\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 519 Kweichow Moutai Co.Ltd(600519) )
Key investment points
Event: Kweichow Moutai Co.Ltd(600519) announced that in the first quarterly report of 2022, 22q1 achieved revenue of 32.296 billion yuan, a year-on-year increase of 18.43%; The net profit attributable to the parent company was about 17.243 billion yuan, a year-on-year increase of 23.58%. Net profit growth exceeded market expectations.
The profit in the first quarter exceeded expectations and the trend of structural upgrading was clear. 1) Net profit exceeded expectations: the company previously predicted that the net profit attributable to the parent company in Q1 was 16.6 billion yuan, an increase of about 19% at the same time. The actual quarterly report showed that the net profit attributable to the parent company in Q1 increased by 23.58% at the same time, exceeding market expectations. We believe that there are four main reasons why the profit exceeds the expectation. First, the new Feitian is put into operation through self-supporting channels to boost the price of tons of wine; Second, the ex factory price of treasures and Maotai 1935 is high; Third, from this year, non-standard wines such as boutiques and Chinese zodiac in the dealer channel are mainly picked up at close to the guide price through the self operated store channel; Fourth, other Maotai flavor series (PU prince, Pu Yingbin, etc.) slimmed down and focused on the high-priced products in each series. The profit growth reflected in the report is higher than the revenue growth, which is consistent with the performance of channel tracking and reflects the more focused business of the company. 2) There is no need to worry about the operating cash flow due to the high increase in sales receipts: Maotai 22q1’s operating cash flow is negative, which is mainly due to the fluctuation of customer deposits and interbank deposits of non current items during the quarter, while the performance of recurring cash flow of sales is still good, which is reflected in the same increase of 41.2% in sales receipts and the month on month change of contractual liabilities, which is also higher than that in the same period last year; At the same time, the fluctuation of this account between quarters often occurs in history (such as 18q1, 19q3, 20q1, etc.).
Maotai liquor series is driven by two wheels, and the proportion of direct sales continues to increase. 22q1 Maotai Liquor / Series liquor achieved revenue of 28.860 billion yuan / 3.428 billion yuan respectively, with an increase of 17% / 30% respectively. 21q4 Maotai achieved 15% revenue growth, and 22q2 Maotai reached a new high in recent two years, with an obvious trend of accelerated growth; The growth of series liquor was mainly driven by Maotai 1935, and the sales profits of dealers were rich. In terms of sub channels, the income of wholesale agents / direct sales channels increased by – 5% / 128% respectively, which is due to the transfer of non-standard Maotai quota of distribution channels to self operated stores for delivery. At the same time, Feitian increment was put through direct sales channels, which has a strong pulling effect on ton price. From the perspective of the whole year, it is expected that the gift, collection and high-end business demand of high-end wine will also be relatively less affected by the epidemic.
There was little pressure to accelerate growth throughout the year, and reform made great strides forward. Under the pressure of the epidemic, the company still released performance higher than the previous guidelines, reflecting its confidence in the company’s annual growth capacity. In recent three years, the proportion of Maotai Q1 revenue in the whole year is between 25-26%. At the same time, considering that the contribution factors of Q1 growth are expected to continue to play a role, we expect to achieve a performance growth rate similar to Q1 in the whole year. In terms of splitting, the increase in flying volume, new product launch and non-standard indirect price increase are all sustainable throughout the year. At the same time, “I Maotai” has been put into trial operation since the end of March, which further enhances the company’s control over the channel. At the same time, it is expected to increase the delivery volume during the formal operation and bring additional sales increment. The new self owned e-commerce platform is expected to become a traffic portal and cultural propaganda position, and further enhance the company’s consumer control. We believe that the promotion of the new platform is a supplement to the sales system rather than subversion, and also reflects the strong reform willingness and ability of the new management. It is expected to launch more marketing reform measures in the future.
Profit forecast and investment suggestions: maintain the “buy” rating. According to the company’s annual report of 21 years and the quarterly report of 22 years, we slightly adjusted the profit forecast. In terms of revenue, the 22-year structural optimization has been established, and Feitian, the increase in the volume of new products and the price increase are expected to promote the accelerated growth of performance and the improvement of ton price. The cost rate is basically stable. It is estimated that the total operating revenue of the company from 2022 to 2024 will be 132.3/153177.5 billion yuan respectively, with a year-on-year increase of 20.89% / 15.67% / 15.94%; The net profit was 64.8/76.2/89.9 billion yuan respectively, with a year-on-year increase of 23.52% / 17.67% / 16.95%. The corresponding EPS was 51.58/60.70/70.99 yuan respectively (51.25/60.42 yuan in the previous 20222023), and the corresponding PE was 34 / 29 / 24 times in 20222023. It is highly recommended.
Risk tip: the sales of high-end alcoholic drinks are not as expected, and the continuous spread of the epidemic brings downside risks to the global economy and policy risks.
