\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 702 Shede Spirits Co.Ltd(600702) )
Matters:
On April 21, the company released the first quarterly report of 2022. Q1 achieved a revenue of 1.884 billion yuan, a year-on-year increase of + 83.3%; The net profit attributable to the parent company was 531 million yuan, a year-on-year increase of + 75.8%; The net profit deducted from non parent company was 517 million yuan, a year-on-year increase of + 72.5%.
Ping An View:
Q1 company operated steadily and made a successful start. 22q1 company’s operating revenue + 83.3% year-on-year; The net profit attributable to the parent company was + 75.8% year-on-year, continued the trend of high growth and made a successful start. Among them, the operating revenue of alcohol products was 1.783 billion yuan, up + 91.9% year-on-year. By product, the revenue of medium and high-grade liquor in 22q1 was + 91.0% to 1.575 billion yuan year-on-year, and the revenue of low-grade liquor was + 98.7% to 208 million yuan year-on-year. On the basis of the 21-year high base, even in the face of repeated epidemics and damaged consumption scenes in many places, the company is willing to achieve brilliant growth in all series of products, showing that the company has a good basic orientation and strong development momentum.
The channel strategy has achieved remarkable results, and the impact of the epidemic is generally controllable. During the reporting period, the company continued to implement the market strategy of “focusing on Sichuan, Hebei, Shandong and Henan, improving northeast and northwest, breaking through East and South China”, implemented the “3 + 6 + 4” marketing strategy of old wine, actively carried out channel optimization and accelerated the nationwide layout. The number of dealers in 22q1 increased by 157 to 2409 month on month. In terms of regions, the market in 22q1 province realized an operating revenue of 455 million yuan, a year-on-year increase of + 72.6%; The market outside the province realized an operating revenue of 1.202 billion yuan, a year-on-year increase of + 112.4%. During the reporting period, the company continued to push down the channel. Through channel research, the company performed well in 1-2 months. The sales volume in March was affected by the epidemic but was controlled in a whole. Considering that the sales volume of Baijiu consumption was low in 3-4 months, the annual sales accounted for a relatively low level, followed by the mid autumn national day, and the whole year is still expected to achieve high growth.
The cost investment is gradually restored and consumer opinion leaders are cultivated. The gross profit margin of 22q1 sales of the company was 80.83%, with a year-on-year increase of + 3.2pcts; During the period, the expense rate was 28.81%, with a year-on-year increase of + 5.2pcts, of which the sales expense rate increased by 3.9pcts to 18.46% and the management expense rate increased by 1.6pcts to 10.46% year-on-year; The net interest rate decreased by 1.7pcts to 28.39%. The company’s expense investment is gradually restored, adheres to the “C-end top” strategy, and cultivates consumer opinion leaders and radiates more core consumer groups by means of willing to travel with wisdom, famous wine into famous enterprises, brand honorary ambassadors and consumer clubs.
The secondary high-end market continues to expand and is willing to take advantage of the wind. China’s secondary high-end Baijiu market is constantly expanding with the upgrading of consumption. According to the Institute of statistics, sub high end wine has been the lowest price band. The 16 industry accounted for only 9%. The compound growth rate of 16-19 years was as high as 30%. By 2019, the volume of 80 billion of the volume of the liquor was 13%. We expect that in the next five years, the sub high-end price belt will still maintain a growth rate of about 20% and undertake the upgrading of medium and high-end price belt. Relying on the taste of large single products, the company successfully stuck in the sub high-end price band, and supplemented the product line through wisdom and crystal, which is expected to achieve brilliant performance in the wind of market expansion. The goal is to build “shede” into a sub high-end leading brand and the first brand of old wine category.
Layout the e-commerce platform to help the strategy of old wine. The company attaches importance to the Internet e-commerce sales model, makes layout on many e-commerce platforms, applies the latest streaming media e-commerce and other models, and establishes its own membership pool through accurate drainage to provide consumers with more three-dimensional services. In addition, the company incubates its own IP of “willing wisdom · old wine feast”, which transmits the value of old wine in many cities, adding a strong color to the process of accelerating the nationalization of old wine strategy.
In the past 22 years, it has continuously benefited from the bonus of secondary high-end + old wine expansion and maintained the “recommended” rating. The company’s 22q1 has made a successful start. Under the coordination of the four strategies of old wine strategy, double brand strategy, internationalization strategy and rejuvenation strategy, the company’s performance has achieved steady growth. We expect the company to continue to enjoy the secondary high-end and old wine expansion dividends in 22 years. Considering that if the epidemic situation continues, it will have an impact on the consumption scene, we adjusted the EPS forecast for 20222024 to 5.53, 7.57 and 10.15 yuan (the original forecast for 20222024 was 5.66, 8.01 and 10.68 yuan), and the corresponding PE of the current stock price is 26.8x, 19.6x and 14.6x, maintaining the “recommended” rating.
Risk tips: 1) risk of macroeconomic weakness: economic growth declines and consumption upgrading does not meet expectations, resulting in the slowdown of consumption growth; 2) Baijiu industry downturn risk. Baijiu industry boom and price trend is highly correlated, if Baijiu prices decline, may cause the enterprise revenue growth slowed sharply. 3) Policy risk. The demand and tax rate of Baijiu industry are greatly influenced by policies. If the relevant policies change, it may have a greater impact on the company’s revenue and profits. 4) The risk of epidemic aggravation. The Baijiu consumption scenario is reduced when the epidemic intensifies, which may impact the Baijiu industry boom.
