\u3000\u3 Shengda Resources Co.Ltd(000603) 198 Anhui Yingjia Distillery Co.Ltd(603198) )
Core view
The long history of the wine leader has successfully transformed into a medium and high grade baijiu. As one of the representatives of Hui liquor, the company's brand " Anhui Yingjia Distillery Co.Ltd(603198) " originated in 106 BC and is the leader of ecological brewing. In 2015, the company launched the eco hole series series of high-end high-end Baijiu and Baijiu liquor, and has become the main source of company revenue. In 2021, the sales of Q3 medium and high grade liquor accounted for 71.47%. With the company's high margin sales of high-end Baijiu increased, the company's profitability improved significantly, and the gross profit margin of Q3 in 2021 was 68.47%.
Anhui and its surrounding liquor market have great potential, which will provide rich soil for the development of Baijiu liquor. Anhui, and Jiangsu, Henan and Shandong provinces in the vicinity, have large Baijiu consumption groups, all of which are large Baijiu producing and selling provinces. In the trend of consumption upgrading, high-end and sub Baijiu liquor is expected to usher in the opportunity period. 1) Jiangsu's economy is developing, Baijiu mainstream price is high, the market scale is expected to reach 80 billion yuan in 2023, and the growth rate is faster. 2) the mainstream price belt of Baijiu in Anhui is at a high level, and the market size is expected to exceed 30 billion yuan in 2022. The liquor companies in the province are highly competitive and the Baijiu pattern in the province still has room for optimization and upgrading. 3) The competitiveness of liquor enterprises in Shandong and Henan provinces is not strong, leaving a large market space for foreign liquor enterprises. It is expected that the market scale will reach 74.3 billion yuan and 50 billion yuan respectively in 2023; Moreover, the proportion and scale of the second and the high-end Baijiu are expected to increase rapidly.
Brands, products and channels work together, and the company is expected to enter the fast lane of large-scale performance. The product's current product system covers the price range from 40 yuan to 2188 yuan, but the core focus is clear. Since the series of holes was launched, the high-end Baijiu market has been continuously promoted. On the brand side, the company advocates and leads ecological brewing relying on six ecological systems; In the list of BrandFinance issued by the British brand assessment agency, the company ranks fifth in Baijiu brand. The company pushed through the old and brought forth the new in brand publicity, solidly promoted the system project of "three actions" and strengthened the interaction with consumers. On the channel side, the company focuses on distribution, and different series of products are in the charge of different subsidiaries; The company is deeply engaged in the market in Anhui Province and adheres to the "small business system" strategy, which helps the company improve channel control and break through flexibly in the case of fierce competition; In the market outside Anhui Province, the company concentrated resources and focused on the development of core cities. Since 2015, the number of dealers outside the province has increased rapidly, the effect of channel development is remarkable, and the revenue outside the province has entered a new stage, accounting for nearly 40%.
Investment advice
Considering that the company's ecological cave collection series is highly recognized by the market, and the promotion of product structure upgrading strategy is relatively smooth. It is estimated that the company's EPS will be 1.69/2.28/2.84 yuan in 21 / 22 / 23, and the corresponding PE will be 41.12/23.16/18.57x respectively. It will be covered for the first time and given the rating of "strongly recommended".
Risk tips
The economy fluctuates more than expected; Food Safety; The progress of reform was less than expected.
