\u3000\u3 Shengda Resources Co.Ltd(000603) 919 Jinhui Liquor Co.Ltd(603919) )
Events
On the evening of March 15, 2022, the company released its annual report for 2021: the revenue in 2021 was 1.788 billion yuan, an increase of 3.34% at the same time; The net profit attributable to the parent company was 325 million yuan, with a decrease of 1.95%; Deduct non net profit of RMB 322 million, with a decrease of 2.58%.
The epidemic caused fluctuations in performance in the fourth quarter, and the first quarter is about to start well
The company’s revenue in 2021 was 1.788 billion yuan, an increase of 3.34% at the same time; The net profit attributable to the parent company was 325 million yuan, with a decrease of 1.95%; Deduct non net profit of RMB 322 million, with a decrease of 2.58%. Among them, the revenue of 2021q4 was 447 million yuan, with a decrease of 34.84%; The net profit attributable to the parent company was 82 million yuan, with a decrease of 52.6%; The net profit is RMB 4887 million, less the same as the net profit of RMB 4887 million. It was caused by the epidemic in Lanzhou, Xi’an and other core sales areas of the company in the fourth quarter, which impacted the production and sales work. The gross profit margin was 63.74% (+ 1.2pct) in 2021, including 56.44% (- 5.8pct) in 2021q4, which is the product structure of the company affected by the epidemic in the fourth quarter; The net interest rate is 18.15% (- 1PCT) in 2021, of which 18.24% (- 7pct) in 2021q4, which is due to the increase of salary, social security and depreciation expenses. Contract liabilities at the end of 2021 were 358 million yuan, an increase of 157 million yuan and a ring increase of 186 million yuan. Under the influence of the epidemic, the company’s cash from selling goods and providing labor services in 2021 was 2.176 billion yuan, an increase of 9.5% at the same time. The related amount in 2021 is 57.91 million yuan, and 125 million yuan is planned in 2022. Target for 2022: the company strives to achieve a revenue of 2.5 billion yuan, an increase of 40% at the same time.
The proportion of high-grade liquor has exceeded 60%, and the northwest outside the province + East China have the same strength
In terms of products, the company’s revenue of high-end products (more than 100 yuan) was 1.095 billion yuan, an increase of 26.24% at the same time, accounting for 62.11% (+ 11.25 PCT). According to the split of volume and price, the sales volume in 2021 is 13800 tons, and the corresponding ton price is 127800 yuan / ton (+ 14%). Among them, the sales volume of high-end products is 5300 tons, and the corresponding ton price is 206600 yuan / ton (+ 2.5%); The sales volume of mid-range products is 7800 tons, and the corresponding ton price is 83600 yuan / ton (+ 0.2%); The sales volume of low-grade products is 0600 tons, and the corresponding ton price is 26700 yuan / ton (+ 10.3%).
In terms of subregions, the revenue of Southeast Gansu in 2021 was 500 million yuan, a decrease of 13% at the same time; The revenue of Lanzhou and its surrounding areas was 470 million yuan, basically the same; The revenue of central Gansu was 237 million yuan, an increase of 13% at the same time; The revenue of western Gansu was 163 million yuan, basically the same; The revenue of other regions was 392 million yuan, an increase of 36% at the same time. In 2021, the proportion of revenue inside and outside the province was 78:22. In terms of distribution channels, the sales revenue of distribution channels in 2021 was 1.661 billion yuan, an increase of 1.2% at the same time; Online channel revenue was 102 million yuan, an increase of 60% at the same time. In addition, the company plans to invest 10 million yuan to establish an Internet sales company to sell the company’s products on tmall, jd.com and other third-party platforms.
Smooth expansion outside the province, four highlights in the future
In 2020q2, Fosun joined the company and injected new vitality into the development of the company. Fosun adhered to the five-year planning goal previously proposed by the company (i.e. revenue of 3 billion yuan and net profit of 600 million yuan in 2023). Chinese Baijiu Baijiu China strives to achieve the three major development strategies of China’s top 10 liquor makers, build a famous Chinese liquor brand and build a large scale liquor making base in China in 2031, and turn Jinhui Liquor Co.Ltd(603919) into a large industrial group, which is mainly based on Baijiu making.
At present, the company is constantly consolidating the market in the province and actively expanding the market outside the province in accordance with the strategic path of “layout the whole country, deeply plough the northwest and make key breakthroughs”. At present, the market layout of Shaanxi, Ningxia, Xinjiang, Qinghai and Inner Mongolia has set up offices in Beijing, Shanghai, Haikou and other cities. The East China market will be launched through partner recruitment in 2021. Qinghai and Inner Mongolia outside the province are cultivating and in the initial stage; Xinjiang has also been in operation for several years, and Shaanxi market is expected to enter the harvest period in the next 2-3 years.
Four highlights of the company in the future: first, it is expected that the market share in the province is expected to increase to more than 30%, which comes from weak areas in the province, such as the western region of Gansu Province, which continues to make up for weaknesses and harvest the share of other small brands in the province; Second, the proportion of products above 100 yuan continues to increase, and is expected to increase to more than 60% in the future; Third, the main strategy of expansion outside the province is “Echelon rolling development and asymmetric marketing”, and the northwest region is expected to accelerate expansion and increase market share; Fourth, the Company re launched the “longnanchun” brand and positioned the products above the secondary high-end. At present, the wine body has been prepared, and the product is expected to be in large quantities in the future.
Profit forecast
We are optimistic about the development of the company after Fosun takes over, and also optimistic about the continuous improvement of the proportion of the company above 100 yuan and the continuous improvement of the market share in the province. We expect EPS to be 0.97/1.22/1.50 yuan from 2022 to 2024, and the current share price corresponding to PE is 29 / 23 / 19 times respectively, maintaining the “recommended” investment rating.
Risk tips
Macroeconomic downside risks, the epidemic dragged down consumption, the growth of high-end wine was less than expected, and the expansion outside the province was less than expected.
