Annual report & summary of the first quarterly report: the boom turns in 2021 and the performance of 22q1 is brilliant. In the previous summary of the interim report, we made a judgment on the fundamentals of the second half of the year that “the high-end is stable, the secondary high-end is fast, and the elasticity of real estate wine is emerging”. From the 2021 annual report, we basically verified our previous judgment, and the boom rotation of each price belt is being deduced. The high-end performance is stable, and there are highlights in some indicators. Although the speed of the secondary high-end has decreased, it still maintains a rapid growth rate, and the elasticity continues to maintain. After the medium term report of real estate wine, the advance payment basically reaches a new high, and the prosperity maintains an upward trend. After the “good start” of the Spring Festival in 2022q1, affected by the repeated epidemic, it has affected the mobile sales of Baijiu terminals. We are optimistic that high-end Baijiu will take the lead in recovering after the epidemic has been controlled, and it is expected to restart a new cycle of Baijiu under the catalysis of the peak season.
Revenue side: 2021 focuses on high-end products, and 2022 has a smooth “good start”. High end liquor: Maotai and Laojiao perform well, Wuliangye Yibin Co.Ltd(000858) focus on the price and steadily promote the pace of development. Secondary high-end: compared with other liquor enterprises, the performance flexibility of secondary high-end liquor enterprises in 2021 is greater. Benefiting from the expansion of the price belt and the upgrading of consumption in various places, the sub high-end industry is still in the growth stage, and there are multiple opportunities in the price belt. It is expected that the dynamic sales of 600 yuan products will accelerate in the future, and the price of 8001000 yuan will become a “new favorite”. Real estate liquor leader: the performance elasticity of 2021q3 began to appear, but the disturbance of 2022q1 epidemic had a great impact on the consumption scene of real estate liquor, and the performance of some real estate liquor enterprises was under pressure in the short term. Dazhong liquor: with the outbreak disturbance and the introduction of the new national standard, the performance of Dazhong liquor industry is still under pressure. The business of Beijing Shunxin Agriculture Co.Ltd(000860) Baijiu is flat, and the real estate is accelerated to be decommissioned.
Profit side: high-end drives the improvement of profitability, and the gross profit margin of most wine enterprises continues to grow. Gross profit margin: in terms of high-end liquor, the gross profit margin of Maotai and Laojiao changed little in 2022q1, Wuliangye Yibin Co.Ltd(000858) increased significantly (year-on-year + 2.0pct), mainly due to the rapid increase of the gross profit margin of the company’s series of liquor products. In terms of secondary high-end, except Sichuan Swellfun Co.Ltd(600779) gross profit rate decreased slightly (year-on-year -0.1pct), the gross profit margin of the other three liquor enterprises increased. Fen Liquor benefited from the increase of product ton price and the continuous optimization of product matrix, and the gross profit margin in 2021 was + 2.8pcts year-on-year. The gross profit margin of the two real estate wines, Suzhou wine and Suzhou wine, increased significantly in 2021q4, and the gross profit margin of Yanghe / Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) was + 13.7/15.2pcts year-on-year respectively. Expense ratio: the differentiation is obvious, and the scale benefit of national liquor enterprises is remarkable. In 2021, Maotai / Wuliangye Yibin Co.Ltd(000858) / Luzhou Laojiao Co.Ltd(000568) / Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) sales expense ratio was – 0.1 / + 0.1 / – 1.1 / – 3.7pcts year-on-year respectively, and in 2022q1, except Wuliangye Yibin Co.Ltd(000858) the other three have further decreased. Net interest rate: the profitability of most liquor enterprises has been improved, and Fenjiu has performed well. Among them, 2022q1 Fenjiu reached a new high under the control of the company’s fees, and the net interest rate increased by 5.5pcts to 35.2% year-on-year
Cash flow & advance collection: Q1 takes over, and the real estate liquor is high to enhance cashing. Sales collection: Q1 is the peak season of Baijiu sales, and the sales collection performance of Baijiu sector is excellent. In terms of price band, Maotai and Laojiao have increased significantly in terms of high-end liquor, and the collection of Wuliangye Yibin Co.Ltd(000858) 2022q1 was – 34.8% year-on-year, mainly due to the changes in payment policies before and after the Spring Festival in recent three years, resulting in fluctuations in bills and cash flow. The collection of sub high-end and real estate liquor enterprises in the single quarter of 2021q3 generally increased year-on-year. Advance receipts (contract liabilities): the growth of multi real estate liquor is obvious, of which Anhui Gujing Distillery Company Limited(000596) and Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) q1 are + 141.4% and 135.7% respectively year-on-year, leading among all liquor enterprises.
Investment suggestion: pay attention to the valuation and repair of real estate wine in the short term, and focus on the volume and price recovery of high-end leaders in the medium and long term. On the investment target, we first recommend Kweichow Moutai Co.Ltd(600519) , Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , Wuliangye Yibin Co.Ltd(000858) , Luzhou Laojiao Co.Ltd(000568) , 1) Kweichow Moutai Co.Ltd(600519) : the company will carry out reform in price and channel in 2022. With the effect of all-round anti-corrosion reform appearing, the brand-new Maotai is worth looking forward to; 2) Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) : 2022 has a good start and the reform is gradually entering the harvest period; 3) Wuliangye Yibin Co.Ltd(000858) : the company slightly adjusted the ex factory price of the eighth generation Wuliangye Yibin Co.Ltd(000858) and adjusted the market by gradually optimizing the product launch structure; 4) Luzhou Laojiao Co.Ltd(000568) : the company plans to implement equity incentive scheme. In the future, driven by Guojiao and Tequ, the development of the 14th five year plan will enter a new cycle.
Risk tip: the epidemic repeatedly affects the terminal mobile sales, the price of high-end wine fluctuates sharply, and the industry competition intensifies.
