\u3000\u3 Shengda Resources Co.Ltd(000603) 369 Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) )
Event:
According to the annual report issued by the company, the total operating revenue in 2021 was 6.408 billion yuan, with a year-on-year increase of 25.13%; The operating revenue was 6.406 billion yuan, a year-on-year increase of 25.12%; The net profit attributable to the parent company was 2.029 billion yuan, a year-on-year increase of 29.50%; Deduct non net profit of RMB 2.033 billion, with a year-on-year increase of 30.50%; Eps1 62 yuan / share; It is proposed to pay 5.90 yuan (including tax) for every 10 shares.
1. In 2021, the company’s structure is continuously optimized to achieve high-quality development. In 2021, the company’s revenue / net profit attributable to the parent company were 6.4 billion yuan and 2 billion yuan respectively, and the performance was in line with expectations; The Baijiu business achieved a revenue of 6 billion 370 million yuan (+25.3%), and the sales volume / ton price increased by 0.8%/24.3% respectively. The increase in the price of the liquor was mainly due to the optimization of the product structure and the direct increase in prices of some of the products from the national border. In terms of products, the product structure continues to be optimized. In 2021, the revenue of the company’s special a + products increased by 35.7% year-on-year (the volume and price increased by 22% and 11% respectively, and the volume and price increased at the same time). It is expected that the growth of V series will double, the upgrading and introduction of core large single products will be smooth, and the growth will remain high by taking advantage of the general trend of secondary high-end; The revenue of special class a products increased by 14.1% year-on-year. The company’s ex factory guidance price is 300 yuan + the proportion of product revenue is the same as + 5.0pct to 65.4%; The proportion of ex factory guidance price of 100 yuan + product revenue is the same as + 2.4pct to 92.3%. From a subregional perspective, the potential market has achieved high growth. In 2021, the potential markets in central and southern Jiangsu were developed smoothly, the V-series was gradually introduced, and the revenue increased by 32.9% and 32.5% year-on-year respectively; Mature markets such as Huai’an and Nanjing maintained steady growth, with revenue increasing by 18.0% and 19.8% respectively.
2. The profitability has been steadily improved, and the channel collection is positive. Although the company’s investment contribution (net income from investment / net income from changes in fair value) decreased compared with the same period last year, the company’s profit growth in 2021 is still faster than that of revenue, mainly due to: 1) the gross profit margin is the same as + 3.5pct to 74.6%, which is expected to be caused by structural upgrading, price increase and reduction of discount; 2) Cost optimization: the sales expense rate is the same as -2.0pct to 15.1%, and the management expense rate is the same as -0.5pct. It is expected that this is due to the decrease in the release cost of Guoyuan brand. Overall, the net profit margin of the company is the same as + 1.1pct to 31.7%. In addition, the channel collection was positive in the fourth quarter, and the advance collection (contract liabilities + other current liabilities) increased by 1.1 billion yuan year-on-year and about 1.4 billion yuan month on month.
3. 2022q1 has a good development momentum, and we look forward to encouraging the implementation and release of energy. According to the announcement, the company expects to achieve a total operating revenue of about 3 billion yuan and a net profit attributable to the parent company of about 1 billion yuan in Q1 2022, with a year-on-year increase of about 25% and 24% respectively. The company’s dynamic sales are strong in the peak season of Spring Festival, and the goal of payment collection is successfully achieved; Due to the increase of shipment in peak season, the wholesale price of core single products is slightly loose, and the current market operation is mainly to eliminate inventory; The industry is in the off-season of sales, and the impact of the epidemic is expected to be small. The company has set the tone for future development of “seeking speed in the best way, taking the lead in the best word, and being able to be fast is fast”. The 14th five year plan goal is to be completed ahead of schedule, and various measures are expected to be accelerated in 2022; If equity incentive is implemented, its brand potential energy and profit elasticity will also be accelerated.
4. Profit forecast and investment rating: in the long run, for the problems of unfavorable expansion outside the province and intensified competition in the province that the market has been concerned about for a long time, we believe that in the future, even if the expansion outside the province is not considered, the strengthening of weak areas in the province and the sinking of channels can also support the high-speed growth of the company’s revenue. At the same time, the company’s product structure is accurate, and the sub high-end price band of the card position. Under the background of the continuous expansion of the sub high-end capacity in the Jiangsu market, it is optimistic that the company will continue to expand its revenue scale, and there is no need to worry too much about the competition in the province in the short term. It is expected that the good landing of equity incentive will also bring catalysis in the future. We continue to be optimistic about the future growth of the company. It is estimated that the company’s EPS from 2022 to 2024 will be 2.02/2.54/3.18 yuan respectively, and the corresponding PE will be 22 / 17 / 14 times respectively, giving a “buy” rating.
5. Risk tips: 1) repeated epidemics lead to the inhibition of consumption; 2) Increased market competition leads to increased costs; 3) the sharp fluctuation of the economy caused the price of Baijiu to slide; 4) The pace of product upgrading is less than expected; 5) Food safety risks. In case of any difference between the relevant data and information and the contents published by the company, the contents published by the company shall prevail.
