\u3000\u30 Shenzhen Fountain Corporation(000005) 68 Luzhou Laojiao Co.Ltd(000568) )
Event:
The company released the 2021 annual report and the first quarter report of 2022. In 2021, the operating revenue reached 20.642 billion yuan, a year-on-year increase of 23.96%; The net profit attributable to the parent company was 7.956 billion yuan, a year-on-year increase of 32.47%; Deduction of non net profit was 7.884 billion yuan, a year-on-year increase of 31.61%; EPS 5.43 yuan / share; It is proposed to pay 32.44 yuan (including tax) for every 10 shares.
In the first quarter of 2022, the operating revenue was 6.312 billion yuan, a year-on-year increase of 26.15%; The net profit attributable to the parent company was 2.876 billion yuan, a year-on-year increase of 32.72%; Deduct non net profit of RMB 2.865 billion, with a year-on-year increase of 32.75%.
Key investment points:
In 2021, Guojiao continued its high growth, Tequ basically achieved the goal of price support, and its profitability improved steadily.
In 2021, the company's Baijiu business achieved a revenue of 20.415 billion yuan (the same as +24.12%), including 18.397 billion yuan (the same as +29.22%) of medium and high-end Baijiu. In terms of split volume and price, the sales volume / ton price of medium and high-end Baijiu increased by 25.4%/3.0% year-on-year respectively. It is expected that Guojiao 1573 series will continue to maintain high growth, and low-grade Guojiao will benefit from the secondary high-end dividends to achieve high elastic growth; The middle-grade liquor represented by Tequ, Jiaoling and Tequ 60 has achieved restorative growth. Tequ has initially achieved the goal of price support. It will enter the stage of scale increment in 2022. The sales caliber of Tequ 60 is close to 2 billion, and the two contribute to the main increment. On the one hand, the growth rate of product structure optimization is higher than that of 2021 + 652.2% (gross profit + 652.2%); On the other hand, some markets have entered mature areas, and the cost level has entered a downward trend stage. The annual sales cost rate of the company is the same as -1.12pct. The company's 2021q4 revenue / net profit attributable to the parent company were + 29.26% / + 41.14% respectively year-on-year, and the net profit rate was the same as + 2.17pct, mainly driven by the increase of gross profit rate. It is expected that the growth rate of Guojiao is better than that of medium-sized liquor.
2022q1 company continued the cost optimization trend and the profit performance exceeded expectations. In 2022q1, the company achieved a revenue of 6.312 billion yuan (the same as + 26.15%) and a net profit attributable to the parent company of 2.876 billion yuan (the same as + 32.72%), which exceeded our expectations. In the first quarter, Guojiao continued to achieve steady growth on the basis of high base. At the same time, the attribute of medium-grade wine in light and peak seasons was obvious. It is expected to achieve high growth in the Spring Festival, and the proportion of medium-grade wine revenue increased, resulting in a slight year-on-year increase in gross profit margin. The profitability of the company continued to improve in the first quarter, with a net interest rate of 45.6% (the same as + 2.26pct). On the one hand, it was affected by the tax and surcharge ratio of -2.54pct; On the other hand, the sales expense ratio is the same as -2.82pct. The company continues the cost optimization trend in 2021. Laojiao belongs to the brand franchise mode with low sales expense ratio among high-end liquor enterprises, which has a large space for cost optimization, and can gradually release the profit elasticity in the future. In addition, the company's 2022q1 sales revenue was 7.498 billion yuan (the same as + 16.30%), and the ending advance collection was 1.992 billion yuan, an increase of 82 million yuan year-on-year and a decrease of 1.974 billion yuan month on month.
Guojiao is still the core driving force for growth in the future, encouraging the implementation and accelerating the company's energy release. Since the recovery of the industry, gaoguojiao has increased by taking advantage of the trend of high-end capacity expansion. Compared with Feitian Maotai and puwu, gaoguojiao's base is still low, and there is still room for channel expansion; In the future, the low-grade national cellar will continue to benefit from the expansion of secondary high-end capacity, upward fission of price belt and low-grade drinking, so as to maintain elastic growth; Tequ series also entered the stage of scale increment after being adjusted in place in 2021. In September 2021, the company issued the equity incentive plan, which was approved by the SASAC in December. The incentive market has been looking forward to for a long time. The scheme has established a long-term incentive mechanism. The problem of insufficient incentive for senior executives, which has been worried by the market for a long time, has been better solved. The enthusiasm of senior executives and core backbone teams of the company has been significantly improved. It is expected to better release the business vitality of the company and have high certainty of the company's future performance.
Profit forecast and investment rating: we believe that the company has outstanding core competitiveness in the channel and brand side, management and employment can be promoted and demoted, the salary system is highly market-oriented, and the marketing team has strong combat effectiveness. After the equity incentive is implemented, it is expected that the brand potential energy and profit elasticity of the company will be released rapidly and continue to be optimistic about the long-term growth of the company. It is estimated that the company's EPS from 2022 to 2024 will be 6.80/8.35/10.15 yuan respectively, and the corresponding PE will be 31 / 26 / 21 times respectively, maintaining the "buy" rating.
Risk tips: 1) repeated outbreaks lead to consumption inhibition; 2) Increased market competition leads to increased costs; 3) The price of Baijiu fell due to the sharp economic fluctuation; 4) The pace of product upgrading is less than expected; 5) Food safety risks. In case of any difference between the relevant data and information and the contents published by the company, the contents published by the company shall prevail.
