\u3000\u3 Shengda Resources Co.Ltd(000603) 589 Anhui Kouzi Distillery Co.Ltd(603589) )
Events
On the evening of March 14, 2022, the company released the performance express of 2021: the revenue in 2021 was 5.029 billion yuan, an increase of 25.37% at the same time; The net profit attributable to the parent company was 1.727 billion yuan, an increase of 35.37% at the same time; Deduct non net profit of RMB 1.484 billion, an increase of 19.45% at the same time.
Key investment points
The price increase caused fluctuations in the fourth quarter, and it is expected to increase the cost this year
According to the performance express, the company’s 2021q4 revenue is 1.4 billion yuan (+ 5.72%), the net profit attributable to the parent company is 577 million yuan (+ 39.93%), and the non net profit is 378 million yuan (- 5.50%).
The lower than expected revenue in the fourth quarter was due to the impact of the company’s increase in the terminal price of products for more than 10 years at the end of last year. During the Spring Festival this year, the terminal price of products for more than 10 years in most markets rebounded by more than 20 yuan, and the overall trend was good; The growth rate of deducting non net profit is slower than that of revenue, which is the sales expense confirmed in the fourth quarter. It is expected to increase air launch this year.
The gradual reform will be tested by time, and the Jianxiang 518 is expected to become a large single product
During the 14th Five Year Plan period, the company focused on the implementation of the “six improvements” plan, continued to promote the construction of phase I and phase II projects of kouzi Industrial Park, and accelerated the realization of the strategic goal of “10 billion kouzi”.
At present, the gradual reform of the company needs time to test: in terms of equity incentive, the company has completed the repurchase of more than 3.13 million shares, accounting for 0.522% of the total share capital, and has paid a fee of 149 million yuan. We expect the equity incentive to be implemented in 2022. In terms of products, the price bands of early summer, mid autumn and Jianxiang 518 supplement and card slot for 6 years, 10 years, 20 years and 30 years are added. Jianxiang 518 takes the group purchase channel and direct sales channel. At present, the market acceptance is good. It is expected that Jianxiang 518 is expected to become another big single product of the company. In terms of organizational structure, the number of terminal push personnel has increased significantly compared with the past. Manufacturers began to go directly to the terminal to grasp the latest market trends and provide a basis for scientific management of the market. In terms of channels, strengthen the management and assessment of dealers, establish a win-win community of interests for manufacturers, and require dealers to set up a new team for channel promotion with the help of new products in early summer and mid autumn. The willingness of large merchants to cooperate is increasing. In terms of market construction, strictly implement the “one place, one policy”, focus on building a market pattern dominated by group purchase channels and supplemented by traditional channels, constantly improve the market share of medium and high-end products and steadily expand the market scale. In terms of regional expansion, the company further implemented channel sinking in the provincial market, improved the coverage of channel terminals, and stabilized the “basic market” in the province; For markets outside the province, seize the development opportunities of the Yangtze River Delta, Beijing Tianjin Hebei and Dawan District, strengthen the operation of group purchase channels, and constantly expand the “growth area” outside the province.
Profit forecast
We are optimistic that the gradual reform process of the company is expected to be accelerated and that Jianxiang 518 is expected to become a large single product. According to the performance express, we slightly adjusted the EPS from 2021 to 2023 to 2.88/3.65/4.49 yuan (the previous values were 2.89/3.65/4.42 yuan respectively), and the corresponding PE of the current stock price was 23 / 18 / 15 times respectively, maintaining the “recommended” investment rating.
Risk tips
Macroeconomic downside risks, the epidemic drag on consumption, the progress of reform is less than expected, the promotion of equity incentive is less than expected, 518 growth is less than expected, etc.
