\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 519 Kweichow Moutai Co.Ltd(600519) )
Event: the recent fluctuation in the wholesale price of Maotai liquor has aroused market attention. At the same time, Maotai e-commerce platform announced that it would be put into trial operation at the end of March. Our updated views are as follows:
The short-term supply-demand relationship led to the downward rating. Since March 2022, the wholesale price of Maotai liquor has dropped significantly. Near the end of March, the wholesale price of bulk bottles of Feitian liquor fell to about 2500 yuan / bottle, and the original box of Feitian liquor fell to 27 Xinjiang Tianshun Supply Chain Co.Ltd(002800) yuan / bottle, down about 10% / 14% respectively compared with the wholesale price at the beginning of March, mainly due to the change of phased supply-demand relationship. On the one hand, with the end of the Spring Festival, Baijiu liquor has gradually entered the consumption off-season, and the epidemic situation in some areas has deteriorated. Especially in East China and Guangdong, the consumption of Moutai liquor is relatively large, resulting in a weak demand side in the near future. In addition, in March, compared with the same period in previous years, the pace of delivery of Maotai liquor and non-standard products was accelerated, and the supply was relatively sufficient, which greatly alleviated the tension between supply and demand in the past. In the case of the impact of the epidemic and the downward rating, the confidence of dealers has been affected to a certain extent. There has been a selling behavior in the past two weeks, amplifying the rating shock. In addition, the company’s promotion of marketing reform and trial operation of e-commerce platform have also had a certain impact on the circulation price of traditional channels.
The falling of the rated price and the narrowing of the price difference of the original box / bulk bottle are conducive to reflecting the real demand. According to the past price changes of Feitian, since Q4 of 2012, affected by eight regulations and restrictions on three public consumption, the government demand has been greatly impacted. By the end of March 2013, Feitian’s rated price has fallen by 40%. Affected by the epidemic at the beginning of 2020, the wholesale price fell by more than 15% by the end of April, and rebounded significantly after the end of April. From the end of August to the end of November 2021, Feitian’s price fell by about 15% again, mainly due to the expected impact of increased investment in e-commerce and other channels and the cancellation of unpacking policy, but more speculative funds were squeezed out. The price drop is similar to the two adjustment since 2020, mainly for short-term shocks. Besides the epidemic, the impact of emotional changes is more emotional. Therefore, there is no need to worry too much about the resilience and fundamentals of high-end baijiu. The price difference between bulk bottles and original boxes is reduced to about 200 yuan, which is conducive to balancing the financial and consumption attributes of Maotai liquor. The price of bulk bottles of about 2500 yuan is also close to the price level recognized by dealers and consumers. It is estimated that there is little possibility of subsequent sharp decline. When the epidemic situation improves and channel sentiment recovers, the wholesale price is expected to stabilize.
The trial operation of e-commerce platform releases the signal of channel reform. According to the official account of the company, the I Moutai will be officially launched on the end of March. Consumers can make an appointment to purchase the Moutai, Moutai 1935 and rare products Moutai. They are not selling the “Flying Star” Moutai wine for the time being. They will integrate into 12 third party e-commerce platforms and panic buying information. At present, the e-commerce platform is in the water testing stage, which has little impact on the existing sales system and performance, but it releases the signal of the company’s gradual promotion of marketing reform, and is more perfect than the previous cloud commerce platform in terms of digital operation and system construction. The quota and product types of subsequent e-commerce platforms may increase. It is suggested to continue to pay attention to the effectiveness of market-oriented reform.
Profit forecast, valuation and rating: maintain a net profit of 52 / 602 / 69.2 billion yuan in 202123, corresponding to EPS of 41.4 / 47.9 / 55.1 yuan, and the current share price corresponding to PE of 40 / 35 / 30 times, maintaining a “buy” rating.
Risk warning: demand for high-end Baijiu is weak, channel reform is not as expected, new product performance is less than expected.
