\u3000\u30 Shenzhen Fountain Corporation(000005) 68 Luzhou Laojiao Co.Ltd(000568) )
1, since the industry revival in 2016, the high-end liquor volume and price have risen, and the national cellar 1573 industry trend has been increasing. This has driven Luzhou Laojiao Co.Ltd(000568) into one of the fastest growing companies in Baijiu stock market in recent years. Since 2016, the industry has entered a new round of development cycle, but this round of recovery is not an overall improvement of the industry, but a structural opportunity for high-end and sub high-end prices. 20162020 is the first growth stage of the industry, which is mainly marked by the simultaneous rise of high-end wine volume and price. After the new management took office in 2014, the company actively adjusted, vigorously reformed the organizational structure, marketing mode and product strategy, carried out fine control, and focused its core resources on Guojiao 1573; After the adjustment, Guojiao went up along the development trend of the industry, regained its share and resumed its high-speed development. From 2016 to 2020, Guojiao 1573 maintained rapid growth (compound growth rate of revenue is about 39.6%), which became the main driving factor of the company's performance growth, and the company's profit elasticity accelerated release; In 2021, the company will continue to maintain high-speed growth, and the basic trend is still continuing.
2. After the base number of high-end liquor volume and price rises at the same time, it enters the platform period and the growth rate shifts gears, but 1573 still has sufficient growth potential in the 1000 yuan price belt. Since 2020, the growth and decline of high-end Baijiu has caused market concern. However, we believe that the core reason for the shift in the growth rate of high-end wine is that after the simultaneous increase of volume and price in the early stage, high-end wine has reached the platform period. In the future, the decline rate in the high base is normal, but the decline rate is not damaged on the demand side. The sales revenue of Guojiao will continue to increase high in 2021. 1) The competition pattern of thousand yuan price belt is clear, and the brand strength of Guojiao 1573 is outstanding; 2) Compared with Maotai and Wuliangye Yibin Co.Ltd(000858) , Guojiao 1573 has a lower base, strong marketing ability and greater flexibility; 3) There is still room for channel expansion of Guojiao in East and South China markets, and we are still optimistic about the growth of Guojiao 1573.
3. The low-grade national cellar fully benefits from the secondary high-end dividends. The company has a positive layout and can expect elastic growth. At present, the industry trend has transformed from the first growth stage to the second growth stage. The Lihe Technology (Hunan) Co.Ltd(300800) yuan sub high-end price has benefited from the upgrading of consumption and entered a trend of high growth. The sustainability of this round of sub high-end development is stronger. From 2017 to 2021, the market capacity of the sub high-end has been expanded from more than 30 billion yuan to more than 100 billion yuan, and the future expansion to more than 200 billion yuan is relatively determined, which contains greater flexibility opportunities. With the acceleration of the secondary high-end capacity expansion trend, there is also price differentiation inside. The prices of Shenzhen Jt Automation Equipment Co.Ltd(300400) yuan and 600 yuan have become the price belt of the main layout of wine enterprises, and 600 yuan has also become the focus of the next round of competition. Due to excellent quality and strong brand potential, in recent years, low-grade national cellars have rapidly increased in North China, which prefers to consume low-grade products. It is expected that the annual revenue will be close to 6 billion yuan in 2021, significantly leading the sub high-end price segment of 600 yuan. At the same time, the company also launched Luzhou Laojiao Co.Ltd(000568) 1952 in 2021, which complemented the low-grade national cellar and continued to increase the high-end market. It is expected that in the future, the low-grade national cellar will continue to benefit from the industry trend of secondary high-end capacity expansion, upward fission of price belt and low-grade drinking, so as to achieve elastic growth.
4. The company's marketing model continues to innovate. After the implementation of incentives, it is optimistic that the expense rate will decline steadily, the net interest rate will increase, and the cashing performance will be improved. After the industry entered a period of in-depth adjustment, the company's marketing model also changed, with channel sinking and direct control terminal as the core, and constantly upgraded and innovated. In 2014, the company successively launched brand franchise companies of various series of products, and took this as the carrier to integrate and build capital and decision-making platforms, integrate provincial and prefecture level dealers, realize the unification of price system, solve the price inversion, and help the company grow. Among high-end liquor enterprises, the company adopts the brand franchise company model with low sales expense rate, and the sales expense rate of the company will remain about 10% for a long time before 2014; However, since the management took office in 2014, the company has made a lot of investment in channels and brands, and the expense rate has shown a significant upward trend. After continuous investment in recent years, some mature markets of the company have stepped into the stage of excessive cost investment, and the company has also emphasized the cost performance price ratio since the end of 2019; Since 2020, the sales expense rate has decreased for the first time since 2014. In September 2021, the company issued the restricted stock incentive plan (Draft), which was approved by Luzhou SASAC in December. The incentive plan established a long-term incentive mechanism, and the enthusiasm of the company's senior executives and core backbone team was significantly improved; With the implementation of the equity incentive scheme, it is optimistic that the expense rate of the company will decline steadily, so as to continue to deliver performance and maintain elastic growth.
5. Profit forecast and rating: the company has outstanding core competitiveness in the channel and brand side, management and employment can be promoted and demoted, the salary system is highly market-oriented, and the marketing team has strong combat effectiveness. After the equity incentive is implemented, it is expected that the potential energy of the company's brand and channel will be released rapidly and the performance will be realized stably in the future. We continue to be optimistic about the long-term growth of the company. It is estimated that the EPS from 2021 to 2023 will be 5.36/6.68/8.23 yuan, corresponding to pe35 / 28 / 23 times. The current valuation is cost-effective, so we give a "buy" rating.
6. Risk tips: 1) the recovery of catering channels affected by the epidemic is lower than expected; 2) Macroeconomic fluctuations have hindered the pace of consumption upgrading; 3) Industry policy changes lead to increased competition; 4) The price of raw materials has risen sharply; 5) Food safety incidents, etc.
