\u3000\u3 Shengda Resources Co.Ltd(000603) 198 Anhui Yingjia Distillery Co.Ltd(603198) )
Event: the company released 2021 annual report and 2022 first quarter report. In 2021, the company achieved a revenue of 4.58 billion, an increase of 32.6% at the same time; The net profit attributable to the parent company was 1.38 billion yuan, an increase of 45.0% at the same time, and the performance was in line with the performance forecast data. In a single quarter, Q4 company achieved a revenue of 1.4 billion yuan, an increase of 14.3%, a net profit attributable to the parent company of 420 million yuan, a year-on-year increase of - 0.3%, a cash flow from operating activities of 5.23 billion yuan, an increase of 44.9%, a contract liability of 600 million yuan, an increase of 28.3%, and a good cash flow situation; In 2022q1, the revenue was 1.58 billion yuan, a year-on-year increase of + 37.2%, and the net profit attributable to the parent company was 550 million yuan, a year-on-year increase of + 49.1%.
In 2021, the company's potential energy increased significantly and remained stable in 2022q1. In terms of products, in 2021, the company's medium and high-grade Baijiu / ordinary Baijiu achieved a revenue of 3.08/1.23 billion yuan, a year-on-year increase of 44.7/10.7%. Medium and high-grade Baijiu accounted for 71.5%, an increase of 5.7pct year-on-year, and the product matrix continued to be optimized. In terms of regions, the company achieved a revenue of 2.73 billion yuan in Anhui market in 2021, a year-on-year increase of + 36.8%, mainly due to the third round of consumption upgrading in the province, and the large amount of cave storage led to the further improvement of product structure and profitability; In the market outside the province, the company realized a revenue of 1.57 billion yuan in 2021, an increase of 27.1% at the same time, with two wheel drive both inside and outside the province. In addition, in 2021, the company's net increase in dealers was 16, including a net increase of 20 in the province. The increase in the number of dealers in the province was mainly due to the company's focus on the volume of Dongzang Series in 21 years; In 2022q1, despite repeated outbreaks, the company's cash flow was still excellent. The net operating cash flow in Q1 was 530 million yuan, a year-on-year increase of + 264.4%.
The rise in the proportion of medium and high-end products drives the improvement of profitability. In terms of gross profit margin, the company's gross profit margin in 2021 was 67.5%, with an increase of 0.4pcts, and the gross profit margin in Q1 increased significantly to 71.4%, mainly due to the vigorous sales of high-end products driven by gifts and banquets during the Spring Festival. The potential of hiding in Lu'an base camp and Hefei market has become, and the product structure has been continuously optimized. In terms of expense ratio, the company's annual sales / management fees in 2021 were 9.7 / 4.3% respectively, with a year-on-year decrease of 2.4pct/0.7pct respectively; The change rate of sales expenses continued to drop to -2t/2027.5%, of which the change rate of management expenses continued to drop to -0.8582027.5%.
The product structure has been continuously optimized, and the market in the province has been continuously cultivated. From the perspective of consumption upgrading in the province, at present, the third wave of consumption upgrading is ushered in in the province in 2021, and the mainstream price belt is driving towards more than 300 yuan. Although affected by the fluctuation of the epidemic in the short term, the trend is slightly delayed. However, in the long run, the rapid expansion of the secondary high-end price belt will help drive the accelerated growth of Dongzang's performance in 16/20 years. The "three outstanding brands of Hui liquor" are expected to monopolize the secondary high-end price belt, and the pattern of Baijiu in the province has evolved into competitive and cooperative development since then. On the product side, Dongzang has been the main single product for 6 / 9 years. At present, it focuses on the county-level market and competes with the other two leading liquor enterprises in the province at the medium and high-end price band. In the next 16 / 20 years, Dongzang is expected to undertake the upgrading dividend of consumption in the province and take over the power for the provincial capital market, so as to further improve the profitability of the company. On the market side, the company focuses on the introduction of Dongzang series with Jiangsu market as the core, so as to improve the proportion of the market outside the province in the company's revenue; The provincial market has now gained a firm foothold in Lu'an and Hefei. In the future, it will speed up the replication of the model market and look for new increments of performance. Looking forward to the future, with the deep cultivation of dong6 / 9 channels and the iterative upgrading of Dong16 / 20, we are optimistic that the company will usher in improvement in the future.
Profit forecast and investment suggestions: we predict that the net profit attributable to the parent company in 20222023 will be RMB 1.83/2.32 billion, an increase of 32.1/27.0% at the same time. The net profit attributable to the parent company in 2024 is predicted to be RMB 2.88 billion. At present, the corresponding share price of PE in 20222024 is 23 / 18 / 15 times respectively. The company's product structure is relatively good. We are optimistic about the development space of main products and maintain the "buy" rating.
Risk warning: the market competition in the province is intensifying; The promotion of high-end products is less than expected; The epidemic situation affects the terminal movable pin.
