\u3000\u3 Shengda Resources Co.Ltd(000603) 589 Anhui Kouzi Distillery Co.Ltd(603589) )
Event: the company released the 2021 annual report and the first quarterly report of 2022. In 2021, the company realized a revenue of 5.03 billion yuan, a year-on-year increase of + 25.4%; The net profit attributable to the parent company was 1.73 billion yuan, a year-on-year increase of + 35.4%; Deduct non net profit of 1.48 billion yuan, a year-on-year increase of + 19.5%; RMB 10 per share (including company tax). In the first quarter of 2022, the revenue was 1.31 billion yuan, a year-on-year increase of + 11.8%; The net profit attributable to the parent company was 490 million yuan, a year-on-year increase of + 15.5%.
The upgrading of product structure continued, and the growth of epidemic disturbance slowed down. 21q4 achieved a revenue of 1.4 billion yuan, a year-on-year increase of + 5.7%, and the revenue growth slowed significantly month on month. It is expected that it is mainly due to the company’s volume control and price increase of some products and the short-term decline of dealers’ enthusiasm for payment; Since March 22, the epidemic broke out in Wuhu, Ma’anshan, Huangshan and other key markets in Anhui Province, and banquet and other drinking scenes have been seriously impacted, which has a negative impact on 22q1 income. In terms of products, in 2021, high-grade, middle-grade and low-grade products will achieve 4.78 billion yuan (+ 24.5%), 100 million yuan (+ 97.9%) and 90 million yuan (+ 20.1%) respectively. It is expected that the gap of high-grade products will achieve rapid growth in 10 and 20 years, leading the continuous upgrading of product structure. In terms of sub regions, the annual revenue within and outside the province was 4.08 billion yuan (+ 28.5%) and 890 million yuan (+ 12.8%) respectively, accounting for a large proportion in the province. The company implemented the “1 + n” channel strategy in the province, carried out channel investment promotion by categories and sub regions, and continuously deepened marketing reform.
Increased investment in expenses and phased pressure on profitability. 1. The gross profit margin of the company in 21 years decreased by 1.3 percentage points to 73.9% year-on-year, which is expected to be mainly due to the increase of labor and raw material costs; The expense rate decreased by 1.5 percentage points to 18.0%, the company’s sales expense rate and management expense rate decreased by 0.9 and 0.8 percentage points respectively, the company’s net deduction interest rate decreased by 1.5 percentage points to 29.5%, and the profitability decreased slightly. 2. 22q1’s gross profit margin increased by 1.5 percentage points to 78.0%, which is expected to mainly benefit from structural upgrading; The sales expense rate increased by 2.8 percentage points to 14.9%, mainly due to the company’s increasing investment in brand construction and strengthening the development of group purchase and hotel channels; Overall, the net profit margin of 22q1 sales increased by 1.2 percentage points to 37.0%, and the margin of profitability increased significantly.
Improve channel control and equity incentive is expected to be implemented. 1. The company has made it clear that in the past 22 years, the center will focus on marketing, further develop group purchase channels, orderly develop special dealers, refine the assessment of dealers by products and channels, and establish Hefei marketing center to promote the front of sales functions and further strengthen the control of channels. 2. At present, the company has repurchased 3.13 million shares, which is planned to be used for employee incentive. Equity incentive can bind the interests of core employees. After the implementation of incentive in the future, it is expected to break out strong growth potential.
Profit forecast and investment suggestions. It is estimated that the EPS from 2022 to 2024 will be 3.18 yuan, 3.77 yuan and 4.43 yuan respectively, and the corresponding dynamic PE will be 16 times, 14 times and 12 times respectively. At present, the structure of Huijiu has been upgraded and the shift speed has been accelerated. The effectiveness of the company’s reform has gradually emerged and the “buy” rating has been maintained.
Risk tip: the risk of sharp economic decline and the risk of repeated covid-19 epidemic.
