\u3000\u3 Shengda Resources Co.Ltd(000603) 198 Anhui Yingjia Distillery Co.Ltd(603198) )
The company announced the performance express of 2021: it is expected to achieve an operating revenue of 4.577 billion yuan in 2021, a year-on-year increase of 32.58%, a net profit attributable to the parent of 1.38 billion yuan, a year-on-year increase of 44.74%, and a net profit attributable to the parent of 1.290 billion yuan after deduction, a year-on-year increase of 45.58%. According to the calculation, in the fourth quarter of 2021, the company is expected to achieve an operating revenue of 1.397 billion yuan, a year-on-year increase of 14.40%, and a net profit attributable to the parent company of 418 million yuan, a year-on-year decrease of about 1%.
Structural upgrading + regional expansion, and the compound growth potential of “volume and price” is strong. The company focuses on the “223” marketing strategy, focusing on the ecological hole series in product management. In the first three quarters of 2021, the sales revenue of the medium and high grade Baijiu represented by Dong Tibet series increased by 43.97% over the same period last year. We expect that the hole series series will achieve a nearly 50% increase in the whole year, and the product structure of the company will continue to improve, pushing the net interest rate of the whole year in 2021 to 2.42pct to 30.15%. In terms of channels, the company matched the operation plans of tobacco and alcohol stores, banquets, hotels, group purchases and other channels, and actively expanded the markets inside and outside Anhui Province. The growth rates inside and outside Anhui Province in the first three quarters reached 44.53% and 41.54% respectively. We expect that the markets outside Anhui Province will still maintain synchronous growth throughout the year. The compound growth potential of “volume and price” of the company is strong, and the annual performance is in line with our previous prediction.
In 2022, the Baijiu market in Anhui was hot, and the company had a good start. In the fourth quarter of 2021, the investment in consumer expenses was increased, and the net profit attributable to the parent decreased slightly. During the Spring Festival of 2022, Anhui market was hardly affected by the epidemic, and the epidemic prevention and control was more accurate. With the opening of canteens, the number of people returning home increased year-on-year, and there was strong consumer demand for banquets, family and friends’ dinners and so on. The company’s Dong 6 occupies a price of 100 yuan, which has an obvious trend in the provincial capital Hefei market, or will lead the consumption of the whole province. The “good start” in the first quarter of 2022 can be expected.
During the consumption upgrading, the layout inside and outside Anhui Province was accelerated. Benefiting from the acceleration of economic growth in Anhui Province, the company’s products are upgraded from 100 yuan price hole 6 to 200 yuan price hole 9. In the future, the sub high-end price hole 16 / 20 is expected to continue in large quantities. In Anhui Province, the company has formed advantageous markets such as Lu’an and Hefei, which will be deeply provincial through channel construction. With the overflow of Anhui population and the development foundation of the company for many years, there is still a large development space around Anhui market.
Investment suggestion: according to the company’s performance forecast, we adjusted the company’s profit forecast. It is estimated that the company’s operating revenue from 2021 to 2023 will be 4.577 billion yuan, 5.538 billion yuan and 6.584 billion yuan respectively, the net profit attributable to the parent company will be 1.380 billion yuan, 1.788 billion yuan and 2.151 billion yuan respectively, and the EPS will be 172, 2.23 and 2.69 yuan respectively. The current share price corresponds to 34x, 27x and 22x times of PE respectively, maintaining the “recommended” rating
Risk warning: the epidemic situation repeatedly affects consumption; Competition intensifies in Anhui Province; Food safety accidents.
