\u3000\u3 Shengda Resources Co.Ltd(000603) 919 Jinhui Liquor Co.Ltd(603919) )
Events
On the evening of April 25, 2022, the company released the first quarterly report of 2022: the revenue of 2022q1 was 706 million yuan, an increase of 38.8% at the same time; The net profit attributable to the parent company was 165 million yuan, an increase of 43% at the same time; Deduct non net profit of 163 million yuan, an increase of 42% at the same time.
The performance exceeded expectations and the reservoir effect was obvious
The company’s revenue in 2022q1 was 706 million yuan, an increase of 38.8% at the same time; The net profit attributable to the parent company was 165 million yuan, an increase of 43% at the same time; Deduct the non net profit of 163 million yuan, an increase of 42% at the same time, and the performance exceeded expectations. The gross profit margin of 2022q1 was 66.35% (with an increase of 0.85pct), which was caused by the further increase of the proportion of high-grade wine; The net interest rate was 23.33% (with an increase of 0.6pct), and the profitability was significantly improved. In 2022q1, the sales expense rate was 15.72% (with an increase of 4.1pct), and continued to increase market investment. In 2022q1, the net cash flow from operating activities was 269 million yuan (with an increase of 933%), of which 846 million yuan was collected (with an increase of 57%), and the Spring Festival had a good start. At the end of 2022q1, the contract liabilities were 400 million yuan, an increase of 42 million yuan month on month and 202 million yuan at the same time. The reservoir effect was obvious. Target for 2022: the company strives to achieve a revenue of 2.5 billion yuan, an increase of 40% at the same time.
The proportion of high-end liquor continued to increase, and the proportion outside the province further increased
In terms of products, the revenue of high-end liquor in 2022q1 was 438 million yuan, an increase of 45% at the same time, accounting for 62% (an increase of 2pct at the same time); The revenue of mid-range liquor was 253 million yuan, an increase of 29% at the same time, accounting for 36% (a decrease of 3PCT at the same time); The revenue of low-grade liquor was 07 million yuan, an increase of 123% at the same time.
In terms of distribution channels, the revenue of distribution channels in 2022q1 was 659 million yuan, an increase of 41% at the same time; The revenue from direct channels was 39 million yuan, an increase of 8% at the same time.
In terms of subregions, the revenue of Southeast Gansu in 2022q1 was 222 million yuan, an increase of 46% at the same time; The revenue of Lanzhou and its surrounding areas was 180 million yuan, an increase of 29% at the same time; The revenue of central Gansu was 73 million yuan, an increase of 42% at the same time; The revenue of the western region was 57 million yuan, an increase of 21% at the same time; The revenue of other regions was 166 million yuan, an increase of 48% at the same time, accounting for 24% (an increase of 2pct at the same time), and the proportion outside the province further increased. By the end of 2022q1, there were 656 dealers, with a net increase of 67.
Smooth expansion outside the province, four highlights in the future
In 2020q2, Fosun joined the company and injected new vitality into the development of the company. Fosun adhered to the five-year planning goal previously proposed by the company (i.e. revenue of 3 billion yuan and net profit of 600 million yuan in 2023). By 2031, the company strives to realize the three development strategies of “becoming one of the top 10 Chinese Baijiu, building a well-known Baijiu brand in China, and building a large Baijiu brewing base in China”, and build Jinhui Liquor Co.Ltd(603919) into a large industrial group focusing on Baijiu brewing.
At present, the company is constantly consolidating the market in the province and actively expanding the market outside the province in accordance with the strategic path of “layout the whole country, deeply plough the northwest and make key breakthroughs”. At present, the market layout of Shaanxi, Ningxia, Xinjiang, Qinghai and Inner Mongolia has set up offices in Beijing, Shanghai, Haikou and other cities. The East China market will be launched through partner recruitment in 2021. Qinghai and Inner Mongolia outside the province are cultivating and in the initial stage; Xinjiang has also been in operation for several years, and Shaanxi market is expected to enter the harvest period in the next 2-3 years.
Four highlights of the company in the future: first, it is expected that the market share in the province is expected to increase to more than 30%, which comes from weak areas in the province, such as the western region of Gansu Province, which continues to make up for weaknesses and harvest the share of other small brands in the province; Second, the proportion of products above 100 yuan continues to increase, and is expected to increase to more than 60% in the future; Third, the main strategy of expansion outside the province is “Echelon rolling development and asymmetric marketing”, and the northwest region is expected to accelerate expansion and increase market share; Fourth, the Company re launched the “longnanchun” brand and positioned the products above the secondary high-end. At present, the wine body has been prepared, and the product is expected to be in large quantities in the future.
Profit forecast
We are optimistic about the development of the company after Fosun takes over, and also optimistic about the continuous improvement of the proportion of the company above 100 yuan and the continuous improvement of the market share in the province. We expect that the EPS from 2022 to 2024 will be 0.97/1.22/1.50 yuan, and the current share price corresponding to PE will be 26 / 21 / 17 times respectively, maintaining the “recommended” investment rating.
Risk tips
Macroeconomic downside risks, the epidemic dragged down consumption, the growth of high-end wine was less than expected, and the expansion outside the province was less than expected.
