\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 702 Shede Spirits Co.Ltd(600702) )
Event: the company released the annual report, and realized revenue / net profit attributable to parent company / deduction of net profit not attributable to parent company of RMB 49.69/12.46/1.211 billion in 2021, with a year-on-year increase of + 83.80% / + 114.35% / + 120.89%; 21q4 achieved revenue / net profit attributable to the parent company / deduction of net profit not attributable to the parent company of RMB 1.362276/251 billion, a year-on-year increase of + 44.89% / + 2.12% / – 3.51%. At the end of the year, the contract liabilities increased by 21.94 billion yuan, down 2.09 billion yuan from the end of the year.
The dual brand strategy has made great efforts, and the revenue has continued to increase. Taking advantage of the rapid expansion of secondary high-end capacity, the company steadily promoted the “shede + Tuopai” dual brand strategy, and the liquor sales revenue increased significantly during the reporting period. Specifically, the sales volume of shede series was 8054 tons, a year-on-year increase of + 60%; The sales volume of Tuopai series was 31082 tons, a year-on-year increase of + 192%. The revenue of medium and high-grade liquor (shede, Tuopai Tianqu) / low-grade liquor (Tuopai Daqu, gaogaoguang bottle, etc.) increased by + 81.9% / + 218.7% year-on-year. Taste, wisdom and ultra-high-end all grew rapidly. The low-end OEM development products achieved rapid development under the low base.
The nationwide layout was accelerated and the channel control was refined. In terms of sub regions, the company’s revenue within / outside the province in 2021 was + 128% / + 81% year-on-year, mainly due to the continuous sinking of channels in the province and the increase of investment and distribution outside the province. During the reporting period, the company accelerated the nationwide layout. By 2021, the company had 2522 dealers, with a year-on-year increase of 491, including a net decrease of 24 in the province and a net increase of 515 outside the province. The company implemented the “3 + 6 + 4” marketing strategy of old wine, actively changed its marketing thinking, reduced the occupation of dealers’ funds, improved the profitability of dealers, and further consolidated the manufacturer’s relationship by establishing eight shared warehouses and reducing the requirements of dealers for single payment.
The product structure was upgraded and the profitability was significantly improved: the gross profit margin of the company was 77.81% in 2021, with a year-on-year increase of + 1.94p CT; Among them, the gross profit margin of medium and high-grade liquor was 87.30%, with a year-on-year increase of + 1.01p CT; The gross profit margin of low-grade liquor was 49.80%, a year-on-year increase of + 8.13p CT, mainly due to the price increase of some single products and the upgrading of product structure. The annual sales expense rate was 17.63%, with a year-on-year increase of -2.23p CT, which was judged to be due to the improvement of governance efficiency and fine channel management after Fosun took over; The net interest rate was 25.07%, with a year-on-year increase of + 3.58pct, and the profitability was significantly improved. The company’s contractual liabilities at the end of the period were 658 million yuan, down 194 million yuan month on month compared with the end of Q3, an increase of 290 million yuan compared with the end of the year 20. Despite the significant growth of performance, it still maintained a high level and had sufficient capacity.
Fosun has high aspirations and leads high-quality development. The company has sufficient reserves of high-quality base liquor, orderly promotion of old liquor strategy and dual brand strategy, and gradual deepening of consumer cultivation. At the national level, while deeply cultivating core markets such as Sichuan, Hebei, Shandong and Henan and northeast and northwest, we will increase the layout and break through high potential markets such as East China and South China. Considering that Fosun’s presence is expected to further release the driving force of the mechanism, we believe that the company is expected to achieve high-quality and rapid growth.
Investment suggestion: it is estimated that the company’s earnings per share in 20222023 will be 5.79 and 7.64 yuan, with a 40x valuation in 2022, a target price of 232 yuan and a Buy-A rating.
Risk warning: downward pressure on the economy; Possibility of recurrence of epidemic situation; The promotion of old wine strategy was less than expected.
