\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 702 Shede Spirits Co.Ltd(600702) )
The performance of 2021q4 continued to grow rapidly and the whole year ended successfully. In 2021, the company’s revenue was 4.97 billion yuan (+ 83.8%), the net profit attributable to the parent company was 1.25 billion yuan (+ 114.3%), the net profit not attributable to the parent company was 1.21 billion yuan (+ 120.9%), and the sales volume was 39000 kiloliters (+ 149.7%), which was mainly due to the gradual acceptance of the company’s old wine strategy by the market. Shede and Tuopai brands achieved both volume and price increases, driving the rapid growth of revenue and performance. In a single quarter, the company’s revenue in 2021q4 was 1.36 billion yuan (+ 44.9%), the net profit attributable to the parent company was 280 million yuan (+ 2.1%), and the net profit not attributable to the parent company was 250 million yuan (- 3.5%). The lower profit growth rate than the revenue growth rate was mainly related to the more recognition of sales expenses in the fourth quarter.
The product structure was further upgraded and the annual profit margin increased steadily. In 2021, the company’s medium and high-grade liquor revenue was 3.87 billion yuan (+ 81.9%), and the volume and price increased by 64.7% / 10.4% respectively; The revenue of low-grade liquor was 700 million yuan (+ 218.7%), and the volume and price increased by 218.5% / 0.1% respectively; The proportion of medium and high-grade liquor revenue fell to 84.6% (- 6.0pct), mainly due to the remarkable results of Tuopai’s recovery of the old market and old dealers. The annual sales of shede and Tuopai were 0.831000 kiloliters (+ 60.1% / + 192.0%) respectively. In terms of profit margin, the gross profit margin and net profit margin of the company in 2021 were 77.8% / 25.6% (+ 1.9pct / + 3.1pct) respectively; The gross profit margin and net profit margin in 2021q4 are 77.1% / 20.6% (+ 2.4pct / – 9.2pct) respectively. The increase of gross profit margin mainly benefits from the upgrading of product structure and the increase of ton price. The decline of net profit margin is mainly related to the increase of sales and management expense rate. The sales / management expense rate in 2021q4 is 19.7% / 16.7% (+ 2.7pct / + 4.9pct) respectively. We believe that the change of expense recognition rhythm between quarters does not change the long-term upward trend of net profit margin, With the gradual improvement of the company’s revenue scale and product structure and more accurate cost investment, it is expected that the sales expense rate will gradually fall in the future.
The nationwide investment promotion layout has been steadily promoted, and the medium and long-term growth can be expected. In 2021, 1036 / 545 new dealers were added / withdrawn, and – 24 / 515 net dealers were added inside / outside the province. The sales volume of a single dealer was about 2.03 million yuan (an increase of 33.5% month on month in 2021q3), and the quality of dealers continued to improve. In accordance with the strategy of “focusing on Sichuan, Hebei, Shandong and Henan, improving the northeast and northwest, and breaking through the East and South China”, the company accelerated the national layout. In 2021, the company’s revenue inside and outside the province was 1.18/2.99 billion yuan (+ 127.6% / + 80.8%), accounting for 25.8% / 65.4% (+ 3.7pct / – 5.0pct) respectively, and the market position of its base was further improved. At present, the company’s dynamic marketing atmosphere in the mature market is improving day by day, and the terminal atmosphere in the development market is gradually rising. The brand and channel have formed a certain potential energy. The external sub high-end upgrading and expansion bonus plus endogenous improvement is expected to boost the steady growth of the company’s performance.
Risk tips: macroeconomic fluctuations; The epidemic situation is repeated in a large area; The nationwide expansion was less than expected.
Investment suggestion: it is optimistic that the company will continue to enjoy the bonus of upgrading and capacity expansion of secondary high-end liquor and maintain the “buy” rating
Supported by the strategy of old wine, the company’s brand growth potential is full. Under the national expansion, it is optimistic that the elasticity of the company’s medium and long-term performance will continue to release. It will fine tune 20222023 and add a profit forecast for 2024. It is expected that the EPS in 20222024 will be 5.73/7.84/10.26 yuan (the previous value of EPS in 20222023 will be 5.57/7.66 yuan), and the current share price corresponds to PE of 47 / 32 / 23x, maintaining the “buy” rating.
