\u3000\u30 Shenzhen Fountain Corporation(000005) 68 Luzhou Laojiao Co.Ltd(000568) )
Luzhou Laojiao Co.Ltd(000568) publish the annual report of 21 and the quarterly report of January 22. In 2021, the revenue reached 20.64 billion yuan, a year-on-year increase of 24%, and the net profit attributable to the parent company was 7.96 billion yuan, a year-on-year increase of 32.5%. 4q21’s revenue was 6.53 billion yuan, a year-on-year increase of 29.2%, and the net profit attributable to the parent company was 1.68 billion yuan, a year-on-year increase of 41.1%. 1q22 achieved a revenue of 6.31 billion yuan, a year-on-year increase of 26.2%, a net profit attributable to the parent company of 2.88 billion yuan, a year-on-year increase of 32.7%, a contract liability of 1.76 billion yuan, a month on month decrease of 1.75 billion yuan and a year-on-year increase of 70 million yuan.
Key points supporting rating
In 2021, high-grade liquor and medium-grade liquor go hand in hand, and the strategy of “moving east to the South” has made a major breakthrough. (1) The sales volume of medium and high-grade Baijiu grew rapidly, with sales volume and ton price increasing by 25.4% and 3% respectively, achieving a revenue of 18.4 billion yuan, a year-on-year increase of 29.2%, accounting for 89.1% of revenue, an increase of 3.6pct year-on-year. (2) By product, high-grade wine fully enjoys consumption upgrading. The company has strong channel management and control ability, and the national layout continues to be promoted. We judge that the national cellar 1573 will increase by more than 30% in 2021. As a mid-range liquor, Tequ, a time-honored brand, will upgrade its products in 2020 and steadily push up its price. After more than two years of cultivation, with the improvement of consumer acceptance, it has entered the development stage. We judge that the sales will improve significantly in the third quarter of 2021. Other liquor revenue accounted for 9.8%, sales decreased by 51.8% year-on-year, and ton price increased by 89.4% year-on-year. At present, it is still in the period of product adjustment. (3) According to the information of the company’s annual report, the company made a major breakthrough in the “east to South” strategy in 2021, but the number of dealers decreased by 291 to 1930 year-on-year. We judge that this is related to the company adhering to high-quality development and continuously optimizing channel structure and dealer quality. (4) In 2021, the company’s gross profit margin was 85.7%, increased by 2.7pct year-on-year, the sales expense rate decreased by 1.1pct year-on-year, the net profit margin was 38.5%, increased by 2.5pct year-on-year, and the profitability was steadily improved.
Promote refined management, 1q22 profit margin continues to improve. 1q22 gross profit margin was 86.4%, a slight increase of 0.4pct year-on-year. The company requires resource elements to be highly matched with business actions, and the 1q22 sales expense rate decreased by 2.8pct year-on-year. The increase of management fee rate by 0.4pct may be related to the amortization of equity incentive expenses. 1q22’s net profit margin was 45.6%, up 2.3pct year-on-year, and its profitability was significantly improved.
The national layout was promoted in an orderly manner, the equity incentive scheme was implemented, and the company maintained a high potential energy development trend. (1) The company has implemented the regional market development strategy of “moving eastward, South map and rising in China”. The markets in North China, Sichuan and Chongqing have been intensively cultivated, the construction of market channels in East China, South China and Central South has achieved results, and the national market has developed in an orderly manner. (2) The implementation of the company’s restricted stock incentive scheme has deeply bound the interests of senior executives with the company, with a wide range of core backbone incentives, fully stimulated internal vitality and strengthened performance release motivation. (3) The company’s brand potential continues to rise and the national layout is advancing steadily. It is expected that the company’s expense rate will have some room for optimization in the future.
Valuation
It is estimated that the EPS from 2022 to 2024 will be 6.87, 8.59 and 10.69 yuan / share respectively, with a year-on-year increase of 26.5%, 25.0% and 24.4%, maintaining the buy rating.
Main risks of rating
The prices of pumao and puwu fluctuated. Channel inventory exceeded expectations. Repeated epidemics and lack of consumption scenes.
