\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 58 Wuliangye Yibin Co.Ltd(000858) )
Matters:
The company released the annual report of 2021 and the first quarterly report of 2022, and achieved an operating revenue of 66.209 billion yuan in 2021, with a year-on-year increase of 15.51%; The net profit attributable to the parent company was 23.377 billion yuan, a year-on-year increase of 17.15%. In 2021q4, the operating revenue was 16.488 billion yuan, a year-on-year increase of 11.19%; The net profit attributable to the parent company was 6.05 billion yuan, a year-on-year increase of 11.84%. In 2021, the company plans to pay dividends of 3.023 yuan per share. In 2022, the company’s business goal is to continue to maintain double-digit steady growth in total operating revenue.
Ping An View:
The operation of Luzhou flavor leader is stable and its performance meets expectations. In 2021, Wuliangye Yibin Co.Ltd(000858) revenue was + 15.51% year-on-year, and net profit attributable to parent company was + 17.15% year-on-year, which was in line with the previous performance forecast. Among them, single Q4 achieved an operating revenue of 16.488 billion yuan, a year-on-year increase of + 11.19%; The net profit attributable to the parent company was 6.05 billion yuan, a year-on-year increase of + 11.84%. The slowdown was mainly due to the high base of last year + the impact of the epidemic disturbance this year. In the Spring Festival of 22 years, the company made a good start, with an operating revenue of 27.548 billion yuan in 22q1, a year-on-year increase of + 13.25%; The net profit attributable to the parent company was 10.823 billion yuan, a year-on-year increase of + 16.08%. Even in the face of repeated epidemics, the company still achieved steady growth. The company continued to maintain the double-digit growth target in 2022, maintained the relationship between volume and price, supply and demand, and achieved high-quality development.
Optimize the structure of wine series and consolidate the foundation of growth. In terms of products, in 2021, Wuliangye Yibin Co.Ltd(000858) products achieved an operating revenue of 49.112 billion yuan, a year-on-year increase of + 11.5%, sales volume of + 3.8% and ton price of + 7.4%. The company adheres to the “three natures and one time” series liquor planning, and the product structure of series liquor continues to be optimized, realizing an operating revenue of 12.62 billion yuan, a year-on-year increase of + 50.7%, a year-on-year increase in sales of + 15.3% and a year-on-year increase in ton price of + 30.7%. At the beginning of March 2022, the company launched the “famous family of wuliangchun”, with an annual quota of only 500 tons. The market recommended retail price is 728 yuan / bottle, positioning the secondary high-end price band. Together with the “second generation wuliangchun” launched in 21, it has become the waist strength of the series of wines and filled the product matrix.
The cost investment was stable and the profitability was slightly improved. The gross profit margin of the company’s sales in 2021 was 75.35%, a year-on-year increase of + 1.2pcts; During the period, the expense rate was 11.86%, with a year-on-year decrease of -0.1pcts, of which the sales expense rate decreased by 0.1pcts to 9.82% and the management expense rate decreased by 0.2pcts to 4.38% year-on-year. The increase of gross profit margin and the decrease of superimposed expense rate increased the company’s net profit margin by 0.5pcts to 37.02%. The company continues to increase strategic investment, which is expected to further reduce the cost rate due to the scale effect.
The effect of controlling goods and raising prices is remarkable, and the scarcity of brands is strengthened. The company said that strengthening brand building will become the core goal of this year, and will focus on strengthening the scarcity of classic Wuliangye Yibin Co.Ltd(000858) to further control the number and quota of dealers. On March 24, the company issued a notice that the national dealers must complete the self inspection of the flow of goods before April 1, and said that they will not deliver goods until the inventory digestion is completed. In late March, the company raised the suggested retail price of the eighth generation and the fifth generation from 1399 yuan to 1499 yuan. With the steady implementation of the company’s strategy of controlling goods and raising prices, the price of puwu has increased slightly. At present, the wholesale price is stable at about 970980 yuan and the transaction price is about 10201030 yuan. The company plans to continue to control the goods and stabilize the price, realize the orderly transmission of the price, and is expected to achieve a wholesale price of more than 1000 within this year.
The new management sends a positive signal and continues to step up and deepen reform. On February 18, Zeng Congqin, who has worked in Wuliangye Yibin Co.Ltd(000858) for more than two years, took over as the new helm of Li Shuguang. At the reform promotion meeting, he said that he would complete the three-year action goal of state-owned enterprise reform by the end of June this year. The company will further emphasize the policy of “making up for weaknesses, strengthening weaknesses and fixing worries”, and continue to consolidate the good development trend of making progress in stability and making progress in stability. After taking office, the new management continues to send positive signals. We believe that with the completion of management adjustment, the follow-up execution will be further improved, and the company’s performance is expected to grow steadily and realize a reasonable return of value in the future.
Channel flat, fine management, digital marketing empowerment. In 2021, the company’s distribution channels increased by 10.5% year-on-year to 50.14 billion yuan, and the direct sales channels increased by 64.4% year-on-year to 11.6 billion yuan, mainly due to the company’s increasing the cultivation of consumer opinion leaders and online direct sales. The company will implement the graded quota system this year, screen high-quality sales and divide them into three levels, and give corresponding sales quotas to different levels, so as to ensure the market scarcity of products and improve the marketing quality of traditional channels. At the same time, the company will further develop new retail and e-commerce platforms, pay attention to the development of Ka supermarkets and group purchase of large enterprises, deeply cultivate new channels of group purchase, and master terminal dynamic sales in real time with the help of digital marketing management.
Investment suggestion: under the comprehensive effect of the double wheel drive of main brands and Cultural Liquor and the strengthening of the cultivation of consumption circles, we are optimistic about the continuous expansion of Wuliangye Yibin Co.Ltd(000858) in the 1000 yuan price band, which is expected to fully undertake the sub high-end consumption upgrading and the super high-end demand overflowed by Maotai, and realize the growth of volume and price certainty. We adjusted the EPS forecast for 20222024 to 7.12, 8.33 and 9.67 yuan (the original EPS forecast for 20222023 was 7.10 and 8.30 yuan), and the current stock price corresponds to pe23.5 yuan 3x, 19.9x, 17.1x, maintain the “recommended” rating.
Risk tips: 1) risk of macroeconomic weakness: economic growth declines and consumption upgrading does not meet expectations, resulting in the slowdown of consumption growth; 2) Baijiu industry prosperity downside risk. The prosperity of Baijiu industry is highly correlated with the price trend. If the price of Baijiu drops, the growth of enterprise revenue may slow down significantly. 3) Policy risk. The demand and tax rate of Baijiu industry are greatly affected by the policies. If the relevant policies change, it may have a great impact on the enterprise’s revenue and profit. 4) The risk of epidemic aggravation. Under the aggravation of the epidemic, the consumption scenes of Baijiu are reduced, which may have an impact on the prosperity of Baijiu industry.
