\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 809 Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) )
Event: the company announced that after preliminary accounting, the company expects to achieve a total operating revenue of about 10.5 billion in the first quarter of 2022, with a year-on-year increase of about 43%; The net profit attributable to the shareholders of the listed company is expected to be about 3.7 billion yuan, with a year-on-year increase of about 70%. Since 2022, the company has actively carried out work around “Four Focuses” and “four insistences”. In the first quarter, the company flexibly adjusted its marketing policies and took multiple measures. While doing a good job in epidemic prevention and control, the company actively and orderly carried out production and operation activities. Medium and high-end products such as Qinghua Fenjiu series achieved a substantial growth and successfully achieved a “good start”.
The rapid growth of blue and white series drives the high increase of profits. In 2021, the company’s dealer conference defined three indicators of Qinghua Fen Liquor in 2022: 1) sales index of Qinghua Fen Liquor, 2) terminal index of Qinghua 20, and 3) opinion leader group index of Qinghua Fen Liquor. By reducing costs, adjusting structure and quality, and superimposing the blue and white series quota system, the company has promoted the price upward. The price system of blue and white Fen Liquor has entered a positive cycle, and the channel enthusiasm is high. The blue and white series is positioned as products above the secondary high-end price, which is the core growth pole of the company’s performance in 2022. Among them, the blue and white 30 · Renaissance version occupies the price band of 1000 yuan, and gradually enters the circulation channel from group purchase, which helps to improve the blue and white brand image and improve the overall profit margin of the company. In the first quarter of 2022, the company’s net profit margin was about 35%, which was the highest level over the years, reflecting that the improvement of blue and white series structure had a significant pull on the company’s profits.
Nationalization continued to expand, and the proportion outside the province continued to increase. In 2021, Q3 achieved RMB 2.14 billion and RMB 2.98 billion respectively within and outside the province, with an increase of 41% / 53% respectively, accounting for 58.2% outside the province, and the nationwide expansion was steadily promoted. In 2021, the company deepened the “1357 + 10” market layout, strengthened market expansion in the south of the Yangtze River, and promoted steady breakthroughs in Jiangsu, Zhejiang, Shanghai, Anhui, Guangdong and other markets. According to the previous announcement of the company’s performance increase in 2021, the company has more than 1 million controllable terminal outlets in the national market, and the growth potential outside the province is still strong. It is expected that the company’s market in the south of the Yangtze River is still expected to maintain rapid growth in 2022.
Increase the capacity of raw wine to provide a basis for long-term growth. On March 17, 2021, the company announced that it planned to invest 9.102 billion yuan in the construction and implementation of the expansion project of Fenjiu 2030 technical transformation of original liquor production and storage (phase I). The project covers an area of 1932 Mu and the construction period is planned to be three years. After the completion of the project, the company is expected to increase the annual output of original wine by 51000 tons and the energy storage of original wine by 134400 tons. In recent years, the company’s product structure has been continuously optimized and adjusted, and the demand for high-quality production capacity has been increasing. After the completion of the project, it is expected to effectively improve the production and storage capacity of Fen Liquor. This expansion is not only the pursuit of scale, but also the overweight of quality, the support of brand and the upgrading of competitiveness. The improvement of the company’s production and storage capacity will also directly contribute to the development of higher quality of Fen Liquor.
Investment suggestion: the company achieved rapid growth in revenue and profit in the first quarter, and the medium and high-end products such as Qinghua Fenjiu series achieved significant growth, driving the continuous upgrading of the company’s product structure. Based on the company’s performance forecast, the company’s revenue in 2022 / 23 is expected to be 26.9/33 billion yuan, the net profit attributable to the parent company is expected to be 7.9/10.2 billion yuan, and the corresponding P / E of the current stock price is 36 / 28x respectively. Considering the growth and certainty of the company, the “recommended” rating is maintained.
Risk tips: 1) the dynamic sales and price of Qinghua and Bofen are lower than expected; 2) The recovery of cash from the epidemic was less than expected.
