\u3000\u3000 Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) (603369)
Events
On the evening of January 10, 2022, the company released the performance express for 2021: it is expected that the revenue in 2021 will be 6.3-6.5 billion yuan, an increase of 23% – 27% at the same time; The net profit attributable to the parent company was 1.9-2.1 billion yuan, an increase of 21% – 34% at the same time; Deduct non net profit of RMB 1.9-2.1 billion, an increase of 22% – 35% at the same time.
Key investment points
It is expected to grow steadily in the fourth quarter, and the proportion of special a + category will continue to increase. According to the performance express, the median revenue in 2021 will be 6.4 billion yuan, an increase of 25% at the same time; The median net profit attributable to the parent company was 2 billion yuan, an increase of 27.6%. According to the median value, we expect the median revenue of 2021q4 company to be 1.065 billion yuan, an increase of 15% at the same time; The net profit attributable to the parent company was 301 million yuan, an increase of 19% at the same time.
According to the performance express, the company’s revenue share of products above special a + category has further increased, from 60% in the same period in 2020 to 65% in 2021. The product structure has been continuously optimized and the proportion of Guoyuan series has been continuously increased.
Enter 2022 with high quality and implement the “13445” policy
At present, the company is closely focused on the theme of “developing high-quality products and new wine margins”, firmly grasp the keynote of “good luck and quick pursuit”, follows the “543” development trend of liquor industry, attaches importance to strategic guidance, and resolves quality first, focusing on Baijiu‘s main business. In 2022, the company’s marketing will implement the “13445” policy: “1” refers to focusing on high quality and focusing on new leaps. “3” refers to the three modernizations strategy, highlighting differentiation, building core competitiveness, striving for high-end, seizing new competitive tracks, speeding up the full flower, and making a breakthrough outside the province. “4” refers to industry confidence, brand confidence, quality confidence and development confidence. “4” refers to deepening the four campaigns: 1) unswervingly, strive to improve the potential energy of V9 brand, promote supremacy, sell business, and have V9 first and then V series; 2) Improve quality and expand coverage, continue to strengthen the basic market of opening system, enlarge the popularity of brand reputation, improve the control and profit sharing system, and continue to promote regional intensive cultivation; 3) Highlight characteristics and strengthen Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) brand activation effect; 4) Take multiple measures at the same time, accelerate the market breakthrough of plates outside the province, coordinate the layout of dual brands, build diversified plates, and cultivate innovative new consumption. “5” refers to strengthening the five guarantees, upgrading the marketing organization (strengthening V9 business unit, establishing Guoyuan, Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) business unit and Gaogou sales company), increasing market investment, deepening process reform, implementing the business excellence plan and improving the incentive mechanism.
Equity incentive is expected to accelerate the implementation, and the company’s three highlights in the future
At the end of October, the company plans to use its own funds of no more than 518 million yuan to repurchase 6.6-7.7 million shares, accounting for about 0.53% – 0.61% of the total share capital before repurchase; The company completed the repurchase on November 26, with a cumulative repurchase of about 7.7 million shares, accounting for 0.6138% of the total share capital of the company. The average repurchase price is 56.24 yuan / share, and the total amount paid is about 433 million yuan. We believe that the equity incentive scheme is expected to accelerate its implementation.
Three highlights of the company in the future: first, the 10 billion target of V Series in the next decade, and the price band of 600-700 yuan for V3 and competitive M6 + advance card; Second, the 14th five year plan for Southern Jiangsu is expected to be nearly 4 billion, with large growth space in the future; Third, the proportion outside the province in the 14th five year plan accounts for more than 20%, and the expansion outside the province is a must for the company to open the ceiling.
Profit forecast
At present, the company is deeply promoting differentiation, high-end and nationalization, and fully implementing the national edge V-series battle, K-series promotion war, Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) brand activation war and breakthrough war outside the province. Taking the Yangtze River Delta as the center, accelerate the formation of strategic plates; Cultivate key markets with key regions of Beijing, Tianjin, Hebei, Guangdong, Jiangxi, Hunan and Hubei as the core; The market development of prefectures and cities adopts the interactive layout development strategy of cities, counties and districts, and the market development of counties and districts adheres to the “focus law”. Breakthroughs outside the province follow the regional expansion strategy of “comprehensive planning, key breakthroughs, surrounding radiation and echelon development”. We continue to be optimistic about the continuous improvement of the proportion of Guoyuan series, driving the continuous optimization of product structure. V series is expected to become the company’s new power engine and follow Su liquor to build surrounding plates for a long time. According to the company’s performance express, we slightly adjusted the EPS from 2021 to 2023 to 1.60/2.00/2.57 yuan (the previous values were 1.57/2.02/2.59 yuan respectively), and the corresponding PE of the current stock price was 32 / 26 / 20 times respectively, maintaining the “recommended” investment rating.
Risk tips
Macroeconomic downside risk, epidemic drag on consumption, less than expected growth in the fourth open, less than expected growth in the V series, less than expected expansion outside the province, etc.
