\u3000\u3 Shengda Resources Co.Ltd(000603) 589 Anhui Kouzi Distillery Co.Ltd(603589) )
Anhui Kouzi Distillery Co.Ltd(603589) is one of the leading brands of Huijiu liquor, with a solid consumer base in the province. At present, it continues to move forward along the correct reform path, focusing on the secondary high-end products and optimizing the big business model. At present, it has obvious valuation advantages and is given a buy rating for the first time.
Key points supporting rating
Private mechanism, stable operation and incentive need to be improved Anhui Kouzi Distillery Co.Ltd(603589) is one of the leading liquor of Anhui, with a market share of about 15% in the province. The representative of Baijiu liquor has high brand reputation and consumer loyalty. The scale of sales has kept growing for more than ten years, and the consumption base in Henan Province is solid. The company operates steadily, with the proportion of senior executives holding more than 40%, and the core team is pragmatic and stable. From 2020 to 2021, the repurchased shares are intended to motivate the core team. If the incentive can be improved in the future, it is expected to re stimulate the vitality of the enterprise.
In 2019, the company stepped out of the comfort zone and started an all-round and systematic reform. (1) 20152019 Anhui Kouzi Distillery Co.Ltd(603589) did not fully grasp the opportunity of consumption upgrading, and the upgrading speed lagged behind the competitive products. Starting from 2019, the company will strengthen the promotion of the secondary high-end price belt, conduct separate assessment for 10 and 20 years, launch new products in early summer, mid autumn and Jianxiang 518, improve the secondary high-end price belt, and is expected to enjoy the dividend of the rapid development of the price belt. (2) the cost of investment is increasing, brand publicity is more precise and focused, and the unique flavor is highlighted, which can benefit from the improvement of consumers’ awareness of Baijiu style. (3) Since the company entered the comprehensive adjustment in 2019, it has made up for its previous disadvantages in terms of channels, which is mainly reflected in the reform of its own organizational structure and the reform of dealers, the transformation of channels from extensive mode to fine mode, and the optimization of big business mode.
Enjoy the rapid expansion of secondary high-end demand in Anhui, and the market outside the province needs to be developed. (1) At present, the Anhui Kouzi Distillery Co.Ltd(603589) sales area is mainly in the province, accounting for about 80%. With the rapid economic growth, Anhui Baijiu demand is rapidly upgrading, consumption environment similar to Jiangsu, which can accommodate 2 or 3 Baijiu in the province. The company has a solid foundation of consumption in the province, increases resource investment in sub high-end new products, optimizes the big business model and improves the team combat effectiveness. It is expected that the company can share the rapid expansion of the market in the province in the next two years. (2) The market outside the province accounts for a relatively low proportion. The market around Anhui has a consumer base. With the upgrading of the sales team, it is expected to become a new growth point in the long run.
After more than two years of adjustment, positive changes have taken place in products and channels, and the revenue has achieved rapid growth in 21 years, surpassing the level in 2019. As the effect of the reform appears one after another, it is expected to maintain a rapid growth rate in 22-23 years, bringing surprises to the market.
Valuation
The company has a solid consumer base in the province. At present, it continues to move forward along the correct reform path. Its products focus on the secondary high-end and optimize the big business model. At present, it has obvious valuation advantages. It is estimated that the EPS in 21-23 years will be 2.87, 3.37 and 4.05 yuan / share respectively, with a year-on-year increase of 35%, 17% and 20%. It will be given a buy rating for the first time.
Main risks of rating
Competition intensifies in the province, and the dynamic sales of new products are less than expected. Repeated epidemics and lack of consumption scenes
