\u3000\u3 Shengda Resources Co.Ltd(000603) 589 Anhui Kouzi Distillery Co.Ltd(603589) )
Event:
Anhui Kouzi Distillery Co.Ltd(603589) released the announcement of 2021 performance express, and the company achieved a total operating revenue of 5.029 billion yuan in the whole year, with a year-on-year increase of 25.37%; The net profit attributable to the parent company was 1.727 billion yuan, a year-on-year increase of 35.37%; Net profit deducted from non parent company was 1.484 billion yuan, with a year-on-year increase of 19.45%; EPS 2.88 yuan / share.
Key investment points:
Q4 insisted on controlling goods and supporting prices, and the revenue decreased month on month. The total annual revenue / profit of the company successfully achieved the target set at the beginning of the year; Q4 achieved revenue of 1.4 billion yuan in 2021 (the same as + 5.7%); The net profit attributable to the parent company is 577 million yuan (the same as + 39.9%). The revenue of the company decreased month on month in the fourth quarter, which is expected to be controlled by the end of the year to match the price rise of products, resulting in a certain impact on the revenue end; However, the company’s price support effect is remarkable. During the Spring Festival, the terminal transaction price of products with cellar and above for 10 years increased by about 20 yuan on average. At the same time, the company’s net profit attributable to the parent company increased significantly during the period, which is expected to be mainly due to the relocation of the fourth branch plant and the government land compensation obtained by the company included in non recurring income.
Increase in promotion expenses + increase in income tax rate, and Q4 deduction of non parent net profit is under pressure. In 2021q4, the company deducted 378 million yuan (the same as – 5.5%), and deducted 27.0% (a year-on-year decrease of 3.2pct). The deduction of non net profit in a single quarter is under pressure. On the one hand, after completing the annual total profit target, the company is expected to increase the investment in bottle opening and code scanning promotion expenses and strengthen the cultivation of end consumers; It is estimated that some expenses of Spring Festival in 2022 will also be pre confirmed. On the other hand, it is expected that the overall tax accounting and payment at the end of the year will increase the income tax rate in the fourth quarter to about 31% year-on-year (the income tax rate in the first three quarters of 2021 is only 25% and that in Q4 of 2020 is only 24%), which also drag down the performance of deducting non net profits.
Marketing reform has been steadily promoted, and 2022q1 continues to remain flexible. In the long run, the fundamentals of the company are stable, and significant changes have taken place in the management level in recent years. After the breakthrough of production capacity bottleneck, the company firmly promoted the marketing reform. After a series of operations such as big business sinking, product cutting, force group purchase and cost recovery, the manufacturer’s dominance increased and the manufacturer’s objectives tended to be the same; At the same time, the company actively promotes the assessment of dealers and internal teams, and Hefei marketing center will be put into operation soon. In the future, the company will continue to focus its resources on the products with more than 10 years’ cellar in kouzi, increase marketing investment, and upgrade strongly through the strategic large single product and fragrance 518, so as to optimize the product structure. In the short term, Q3’s performance will usher in an upward turning point in 2021; During the Spring Festival, the company’s terminal dynamic sales are strong, the product price is stable, the fundamentals continue to recover, and the superimposed low base is expected to achieve a “good start” in 2022, and the performance is still flexible.
Profit forecast and investment rating: we are still optimistic about the long-term growth of the company under brand concentration and price upgrading; In the future, the reform dividend will continue to be released, and the long-term upward trend is clear. In addition, the repurchase of the company has been successfully completed, and the implementation of incentives in the future will also bring positive catalysis. It is estimated that the EPS from 2021 to 2023 will be 2.88/3.41/4.13 yuan, corresponding to 20 / 17 / 14 times of PE. The current valuation has cost performance and is rated as “buy”.
Risk tips: 1) the epidemic situation repeatedly suppresses the demand of the industry; 2) Macroeconomic fluctuations hinder the process of consumption upgrading; 3) Intensified market competition in the province; 4) The increase of expense investment will affect the profitability; 5) The expansion outside the province was less than expected.
