\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 702 Shede Spirits Co.Ltd(600702) )
Events
On the evening of April 21, 2022, the company released the first quarterly report of 2022: the company’s revenue was 1.884 billion yuan, an increase of 83.25% at the same time; The net profit attributable to the parent company was 531 million yuan, an increase of 75.75% at the same time; Deduct non net profit of 517 million yuan, an increase of 72.45% at the same time.
Key investment points
The performance was in line with expectations, and the structure was optimized to improve the gross profit margin
The company’s revenue was 1.884 billion yuan, an increase of 83.25% at the same time; The net profit attributable to the parent company was 531 million yuan, an increase of 75.75% at the same time; Deduct the non net profit of 517 million yuan, an increase of 72.45% at the same time, and the net profit fell to the upper limit of the previous performance forecast center. The gross profit margin of the company in 2022q1 was 80.8% (with an increase of 3.2pct), which was driven by the high growth of medium and high-grade liquor and even old liquor products. The net interest rate of 2022q1 is 28.2% (with a decrease of 1.2pct), which is caused by 15.1% (with an increase of 0.5pct) of business taxes and surcharges, 18.5% (with an increase of 3.9pct) of sales expenses and 10.5% (with an increase of 1.6pct) of management expenses. The sales collection in 2022q1 was 1.82 billion yuan, an increase of 45.4% at the same time; The net operating cash flow was 420 million yuan, an increase of 7.5%. At the end of 2022q1, the contract liabilities were 390 million yuan, a month on month decrease of 270 million yuan and a year-on-year decrease of 50 million yuan.
The opening of Chongqing campaign is beneficial, and the expansion of production capacity is escorted
In terms of products, the main business revenue in 2022q1 is 1.783 billion yuan (an increase of 92% at the same time). We expect that old wine and T68 will perform well; The revenue of medium and high-grade liquor was 1.575 billion yuan, an increase of 91% at the same time, accounting for 88.3%; The revenue of low-grade liquor was 208 million yuan, an increase of 99%. In terms of channels, the distribution revenue in 2022q1 was 1.657 billion yuan, an increase of 100% at the same time; Online revenue was 125 million yuan, an increase of 26% at the same time; Online revenue was 125 million yuan, an increase of 26% at the same time, accounting for 7%. By the end of 2022q1, there were 2409 dealers, with a net increase of 157. In terms of subregions, the revenue in 2022q1 was 455 million yuan, an increase of 73% at the same time; The revenue outside the province was 1.2 billion yuan (an increase of 112%), accounting for 67%. In the first quarter, the company launched the Chongqing campaign, which was composed of two teams. The backbone was transferred from the whole country and the business elites from the southwest were selected for the competition, focusing on products such as taste sacrifice, wisdom sacrifice, crystal sacrifice and the way of sacrifice. The company intends to build a model market in Chongqing. We believe that certain achievements have been made so far, and it is expected to promote this model according to local conditions in the future.
In addition, the company plans to invest 7.053 billion yuan to expand production capacity, and the construction period is expected to be 5 years; After completion, it is estimated that the annual output of raw wine will be about 60000 tons, the energy storage capacity of raw wine will be about 342500 tons, and the annual koji making capacity will be about 50000 tons.
Prove yourself in 2021 and make great strides in 2022
We look at the company from three dimensions: short, medium and long term:
In the short term, the company has been on the right track, and the management and dealers are full of confidence; At present, Chongqing is building a model market and is expected to develop into key cities in the future.
In the medium term, the company has proved that it has the ability to achieve the set goals. In 2022, the company will continue to increase brand publicity, hold high and fight hard, increase regional expansion, and sink channels in advantageous regions.
In the long run, the differentiated competition brought by the company’s old wine strategy has attracted great attention from the market, the cultivation of channel consumers has been carried out, and it will take time to form a deep understanding; In addition, after Fosun takes over, it will basically solve the problems left over by Shede Spirits Co.Ltd(600702) history, and promote the company to establish an incentive mechanism. With “1 Tour” (integrating into Fosun tour) + “1 Platform” (docking platform between shede dealers and Fosun system) + “n product” (exclusive version of Fosun ecological characteristic products, services and rights and interests) as the core system, it will build a deeply empowered ecosystem for dealers; Finally, Fosun will develop and land Fosun system to jointly create products and broaden the sales channels of ecological BD.
The whole company is advancing steadily according to the established rhythm, and we reiterate that we are optimistic about the company’s logic: 1) on the product side, the company focuses on the old wine strategy, adheres to the dual brand strategy of shede and Tuopai, and focuses on building strategic single products such as taste shede and wisdom shede. 2) On the channel side, restore old customers in the old market, develop new customers in new markets, and focus on building key markets and key customers; In the development planning of key cities in 2022, we will continue to focus on the operation of key cities and develop according to the idea of “multi customer and multi product layout, all channel and all price segment coverage”. 3) In terms of circle marketing, the company focuses on famous wine, enters famous enterprises and smart clubs, accurately targets the circle, penetrates the head + waist + legs, and focuses on the core target customers. 4) Fosun has been in charge of the company for nearly a year. It is expected to accelerate the subsequent empowerment and promote the company to enter a new stage.
Profit forecast
Under the expansion of secondary high-end capacity, the company enjoys dividends. We are optimistic about the differentiated competitive advantage brought by the company’s old wine strategy and the acceleration of energy after Fosun takes over. We expect that the EPS from 2022 to 2024 will be 5.74/7.60/9.71 yuan, and the current share price corresponding to PE will be 26 / 20 / 15 times respectively, maintaining the “recommended” investment rating.
Risk tips
Macroeconomic downside risks, the epidemic dragged down consumption, the growth rate was less than expected, the promotion of old wine strategy was blocked, the expansion outside the province was less than expected, and the synergy between Fosun and the company was less than expected.
