\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 519 Kweichow Moutai Co.Ltd(600519) )
Event: the company released its annual report for 2021. In 2021, Maotai achieved a total operating revenue of 109464 billion yuan, a year-on-year increase of 11.71%; Among them, the alcohol revenue was 106059 billion yuan, a year-on-year increase of 11.85%; The net profit attributable to the parent company was 52.46 billion yuan, a year-on-year increase of 12.34%. Among them, 21q4 achieved a total operating revenue of 32.411 billion yuan, a year-on-year increase of 14.05%, and a net profit attributable to the parent company of 15.194 billion yuan, a year-on-year increase of 18.06%.
Key investment points
The revenue and profit increased steadily, and the growth of Maotai Q4 accelerated. In terms of output, in 2021, the company completed a total output of 84700 tons of Maotai liquor and series of liquor base liquor, with a year-on-year increase of 12.7%, including 56500 tons of Maotai liquor base liquor, with a year-on-year increase of 12.4%; In terms of sales volume, 1) from the perspective of products, the sales volume of Maotai liquor will reach 36300 tons in 2021, and the sales volume of series liquor will reach 30200 tons. Maotai liquor achieved a revenue of 93.46 billion yuan, a year-on-year increase of 10.2%; Among them, 21q4 achieved revenue of 28.47 billion yuan, a year-on-year increase of 15.3%; The revenue of series liquor reached 12.59 billion yuan, a year-on-year increase of 26.1%; Among them, 21q4 achieved an income of 3.06 billion yuan, a year-on-year increase of 2.1%. In the fourth quarter, under the background of Maotai liquor volume, the growth rate of series liquor slowed down. 2) From the perspective of sales channels, the revenue from wholesale channels was 82.03 billion yuan, accounting for about 77.3% of the liquor revenue, and the revenue from direct sales was 24.03 billion yuan, accounting for about 22.7%. The revenue from direct sales increased by 3.0pcts compared with 19.7% in the first three quarters. In the whole year, the number of distributors in China of the company was 2089. The increase was mainly Maotai series liquor dealers and the decrease was mainly Maotai liquor dealers. The purpose was to further optimize the marketing network layout and improve the overall strength of dealers. After the new management took office, it accelerated the market-oriented reform of the company, made the sales channels more smooth, and accelerated the performance of the company in the fourth quarter of 21. In terms of capacity reserve, the company’s base liquor output in 2018 was 49700 tons, with a year-on-year increase of 16.0%, providing guarantee for the sales of finished liquor in 2022.
The gross profit margin remained stable and the profitability continued to improve. In the whole year of 21, the net profit attributable to the parent company was 52.460 billion yuan, with a year-on-year increase of 12.34%. The gross profit margin and net profit margin were + 0.11 / + 0.27pcts to 91.79% / 47.92% respectively. The gross profit margin remained stable and the profitability continued to improve. The annual sales expense rate and management expense rate of the company were – 0.10 / + 0.79pcts to 2.50% / 7.72% respectively. The increase in management expenses was mainly due to the increase in employee compensation and maintenance expenses. The company’s annual contract liabilities were 12.7 billion yuan, an increase of 2.4 billion yuan compared with 21q3 (10.3 billion yuan), and the dealers’ enthusiasm for payment remained. It is expected that in the future, with the continuous optimization of cost investment, the continuous improvement of product structure and the reform of direct sales channels, the profitability of the company is expected to be further improved.
Product structure adjustment & channels promote reform and help accelerate the performance in 2022. After chairman Ding took office, the company released a positive communication signal with investors, and the adjustment of product structure and channels continued. In terms of products, the company launched the high-end new product “Maotai 1935” and ultra-high-end single product Maotai treasures in 21 years, and the strategic action of successively launching high-end large single products further shows the determination of the company to upgrade its product structure. In terms of channels, Maotai recently restarted the e-commerce platform and went online for trial operation at the end of this month. The products selected in the initial stage are mainly non-standard products (including tiger grass, treasures, Maotai 1935, etc.). As one of the important measures of the company’s current round of marketing system reform, e-commerce restart is conducive to the medium and long-term volume and price adjustment and ton price improvement of the company’s products. In the previous period, the company clearly emphasized “deep cultivation of self-supporting, social, general distribution and other channels”, It is expected to form a sales force through multi-dimensional channels. According to the feedback from the channel, at present, the rated price of sanfei is about 2600 yuan, its in vitro profit is still rich, the pace of reform of the company is firm, and the recovery of in vitro profit is still the long-term direction. Thus, it helps the steady improvement of the company’s profitability and the continuous expansion of brand influence.
Investment suggestion: we believe that the future value growth of the company mainly comes from three aspects: first, the continuous strengthening of brand strength and brand moat enhance the company’s anti risk ability. Second, the channel reform has brought about the improvement of ton price and channel control. Third, the increase of ton price brought by structural upgrading. We are optimistic about the long-term investment value of the company. Based on the 22q1 operating data previously released by the company, we slightly raised the company’s profit forecast. It is estimated that the company’s operating revenue from 2022 to 2024 will be 127134/146972/169204 billion yuan respectively, with a year-on-year increase of 16.1% / 15.6% / 15.1%. The net profit attributable to the parent company was 61.930/72.520/83.887 billion yuan, with a year-on-year increase of 18.1% / 17.1% / 15.7%. The corresponding EPS is 49.30/57.73/66.78 yuan respectively. Consider premium Baijiu and high growth rate to give valuation premium, give the company 23 years PE35X valuation, maintain the company “buy -A” rating.
Risk warning: food safety problems, industry competition intensified, market reform is not as expected, Baijiu consumption tax rate reform possibility.
