\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 702 Shede Spirits Co.Ltd(600702) )
Events
On the evening of March 15, 2022, the company released the performance forecast for the first quarter of 2022: the revenue of 2022q1 was about 1.85 billion yuan, an increase of about 80% at the same time; The net profit attributable to the parent company was 460560 million yuan, an increase of 52% – 85% at the same time; Deduct the non net profit of RMB 445545 million, an increase of 48% – 82% at the same time.
Key investment points
The first quarter made a good start as scheduled, and the overall trend was good. According to the performance forecast, the net profit center attributable to the parent company in 2022q1 was 510 million yuan, an increase of 69% at the same time; Deducting non net profit of 495 million yuan, an increase of 65% at the same time, the overall trend was good, and the first quarter started well as scheduled.
The overall dynamic sales of this Spring Festival are good, and the performance of Sichuan is good. It is normal for some regions outside the province, such as Henan, to be affected by the epidemic. In terms of products, at present, the price of crystal willing / taste willing is stable, the feedback of crystal willing is better than expected, and the core is still taste willing. Smooth bottle liquor T68 and Tuopai liuliang have good dynamic sales, and the manufacturer directly controls the cost to ensure that the brand resources enter the market. In terms of channels, Sichuan integrates high-quality dealers through the establishment of an alliance. It is expected that there will continue to be positive changes in channels this year.
With the concerted efforts of two brands, the strategic effect of old wine has begun to show
In 2021, Tuopai ushered in restorative growth and high growth brought by customized development business. Willing to focus on combing the price system and channel expansion, the business division made concerted efforts with dual brands. It has been more than 2 years since the old wine strategy was put forward. At present, the effect is beginning to show. We expect the sales of the old wine business department to be about 400 million yuan this year. The old wine strategy continues to cultivate consumer groups. It is expected to usher in high growth in the next 3-5 years, and the annual sales of the old wine division is expected to exceed 2 billion yuan in the future.
In addition, the company recently issued a notice on increasing the ex factory price of taste shede (Collection) and wisdom shede (Collection), and the price increase will be implemented from January 1, 2022. This price increase is also a high-profile promotion of shede brand, improving the market awareness of the company’s old wine products, and contributing to the company’s performance in 2022.
Prove yourself in 2021 and make great strides forward in 2022. In 2021, the company has proved itself and solved two problems criticized by the market in the past: first, the goal is too high and there is pressure to complete. The revenue growth rate of 83% in 2021 proves this and is ready to make a good start in 2022; Second, the channel fees cannot be fully realized, and the problem will be properly solved in 2021.
We look at the company from three dimensions: short, medium and long term:
In the short term, the company has been on the right track, and the management and dealers are full of confidence; In January, dealers actively paid and prepared goods. The Spring Festival of 2022 has a good start; In the medium term, the company has proved its ability to achieve the set goals. Next year, the company will continue to strengthen brand publicity, hold high and fight high, increase regional expansion, sink advantageous regional channels, and the quality of investment attraction is expected to be optimized;
In the long run, the differentiated competition brought by the company’s old wine strategy has attracted great attention from the market, the cultivation of channel consumers has been carried out, and it will take time to form a deep understanding; In addition, after Fosun takes over, it will basically solve the problems left over by Shede Spirits Co.Ltd(600702) history, and promote the company to establish an incentive mechanism. With “1 Tour” (integrating into Fosun tour) + “1 Platform” (docking platform between shede dealers and Fosun system) + “n product” (exclusive version of Fosun ecological characteristic products, services and rights and interests) as the core system, it will build a deeply empowered ecosystem for dealers; Finally, Fosun will develop and land Fosun system to jointly create products and broaden the sales channels of ecological BD.
The whole company has made steady progress according to the established rhythm, and the probability of a good start in the first quarter of 2022 is high. We reiterate that we are optimistic about the company’s logic: 1) on the product side, the company focuses on the old wine strategy, adheres to the dual brand strategy of shede and Tuopai, and focuses on building strategic single products such as taste shede and wisdom shede. 2) On the channel side, restore old customers in the old market, develop new customers in new markets, and focus on building key markets and customers. 3) In terms of circle marketing, the company focuses on famous wine, enters famous enterprises and smart clubs, accurately targets the circle, penetrates the head + waist + legs, and focuses on the core target customers. 4) Fosun has been in charge of the company for nearly a year. It is expected to accelerate the subsequent empowerment and promote the company to enter a new stage.
Profit forecast
Under the expansion of secondary high-end capacity, the company enjoys dividends. We are optimistic about the differentiated competitive advantage brought by the company’s old wine strategy and the acceleration of energy after Fosun takes over. We expect EPS to be 3.71/5.61/7.55 yuan from 2021 to 2023, and the current share price corresponding to PE is 47 / 31 / 23 times respectively, maintaining the “recommended” investment rating.
Risk tips
Macroeconomic downside risks, the epidemic dragged down consumption, the growth rate was less than expected, the promotion of old wine strategy was blocked, the expansion outside the province was less than expected, and the synergy between Fosun and the company was less than expected.
