Kweichow Moutai Co.Ltd(600519) (600519)
event
Recently Kweichow Moutai Co.Ltd(600519) issued an announcement on production and operation, and the production capacity and operation have achieved stable growth. Kweichow Moutai Co.Ltd(600519) issued the announcement on the production and operation of 2021 on January 1, 2022: (1) from the perspective of production capacity, the company will produce about 56500 tons of Maotai base liquor and about 28200 tons of series base liquor in 2021; (2) In terms of operating revenue, it is expected to achieve a total operating revenue of about 109 billion yuan in 2021 (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; (3) In terms of net profit, the company expects to realize a net profit attributable to shareholders of listed companies of about 52 billion yuan in 2021, with a year-on-year increase of about 11.3%.
Core view
Revenue exceeded 100 billion for the first time, exceeding the annual growth target. According to the announcement of Kweichow Moutai Co.Ltd(600519) , the company’s annual revenue was about 109 billion yuan, with a year-on-year increase of about 11.23%, an increase of 0.95 PCT over the previous year, and successfully achieved the annual growth target of 10.5%. In terms of revenue composition, the product structure of Maotai was continuously optimized, and the sales revenue of Maotai liquor increased steadily, with an annual growth rate of 9.87%; The influence of the series of wines was rapidly enhanced, and the annual sales revenue growth was as high as 26.11%. In terms of time nodes, Maotai’s annual revenue accelerated in Q4. We believe that this reflects the results of the new leading group with Chairman Ding Xiongjun as the core in combing Maotai channels, combined with the “promoting the reform of marketing system and price system” proposed by the company at the first extraordinary general meeting in 2021, We believe that Maotai’s channel system and marketing system may continue to show high-quality improvement in 2022.
Driven by the growth of available supply and sales and the expectation of price increase, Maotai’s performance still has great growth potential. From the perspective of available supply and marketing volume, due to the process of Maotai liquor, there is a strong corresponding relationship between the available supply and marketing volume of Maotai liquor in 2022 and the base liquor output in 2018, while the base liquor output of Maotai liquor in 2018 was 49700 tons, a year-on-year increase of 16.12% over 2017 and a year-on-year increase of 7.22 PCT, which also indicates that the available supply and marketing volume of Maotai liquor will increase significantly in 2022. From the price point of view, the Chinese Baijiu industry is in the period of price increase. Luzhou Laojiao Co.Ltd(000568) has raised its prices for its products. The market also has bigger expectations for Wuliangye Yibin Co.Ltd(000858) and Moutai’s price increase. Moutai also recently released super high-end products Kweichow Moutai Co.Ltd(600519) wine (treasures), and raised Moutai’s new treasures and Moutai retail wine 15 retail guide price of two products. We believe that Maotai may raise the price of its products in 2022 for the sake of improving brand strength and performance. Under the dual stimulation of volume and price, Maotai’s revenue and net profit still have great growth potential.
Actively promote the reform of marketing system and accelerate the growth of Maotai’s long-term value. In 2021, Maotai carried out a series of reforms, including the cancellation of Feitian Maotai 6-bottle unpacking policy and vigorously promoting the reform of the marketing system such as “smart Maotai”. We believe that Maotai may continue to promote the reform of its marketing system and price system in 2022, and the long-term value of Maotai still has a great guarantee.
Investment advice
The operation has developed steadily, and the reform ensures long-term vitality. According to the announcement on production and operation in 2021 issued by Maotai, Maotai achieved relatively stable growth in 2021; Looking forward to 2022, the supply and marketing volume of Maotai is expected to accelerate in 2022. At the same time, under the expectation of price increase, Maotai’s revenue and net profit still have great growth potential; In the long run, with the new management team taking office, Maotai is currently undergoing continuous reform, its marketing system and price system are gradually more market-oriented, and the long-term value of Maotai is still guaranteed.
Risk statement
The macroeconomic downturn exceeded expectations; Food safety risks; Maotai’s reform was less than expected.
