\u3000\u3000 Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) (603369)
Event: the company issued the announcement of performance increase in 2021. It is estimated that the operating revenue in 2021 will be 6.3-6.5 billion yuan, with a year-on-year increase of 23% – 27%; The net profit attributable to the parent company is expected to be RMB 1.9 billion-2.1 billion, with a year-on-year increase of 21% – 34%; It is estimated that the net profit deducted from non parent company is RMB 1.9 billion-2.1 billion, with a year-on-year increase of 22% – 35%.
The product structure was further optimized, and the proportion of “special a +” revenue continued to increase. According to the median forecast, the company achieved a revenue of about 1.064 billion yuan in the single quarter of 21q4, a year-on-year increase of + 14.78%; The net profit attributable to the parent company was 302 million yuan, a year-on-year increase of + 19.78%. In 2021, the company seized the opportunity of upgrading the structure of the secondary high-end price belt, focused on key products, and further optimized the product structure. The revenue growth of “special a + products” is expected to exceed 35%, and the proportion in the company’s revenue will further increase to about 65%. Specifically, Guoyuan V series has made remarkable achievements in tackling key problems, realizing rapid and large-scale production, which not only improves the company’s brand image, but also brings greater profit elasticity; Guoyuan’s new Sikai has passed smoothly. Since the introduction of the new Sikai in May 2021, the channel has been well controlled and the price has been stable. According to the channel research, the first batch price of the new Sikai is about 430 yuan, the terminal price is 450-460 yuan, and the channel profit has improved.
The restructuring of the brand business department is of great significance, and the V99 alliance improves the joint force of manufacturers. At the annual development conference, the company said that it would orderly establish V9, Guoyuan, Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) three major brand divisions and Gaogou sales company. This measure is of great significance. Previously, the management functions of the company’s sales department were fragmented or even balanced with each other due to different products and regions, resulting in the company’s weak overall promotion and marketing ability, good “sales” rather than “marketing”. If the corresponding management functions are uniformly divided according to products, it may be conducive to the company’s systematic promotion of marketing initiatives. In addition, the company has newly promoted the V99 alliance system, selected 99 V-series dealers inside and outside the province, provided one-to-one market guidance, professional skill training and other empowerment, and achieved win-win cooperation through value creation and right sharing. The establishment of V99 alliance may help V-series become another growth pole.
Actively expand the market outside the province, and the replication of model market is expected to accelerate the expansion. Relying on its own brand, quality and experience of mature tasting mode in the province, the company has increased human and material resources, and achieved remarkable results in market expansion outside the province. For example, some county-level cities in Shandong and Anhui are expanding smoothly, and the sample market is relatively successful. In 2022, it is expected to achieve rapid growth in markets outside the province through model replication.
Investment suggestion: V series continues high growth, four opening and upgrading smoothly, and the current price is stable and the inventory is benign. The medium and long-term K-series steady growth ensures the profit elasticity brought by the basic plate and V-series high growth, opens the growth space for expansion outside the province, and clearly divides the powers through the brand business division system, so as to improve the promotion and marketing ability. In addition, the company’s equity incentive has been promoted in an orderly manner, and the “14th five year plan” goal is expected to be completed with high quality. It is estimated that the company’s earnings per share in 2021, 2022 and 2023 will be 1.61, 2.05 and 2.52 yuan respectively, maintain the Buy-A investment rating, and give a 12-month target price of 72 yuan, which is equivalent to the dynamic P / E ratio of 35x in 2022.
Risk tips: macroeconomic and policy risks, food safety problems, and less than expected risks in development outside the province
