\u3000\u3 Shengda Resources Co.Ltd(000603) 919 Jinhui Liquor Co.Ltd(603919) )
Events
In the first quarter of 2022, the company achieved a revenue of 705 million yuan, a year-on-year increase of 38.79%; The net profit attributable to the parent company was 165 million yuan, a year-on-year increase of 42.78%; Net profit deducted from non parent company was 163 million yuan, with a year-on-year increase of 41.86%.
Comments
Product structure optimization helped achieve a good start in the first quarter. Q1 revenue in 2022 reached the highest level in a single quarter since 2019. The successful start of the first quarter of 2022 is mainly due to the continuous optimization of product structure. Specifically, in Q1 2022, the revenue of high-end liquor was 438 million yuan (year-on-year + 44.51%), accounting for 62.72% (year-on-year + 2.37 PCT); The year-on-year revenue of liquor was RMB 2.6 billion (accounting for – 2.06 billion PCT), accounting for – 2.6% of the medium revenue; The revenue of low-grade liquor was 7.18 million yuan (year-on-year + 122.92%), accounting for 1.03% (year-on-year + 0.39 PCT).
The market revenue and the number of dealers in other provinces increased rapidly. Other regions outside Gansu are leading in revenue growth and dealer growth. In Q1 2022, the revenue of Southeastern Gansu / Lanzhou and surrounding / Central Gansu / western Gansu / other regions was 220 million yuan (year-on-year + 46.46%) / 180 million yuan (year-on-year + 28.91%) / 73.58 million yuan (year-on-year + 42.11%) / 56.7 million yuan (year-on-year + 20.58%) / 166 million yuan (year-on-year + 47.96%); The total number of dealers in China is 656, with a net increase of 67 in this period; There are 383 dealers in other regions, with a net increase of 60 in this period.
Fosun Group enables national expansion, and the “Northwest + East China” dual engine drives the release of performance flexibility. Adhering to the strategic plan of national layout, deep cultivation in the northwest and key breakthroughs, the company continues to consolidate the market in the province and actively expand the market outside the province. In 2020, Q2 Fosun Group became the largest shareholder of the company, providing resources and strategic support for the company’s five-year strategic plan (realizing a revenue of 3 billion yuan and a net profit attributable to the parent company of 600 million yuan in 2023). In October 2021, the company established sales companies in Shanghai and Jiangsu respectively, arranged the East China market, deeply integrated into the Fosun ecosystem through key customer operation and group purchase, and radiated five provinces and regions of Jiangsu, Zhejiang, Henan, Shandong and Jiangxi. At the same time, the company has continued to cultivate the Northwest market with Gansu as the core, and has created multiple models in Shaanxi, Inner Mongolia, Xinjiang and other places, forming a high-end brand and cohesion effect, which is expected to fully benefit from the consumption upgrading of the local market.
Investment advice
The product structure has been continuously optimized, and Fosun Group has enabled national channel expansion, so the company’s performance can be expected to be flexible. It is estimated that the operating revenue of the company from 2022 to 2024 will be 2.4/31/3.7 billion yuan respectively, with a year-on-year increase of 37% / 26% / 20%; The net profit attributable to the parent company was 500 / 600 / 700 million yuan respectively, with a year-on-year increase of 48% / 28% / 21%; The current share price corresponds to 29 / 23 / 19 times of PE. Maintain a “recommended” rating.
Risk tips
National channel expansion is less than expected; Aggravation of epidemic disturbance; Industry competition intensifies.
