\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 702 Shede Spirits Co.Ltd(600702) )
Event: Shede Spirits Co.Ltd(600702) released the results of the first quarter of 2022. In Q1, the company achieved revenue of 1.884 billion yuan, a year-on-year increase of 83%, and net profit of 535 million yuan, a year-on-year increase of 73%, in line with market expectations.
Q1 made a good start, with high growth of brands in all gears. Thanks to the implementation of the “tuode brand” strategy, the company’s revenue of “tuode brand” was mainly 1.2 billion yuan, accounting for about 2.78% of the total revenue, accounting for 2.78% of the total revenue of tuode brand, accounting for 2.78% of the total revenue. The company’s channel playing method, cost investment, brand cultivation and personnel incentive have changed significantly compared with those in Tianyang period. The channel confidence has been restored, and 250 new dealers have been added in 1q22, which is a higher level in history, highlighting the dealers’ confidence in the willing brand.
The high price segment brand drives the increase of gross profit margin, and the marketing continues to be actively invested. 1q22 achieved a gross profit margin of 80.83%, with a year-on-year increase of 3.23pct. It is speculated that it is due to the increase in the proportion of high price band products dominated by taste and willing and the price increase of secondary high-end products in 2021. 1q22 company’s sales expense ratio was 18.5%, with a year-on-year increase of about 4pct. Although the net interest rate fell by 1.67pct to 28.39% year-on-year, at this stage, the high cost investment is particularly important for the accumulation of brand potential energy. In addition to the continuous development of customers and channels, the total platform exposure of shede wisdom lecture in the fifth quarter reached 5.678 billion times, ranking 24 on the hot search list of the whole platform, which is expected to continue to deepen the penetration of shede brands.
Q1 active sales, benign inventory and controllable impact of the epidemic. The inventory turnover rate of 1q22 company has reached the highest level in the first quarter since 2013, which may reflect the positive dynamic sales level of the channel. At the same time, the channel inventory is benign and controllable, and the inventory days may be about 1.5 months. On the one hand, it is willing to test the dealer’s inventory in six transit warehouses across the country, and the maximum inventory of the dealer can not be higher than 9 weeks. On the other hand, since Fosun took over, the company has a more friendly attitude towards the channel, but more pressing goods, Pay more attention to price stability and brand empowerment. Through channel research, we learned that the number of personnel in the core market is higher than that of competitive products, and there are clear visiting task requirements for tobacco Hotel Alliance and customer development. The channel is deeply cultivated and stable, and the long-term growth space is expected to be opened. In addition, the outbreak of the epidemic has had some impact on the consumption of banquet scenes since March. However, 1Q22 has nearly 400 million yuan in contractual liabilities. Some core markets such as Shandong and Henan have received more than expected money in the first quarter. Besides, Q2 is also a Baijiu consumption season. The main work is mainly based on market cultivation and price maintenance.
Profit forecast, valuation and rating: the company’s nationalization process has been steadily promoted, the “shede + Tuopai” dual brand strategy has continued to make efforts, the “platform + alliance terminal” model has conquered cities and lands, and the concept of old wine has gradually taken root in the hearts of the people. We are optimistic about the continuous release of brand and channel potential energy after the restructuring of shede management, maintaining the net profit attributable to the parent company of RMB 1.866/24.83/3.205 billion in 202224, and the current share price corresponds to PE of 26 / 20 / 15 times, Maintain the “buy” rating.
Risk warning: epidemic will reduce consumption intention, competition of secondary high-end Baijiu is intensified, and channel cost is not timely.
