\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 779 Sichuan Swellfun Co.Ltd(600779) )
Key investment points
Event: the company released the 2021 annual report and the first quarterly report of 2022. The annual revenue was 4.63 billion yuan, a year-on-year increase of + 54.1%, and the net profit attributable to the parent company was 1.2 billion yuan, a year-on-year increase of + 64.0%; Single Q4 achieved a revenue of 1.21 billion yuan, a year-on-year increase of + 14.1%, and a net profit attributable to the parent company of 300 million yuan, a year-on-year increase of – 13.4%; 22q1 achieved a revenue of 1.41 billion yuan, a year-on-year increase of + 14.1%, and the net profit attributable to the parent company was 1.2 billion yuan, a year-on-year increase of – 13.5%. The profit end of 22q1 was lower than the market expectation.
The product structure has been continuously optimized, and the growth rate of high-end revenue is bright. 1. In terms of products, the revenue of high-grade ( Sichuan Swellfun Co.Ltd(600779) Series) and middle-grade (tianhaochen and series liquor) reached 4.52 billion yuan (+ 54.3%) and 100 million yuan (+ 34.2%) respectively. Among them, the revenue growth of high-grade products was relatively bright and the product structure was significantly upgraded. 2. In terms of subregions, the eight core markets are + 61% year-on-year and other markets are + 44%; Due to the impact of external disturbance factors such as the epidemic situation, the growth rate of Henan and Hunan markets lags slightly in the eight markets, but the long-term good trend continues. 3. The company has comprehensively upgraded the collection packaging and wine body. After the price increase of No. 8, well platform and collection, the sales are in line with the company’s expectations. The profits of channels and dealers are optimized and solid steps have been taken towards high-end. 3. In 21q4, due to the high-end landing, the company took the initiative to raise prices and control goods. In 22q1, affected by the epidemic, the growth of revenue slowed down in both quarters, but the market rating is stable and the inventory is benign, and the short-term disturbance does not change the long-term growth trend.
The product structure was upgraded, the gross profit margin was increased, the cost was reduced and the efficiency was increased significantly, and the net profit margin was increased. 1. Throughout the year, the company’s gross profit margin increased by 0.3 percentage points to 84.5%, mainly due to the price increase of core products and the significant upgrading of product structure; 2, the company’s high-end strategy landing, actively expand the high-end Baijiu consumption circle, superimpose the scale effect of high revenue growth, the annual sales rate decreased by 1.5 percentage points to 26.5% year-on-year, and sales expenses and revenue increase to achieve a benign interaction. 3. Thanks to the company’s focus on digital transformation, cost reduction and efficiency increase were realized, and the scale effect was superimposed, the management expense rate decreased by 2.7 percentage points to 6.6%. Benefiting from the upgrading of product structure and the decline of expense rate, the net interest rate increased by 1.6 percentage points to 25.9%.
The expansion of the industry is superimposed with equity incentives, and the long-term growth momentum is sufficient. 1. The company continues to promote the three strategic plans of “high-end brand, product upgrading and marketing breakthrough”. In 2022, the company will continue to focus on the collection and above products, continue to promote the price increase of No. 8 and well platform, and actively promote product upgrading. 2, the company promoted 25 dealers to set up Sichuan Swellfun Co.Ltd(600779) high-end Baijiu sales company. The operation of the above and high-end products will be more flexible and efficient, and the new edition is still in the stage of goods distribution, with strong growth momentum. In terms of marketing, increase the layout of group purchase business, carry out consumer code scanning activities, accurately put in expenses, and continue to carry out circle marketing and other activities. 3. The first to third bid sections of Qionglai project are expected to be completed in August 2022 and the fourth bid section is expected to be completed in April 2023. The project will bring 20000 tons of raw wine brewing capacity and 40000 tons of new storage capacity to the company, with great long-term growth potential.
Profit forecast and investment suggestions. It is estimated that the EPS from 2022 to 2024 will be 3.07 yuan, 3.81 yuan and 4.64 yuan respectively, and the corresponding PE will be 26 times, 21 times and 17 times respectively. The company continued to benefit from the secondary high-end expansion bonus, and the implementation of equity incentive stimulated the long-term momentum. It was optimistic about the company’s long-term growth capacity and maintained the “buy” rating.
Risk tip: the risk of sharp economic decline and the risk of repeated covid-19 epidemic.
