\u3000\u3000 Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) (603369)
Event: on January 10, 2022 Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) , the company issued an announcement of performance pre increase. The company expects to achieve an operating revenue of 6.3-6.5 billion yuan in 2021, with a year-on-year increase of 23% – 27%; The net profit attributable to the listed company is expected to be 1.9-2.1 billion yuan, with a year-on-year increase of 21% – 34%; After deducting non recurring profits and losses, the net profit attributable to the listed company was 1.9-2.1 billion yuan, a year-on-year increase of 22% – 35%.
Key investment points
In 2021, both revenue and profit increased, and the structural upgrading was significant. According to the performance pre increase announcement, the company expects to achieve an operating revenue of 6.3-6.5 billion yuan in 2021, with a year-on-year increase of 23% – 27%; The net profit attributable to the listed company is expected to be 1.9-2.1 billion yuan, with a year-on-year increase of 21% – 34%. According to the median value of the forecast, 21q4 is expected to achieve an operating revenue of 1.065 billion yuan, a year-on-year increase of 15%; The net profit attributable to the listed company is expected to be 301 million yuan, a year-on-year increase of 19%. It is expected that 21q4 will continue to maintain a good development trend and achieve high growth in the first year of the 14th five year plan. Among them, the product structure continues to be optimized. The sales revenue growth of the company’s special a + products is expected to exceed 35% year-on-year, and the revenue accounts for about 65%, with a year-on-year increase of + 5.05pcts. In the first three quarters of 21 years, the proportion of V Series in the national margin reached 10.7%, and the growth rate of four opening and opposite opening reached 31.1%. According to the feedback of the company’s dealer conference at the end of December: in terms of channels, in the first three quarters of 21 years, the six regions of the company’s provincial market achieved the growth of the whole region and the whole county, Huai\’an and Xuzhou maintained the growth momentum of 20.0% / 51.5% respectively, Southern Jiangsu and eastern Jiangsu maintained the growth of more than 30%, and Nanjing put forward to complete the tasks of the whole year; The “2 + 5” key plate market outside the province achieved an increase of more than 35% in the first half of the year. In terms of dealers, there were 20 dealers with sales of more than 100 million in the province, 6 new ones, and more than 30 prefecture level markets with sales of more than 10 million outside the province, 18 new ones.
Product upgrading is expected to help achieve the 14th five year plan goal. In 2022, the company put forward the “13445” plan for marketing work: around the main line of “developing high quality and new wine margin”, we should grasp the keynote of “good luck and quick pursuit”, follow the “543” development trend of liquor industry, pay attention to strategic guidance, strengthen quality first, focus on Baijiu main industry, further promote the strategy of differentiation, high-end and nationalization of “three strategies”, and effectively push forward the V war of national borders. Guoyuankai is the “four campaigns” of promotion war, Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) brand activation war and breakthrough war outside the province. It is expected that the company’s market share will continue to expand in 22 years, and the product sales revenue will achieve steady growth. From the perspective of implementation path, after the successful replacement of the company’s core single product in the first half of the year, the brand potential energy has been continuously improved, and the superimposed key points have been introduced into the weak areas in the province. It is expected that the fourth open in the year of 22 will continue the high growth trend of 21 years; At the same time, V series is expected to take over and open the system to become the next growth point in the future, achieve the high target of 2 billion in the + fourth five year plan, the proportion of revenue is expected to reach 20%, and the CAGR in 20-25 years is about 50%. In the future, under the background of continuous promotion of equity incentive, the company will have sufficient endogenous power, clear marketing strategy, further boost the enthusiasm of the sales team, and the company has the potential and power to release performance. In the medium and long term, the logic of “upgrading product structure + increasing market share” in the province is expected to continue to be realized; The cultivation of key markets outside the province such as Shanghai, Zhejiang, Anhui, Henan and Shandong will be accelerated, and the proportion of income outside the province may steadily increase to more than 10%.
Investment suggestion: under the background of product upgrading, the company’s revenue and profit growth is expected to increase. We slightly raise the company’s profit forecast: the company’s operating revenue from 2021 to 2023 will be RMB 6.401/79.40/9.533 billion respectively, with a year-on-year increase of 25.0% / 24.1% / 20.3%. The net profit attributable to the parent company was RMB 1.977/2482/3036 billion, with a year-on-year increase of 26.2% / 25.5% / 22.3%. The corresponding EPS is 1.58/1.98/2.42 yuan respectively. Considering the company’s high growth under the background of upgrading in the province and expansion outside the province, the company was given a 22-year pe35x valuation and maintained the company’s “buy-b” rating.
Risk tip: under the repeated epidemic situation, the performance growth is less than expected, the product upgrading is less than expected, and the industry competition is intensified.
