\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 702 Shede Spirits Co.Ltd(600702) )
Event: the company released the annual report of 2021. In 2021, the total operating revenue was 4.969 billion yuan (YoY + 83.8%), and the net profit attributable to the parent company was 1.246 billion yuan (YoY + 114.35%). At the same time, it is announced that it plans to distribute cash of RMB 8.00 (including tax) for every 10 shares, and the total amount of cash distribution is expected to be RMB 266 million.
Key investment points
The company ended successfully in 2021 and achieved rapid growth. The company’s liquor revenue in 2021 was 4.577 billion yuan, a year-on-year increase of + 94.77%. From the product side, 1) the medium and high-grade liquor dominated by shede series was 3.874 billion yuan, with a year-on-year increase of + 81.94%, the annual volume of medium and high-grade liquor was + 65% and the ton price was + 10% year-on-year. Among them, we expect that shede series accounted for about 77% of the medium and high-grade revenue, with a year-on-year increase of more than 70%. While shede series grew in large quantities, the wholesale price also increased gradually, from 290 yuan at the beginning of the year to 350 yuan at the end of the year. 2) The low-grade liquor dominated by Tuopai Daqu achieved a substantial increase, with an annual revenue of 703 million yuan, a year-on-year increase of + 218.66%, accounting for 15% of liquor, a year-on-year increase of + 98% in the volume of low-grade liquor and + 62% in the ton price. The revival of Tuopai has achieved initial results. During the reporting period, the number of dealers of the company increased rapidly, with a net increase of 491 dealers in 2021. After Fosun became the owner, the confidence of dealers rebounded significantly and the speed of nationwide investment promotion accelerated. By the end of 2021, the advance collection was 764 million yuan, a year-on-year increase of + 83.55%. The dealers made positive payments, which confirmed the sufficient channel confidence.
The internal salary incentive is improved, and the profitability continues to improve, which can be expected. The company’s annual gross profit margin was 77.81%, with a year-on-year increase of + 1.94 PCT, of which the gross profit margin of alcohol was 81.54%, with a year-on-year increase of -0.56 PCT, mainly due to the increase in the proportion of low-grade wine in the whole year; In terms of expenses, sales expenses / management expenses increased by 63.2% / 77.6% year-on-year, mainly due to the expansion of the company’s operation, the increase of sales personnel and management personnel and the rise of wages. Benefiting from the rapid growth of income, the company’s sales expense rate was 17.63%, year-on-year -2.23pct, and the management expense rate was 12.14%, with a year-on-year -0.42pct, which promoted the company’s net profit rate to 25.57% and year-on-year increase of 3.11pct. The improvement of internal salary and welfare helped to give full internal confidence, Unite as one to promote the continuous improvement of business.
The income of 2022q1 is in line with expectations, and the Spring Festival sales are good. The company recently announced Q1 performance express that the revenue of 2022q1 increased by 80% year-on-year, and the revenue was in line with expectations, mainly due to the good dynamic sales in the peak season of the Spring Festival and the high increase of revenue driven by the large sales of core products. China’s tiktok net profit increased by 52%-85% compared to the same period last year, slightly lower than the growth rate of revenue. We expect to increase the advertising of online (CCTV, jockey) and offline (high speed rail stations), and more investment in marketing activities.
Profit forecast and investment rating: old wine is empowered, driven by dual brands, and with sufficient internal and external confidence. We predict that the company’s total revenue from 2022 to 2024 will be 7, 9 and 10.7 billion yuan, with a year-on-year increase of 40%, 30% and 18%; The net profit attributable to the parent company is RMB 1.9 billion, 2.5 billion and 3 billion, with a year-on-year increase of 52%, 33% and 21%. The potential energy continues. The corresponding EPS from 2022 to 2024 is RMB 5.69/7.56/9.13. The current market value corresponds to PE of 32 / 24 / 20x, and peg is less than 1. It is covered for the first time and given a “buy” rating.
Risk tips: the recovery of the epidemic is less than expected, the strategy of old wine is less than expected, and the macro-economy is weak
