\u3000\u3 China Vanke Co.Ltd(000002) 304 Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) )
Key investment points
Event: the company released the annual report of 2021 and the report of the first quarter of 2022. According to the announcement, the company achieved a total operating revenue of 25.35 billion yuan in 2021, a year-on-year increase of 20.14%; The net profit attributable to the parent company was 7.508 billion yuan, a year-on-year increase of 0.34%; The net profit deducted from non parent company was 7.373 billion yuan, with a year-on-year increase of 30.44%. In the first quarter of 2022, the total operating revenue was 13.026 billion yuan, a year-on-year increase of 23.82%; The net profit attributable to the parent company was 4.985 billion yuan, a year-on-year increase of 29.07%.
Comments:
The company ended successfully in 2021, with outstanding performance in 2022q1. In 2021, the company achieved a total operating revenue of 25.35 billion yuan, a year-on-year increase of 20.14%; The net profit attributable to the parent company was 7.508 billion yuan, a year-on-year increase of 0.34%; The net profit deducted from non parent company was 7.373 billion yuan, with a year-on-year increase of 30.44%. It will come to an end in 2021. In a single quarter, 2021q4 achieved an operating revenue of 3.408 billion yuan, a year-on-year increase of 55.80%; The net profit attributable to the parent company was 295 million yuan, a year-on-year decrease of 0.46%; The net profit deducted from non parent company was 523 million yuan, with a year-on-year increase of 280.56%. The upgrading of the company’s product structure continued in the fourth quarter of a single year. The dream series led the growth of performance and significantly increased the growth of revenue. The profit side of 2021q4 company has declined to a certain extent, which is mainly due to the large decline in net income from changes in fair value and the large increase in non operating expenses. In the first quarter of 2022, the company’s core products received high payment, and the dynamic sales were generally benign. In 2022, the company made a successful start. In the first quarter of 2022, the company achieved a total operating revenue of 13.026 billion yuan, a year-on-year increase of 23.82%; The net profit attributable to the parent company was 4.985 billion yuan, a year-on-year increase of 29.07%.
Continuously optimize the product structure, and the reform effect is obvious. Since the second half of 2019, the company has successively reformed its products and channels, and the reform results are becoming more and more obvious. At present, focusing on the high-end and branding strategy, the company focuses on the building of Haitian dream large single products, constructs the “2 + 5 + 10” leading product layout, implements the high-end building “number one project”, completes the cleaning of 715 SKUs, and continues to optimize the product structure. In 2021, the medium and high-grade liquor represented by blue series achieved an operating revenue of 21.521 billion yuan, a year-on-year increase of 21.95%; Ordinary liquor represented by Yanghe Daqu and Shuanggou Daqu achieved an operating revenue of 3.118 billion yuan, a year-on-year increase of 16.05%. In terms of channels, the company has carried out marketing adjustment and transformation since 2019, implemented the channel reform and development strategy of “one business first and multi business cooperation”, and gradually cleaned up and optimized the dealer structure. From the current situation, the effect of channel reform has gradually appeared, and the channel profit margin of the company has been improved to a certain extent.
In 2022q1, the profitability of the company was improved. Benefiting from the upgrading of product structure and the increase of the proportion of medium and high-grade wine, the gross profit margin of the company in 2022q1 was 77.30%, an increase of 1.14 percentage points year-on-year. From the expense side, the company’s expense control efforts are good. The sales expense rate of 2022q1 is 6.59%, an increase of 0.28 percentage points year-on-year; The rate of administrative expenses was 4.75%, a year-on-year decrease of 0.65 percentage points; The financial expense rate was – 0.75%, a year-on-year decrease of 0.65 percentage points. Based on the combination of gross profit rate and expense rate, the company’s net profit rate in 2022q1 was 38.29%, an increase of 1.53 percentage points year-on-year.
Maintain recommended ratings. It is estimated that the company’s EPS from 2022 to 2023 will be 6.45 yuan and 7.72 yuan respectively, and the corresponding PE will be 22 times and 19 times respectively. The company strives to increase its operating revenue by more than 15% year-on-year in 2022. With the steady progress of product structure upgrading and reform and adjustment, the company’s performance is expected to have a certain elastic growth space. Maintain the “recommended” rating of the company.
Risk warning. Product upgrading is less than expected, channel expansion is less than expected, food safety risks, intensified industry competition, etc
