\u3000\u3000 Anhui Kouzi Distillery Co.Ltd(603589) (603589)
Hui liquor market analysis: the sub high-end scenery in the province is unique. Anhui has always been an important Baijiu market. According to our estimate, the current export volume of Baijiu market in Anhui is about 35 billion yuan. The competition in the price band of more than 300 yuan in Anhui market is relatively stable. We expect Maotai and Wuliangye Yibin Co.Ltd(000858) to account for about 1.5 billion respectively, divide up the high-end market of more than 1000 yuan. Gujing has an obvious leading advantage in the secondary high-end market, and the competition is concentrated in the price band of less than 300 yuan. In terms of sales, we expect Gujing to still occupy a significant advantage in the province in 2021. From the perspective of consumption trend, the overall volume and price of Hui liquor have decreased and increased, and the consumption upgrading trend is obvious. The sub high-end core price band of more than 500 yuan has entered the stage of gradual volume. At present, the mainstream consumer price belt in Hefei market has been about 300-400 yuan. The national famous liquor has concentrated on the core opinion leaders around the price belt of 500 yuan. Especially driven by the strong brand power of Maotai, Xijiu, Guotai, qinghualang and other sauce liquor have an obvious upward momentum, and have an impact on the high-end market of more than 600 yuan. Under this trend, Anhui local wine has launched major single products with a positioning of 500 yuan or higher, with a core price band of more than 500 yuan.
Anhui Kouzi Distillery Co.Ltd(603589) the reform is accelerating, and the results are expected to appear one after another. 1) Brand side: Liquor production capacity has been released one after another, laying a solid foundation and increasing the investment of brand publicity expenses. After 2019, facing the competition of competitive products in the province and the demand for new product promotion, the company began to strengthen public relations and marketing and increase advertising. We believe that Anhui Kouzi Distillery Co.Ltd(603589) has a profound brand heritage in the province, and it is far less difficult to regain brand recognition than to build a new brand. It is expected that the impact of the cost side on the overall profitability of the company and the impact time can be controlled. 2) Product side: launch “Jianxiang 518”, focusing on the secondary high-end price band. In recent years, the company has strengthened the 10-year / 20-year assessment of the gap, and the gap has recovered to a rapid growth rate in 10-year / 20-year. Compared with the proportion of gujinggu 8 and above products, there is still room for improvement in the proportion of kouzi in 10 / 20 years. The company began to reform its product system in 2019. On May 18, 2021, the company launched the strategic single product “concurrently fragrant 518”. At present, according to channel feedback, “Jianxiang 518” is selling well in Anqing, Wuhu, Huaibei, Chuzhou and other markets, with strong dynamic sales. We expect it to become a single product of more than 100 million. 3) Channel side: actively reform the channel system and mobilize the enthusiasm of dealers. In terms of dealer channels, the company adjusted and optimized the original dealer system. In terms of market layout, the company has built a three-level market system in the province and developed in gradient order. In addition, the company announced in 2020 that it would buy back shares for core backbone incentive. At present, the company has repurchased 3.13 million shares. In the future, with the completion of the company’s personnel adjustment, equity incentive is expected to be implemented smoothly.
Profit forecast and investment suggestions: we are optimistic about the effectiveness of the company’s channel reform and the promotion of large single products. We expect that the company’s net profit attributable to the parent company from 2021 to 2023 will be RMB 1.651/21.91/2.760 billion, a year-on-year increase of + 29.4/32.7/26.0%, the corresponding EPS will be RMB 2.75/3.65/4.60 respectively, and the corresponding P / E ratio from 2021 to 2023 will be 24 / 18 / 14 times respectively. It is optimistic that the company will maintain double-digit steady development in the medium and long term and maintain the “buy” rating.
Risk tip: the promotion of new products is not as expected; The progress of channel reform is lower than expected; Survey data or storage error.
