On the evening of April 29, Anhui Gujing Distillery Company Limited(000596) ( Anhui Gujing Distillery Company Limited(000596) , SZ) released the annual report of 2021. In 2021, the company achieved an operating revenue of 13.27 billion yuan, a year-on-year increase of 28.93%, and the net profit (i.e. the net profit attributable to the shareholders of the listed company, the same below) was 2.298 billion yuan, a year-on-year increase of 23.90%. In addition, in the first quarter of 2022, the company achieved an operating revenue of 5.274 billion yuan, a year-on-year increase of 27.71%, and a net profit of 1.099 billion yuan, a year-on-year increase of 34.9%.
After stepping out of the haze of negative performance growth in 2020, in 2021, Anhui Gujing Distillery Company Limited(000596) through a series of actions such as the acquisition of Mingguang liquor industry, the implementation of 5 billion fixed increase and the price increase of GU20 times, further accelerated the strategic layout of “nationalization and secondary high-end”. In 2022, the company plans to have an operating revenue target of 15.3 billion yuan and a profit target of 3.55 billion yuan.
Anhui Gujing Distillery Company Limited(000596) said in the annual report that from the perspective of the national market, the competitive advantage of enterprises comes from the influence of their own brand, product style and marketing operation mode. However, during the reporting period, the company still had pressure and deficiencies in nationalization, internal management system and supply chain management.
Gu 20% new growth point of performance
Anhui Gujing Distillery Company Limited(000596) at present, it has four brands: Vintage pulp, gujinggong, Huanghelou and laomingguang, among which Vintage pulp is the key product series of the company.
In 2021, the annual raw pulp achieved an operating revenue of 9.308 billion yuan, a year-on-year increase of 18.81%, a year-on-year increase of 1.4% in sales volume and a year-on-year increase of 17.17% in price. In the context of the increase in volume parity, the gross profit margin of raw pulp series in the year increased by 1.70 percentage points to 83.20% compared with the same period of the previous year, far exceeding that of other brands.
Analysts at Ping An Securities analyzed in the research report that gu8 and above products achieved rapid growth in 2021. Among them, GU20 focused on cultivating single products, putting them in some core markets, and giving priority to terminal channel display and publicity fees, so as to undertake the consumption upgrading in Anhui Province and attack the markets outside the province. “We believe that its consumption atmosphere has taken shape and entered the stage of accelerated volume, which is expected to accelerate the optimization of the overall structure”.
After years of product structure adjustment, the year raw pulp series has built a relatively complete product matrix. The year 30 and Gu 26 are positioned in the 1000 yuan price band. Gu 20 and Gu 16 are the main products of the company occupying the secondary high-end price band, and Gu 8 is the mainstream price band. As the core representative of the company’s sub high-end layout, GU20 has become a new performance growth pole.
It is worth noting that GU20 products were listed in 2018 and have experienced several successful price increases since then. At present, the circulation in the province is in the price band of 600 yuan, avoiding the local mainstream price band, participating in the competition in the secondary high-end market, and taking the lead in seizing the living space together with M6 +, and sauce and wine brands.
In terms of channels, in 2021, Anhui Gujing Distillery Company Limited(000596) online and offline revenue increased by 41.4% and 28.46% respectively year-on-year, with a net increase of 616 to 4007 dealers.
Dongxing Securities Corporation Limited(601198) analysts pointed out in the research report that the dealer system of Anhui Gujing Distillery Company Limited(000596) is a “1 + 1” model dominated by manufacturers. Dealers are only responsible for payment, transportation and other work. Under this model, the company has strong control over channels. During the period of industry adjustment, the company can increase cost investment against the market to expand the scale of revenue by focusing on the province and channel sinking.
However, the company also believes that the modernization level of its own supply chain management is low, and there are problems of low service level and efficiency. In addition, the internal management system of the enterprise is not excellent and the mechanism is not active, and the endogenous power needs to be further activated. Therefore, the company mentioned in the business plan that it should build Gujing “5g + industrial Internet” lighthouse factory, comprehensively promote the digital transformation, improve the incentive mechanism, and continue to promote “independent legal person system” and “innovation and entrepreneurship platform”.
the proportion outside the province continued to increase
From the perspective of industry trends, the transformation of Chinese Baijiu industry from an expanding market to a competitive market is accelerated. The strong are always strong, and the weak are even weaker. The “Matthew effect” is becoming more and more intense. The market sales share of Baijiu leading enterprises above designated size is rising, while the overall number of Baijiu enterprises is decreasing. At the same time, the consumption concept of rational drinking and healthy drinking has gradually taken root in the hearts of the people. In the choice of Baijiu consumption, consumers’ brand awareness has gradually increased.
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At the operational level, since 2016, Anhui Gujing Distillery Company Limited(000596) acquired Hubei Huanghelou liquor industry, and began to change from single flavor and single brand to multi flavor and multi brand. In 2021, the company took Mingguang liquor industry, a provincial liquor enterprise, into its command, laid out the field of bright green flavor Baijiu, and set foot in the sauce liquor boom by taking shares in the collection liquor industry.
In June 2021, Anhui Gujing Distillery Company Limited(000596) 5 billion yuan will be added. After completion, the designed production capacity of the company’s finished wine will reach 245000 tons, so as to support the development in the next 10 years. In 2022, the company plans to accelerate the construction of intelligent technology transformation project (Intelligent Park) for brewing production with high standards and high quality.
On the path of nationalization, Anhui Gujing Distillery Company Limited(000596) 2018 launched the nationwide investment promotion layout, and five key areas were designated in the first round. After years of development, the company has achieved a scale of 1 billion yuan in market sales in Jiangsu, Henan and Shandong.
In 2021, the revenue of Anhui Gujing Distillery Company Limited(000596) in Central China was 11.311 billion yuan, accounting for 85.23%, and the growth rate was lower than that in North and South China. It can be seen that the pace of the company’s market expansion outside the province has accelerated significantly. The operating revenue in North China and South China was 1.071 billion yuan and 878 million yuan respectively, with a year-on-year increase of 54.5% and 51.4% respectively.
In terms of profitability, the company’s net profit margin decreased to 17.89% year-on-year in 2021, and increased to 21.46% in the first quarter of 2022 Dongxing Securities Corporation Limited(601198) analysts pointed out in the research report that for Anhui Gujing Distillery Company Limited(000596) , the biggest doubt in the market is that the sales expense rate of the company has always been higher than that of competitors in the same industry. According to the data, in the first quarter of 2022, the sales expense ratio of Anhui Gujing Distillery Company Limited(000596) reached 30.2%, higher than 11.15% of Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) and 29% of Sichuan Swellfun Co.Ltd(600779) and 18.45% of Shede Spirits Co.Ltd(600702) and 21.81% of Jiugui Liquor Co.Ltd(000799) .
In this regard, according to the analysis of the above research report, Anhui Gujing Distillery Company Limited(000596) sales expense rate is high mainly for three reasons: first, under the “1 + 1” deep distribution mode, a large number of market development costs are borne by the company; Second, the sales platform company is still in the body, and the expense is relatively high; Third, the company is in the stage of rapid national market expansion, with large investment outside the province. Due to the competition in the province, the market investment needs to be maintained at a high level Dongxing Securities Corporation Limited(601198) analysts believe that the inflection point of the cost rate may appear when the nationalization process has a certain effect.
