batch price and ex factory price have reserved sufficient room for price increase for the company in the future. We are optimistic about the long-term investment value of the company.
Investment suggestion: we maintain the company’s profit forecast. It is estimated that the company’s operating revenue from 2021 to 2023 will be 109.336/123.846/140.912 billion yuan respectively, with a year-on-year increase of 11.6% / 13.3% / 13.8%. The net profit attributable to the parent company was 52.875/60.529/69.040 billion yuan, with a year-on-year increase of 13.2% / 14.5% / 14.1%. The corresponding EPS is 42.09/48.18/54.96 yuan respectively. Consider premium Baijiu and high growth rate to give valuation premium, give the company 22 years PE50X valuation, maintain the company “buy -A” rating.
Risk warning: food safety problems, industry competition intensified, Baijiu consumption tax rate reform possibility.
