\u3000\u30 Shenzhen Fountain Corporation(000005) 68 Luzhou Laojiao Co.Ltd(000568) )
Events
On April 28, the company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company realized an operating revenue / net profit attributable to the parent company of 20.6427956 billion yuan respectively, with a year-on-year increase of 23.96% / 32.47% respectively; In 2022, Q1 operating revenue / net profit attributable to parent company were 6.312 billion yuan and 2.876 billion yuan respectively, with a year-on-year increase of 26.15% and 32.72% respectively.
Comments
The performance grew steadily, and the first battle of the 14th five year plan was won. The company focused on the strategy of “double brand, three product lines and large single product”. Guojiao 1573 achieved the same increase in volume and price, leading the growth of performance, and the improvement trend of medium and low-end products continued. At the same time, the company launched Luzhou Laojiao Co.Ltd(000568) 1952, black cover and other strategic new products to improve the product layout. In 2021, the company continued to promote the nationwide layout, and achieved good breakthroughs in the three strategic markets of East China, South China and Central Plains.
The profitability has been continuously improved and the cost control has been continuously optimized. In 2021, the company’s product structure continued to upgrade, and the proportion of medium and high-grade products increased to 89.12%, up 2.63 PCT from 2020. On the expense side, thanks to the fine management, the expense rate of the company in 2021 decreased as a whole, and the expense rates of sales / management / R & D / finance were 17.44% / 5.12% / 0.67% / – 1.05% respectively, with a year-on-year increase of -1.12pct / – 0.05pct/0.15pct / – 0.25pct. The superimposed cost control of product structure upgrading is more reasonable. The gross profit margin of the company in 2021 is 85.70%, up 2.65 PCT compared with 2020, and the profitability of the company continues to improve.
2022q1 continued high growth, with sufficient growth potential for the whole year. In 2022, Q1’s operating revenue / net profit attributable to the parent company were 6.312 billion yuan and 2.876 billion yuan respectively, with a year-on-year increase of 26.15% / 32.72% respectively, and the sales expenses decreased by 2.82pct to 10.66% year-on-year. Overall, in 2022q1, the gross profit margin of the company increased to 86.43%, a year-on-year increase of 0.39pct, and the profitability was further improved. At present, the company has completed the grant registration of equity incentive plan, and the enthusiasm of core employees is expected to be improved to further ensure the certainty of performance growth. On March 7, Mr. Liu Miao served as the Secretary of the Party committee and chairman of the group. At the same time, he continued to serve as the Secretary of the Party committee and chairman of the joint stock company. This personnel adjustment is also conducive to the integration of resources of the company. Throughout the year, the growth potential of the company is sufficient.
Investment advice
The company’s profitability continued to improve, and the annual growth potential was sufficient. We expect that the EPS of the company in 2022, 2023 and 2024 will be 6.72/8.20/9.57 yuan respectively. Based on the closing price of 210.73 yuan on April 29, 2022, the corresponding PE will be 31.35/25.70/22.02x respectively, giving a “recommended” rating.
Risk tips
Macroeconomic fluctuations exceeded expectations; Tightening of industrial policies; Food safety issues.
