\u3000\u3000 Wuliangye Yibin Co.Ltd(000858) (000858)
Key investment points
Resumption: in 2021, it was lower than the market expectation in many aspects, which was the main factor to suppress the valuation
Question 1: why is the current valuation of Wuliangye Yibin Co.Ltd(000858) only 35x? Why is Wuliangye Yibin Co.Ltd(000858) valuation suppressed in 2021? Answer:
First, classic Wuliangye Yibin Co.Ltd(000858) : Although the company reformed the classic Wuliangye Yibin Co.Ltd(000858) channel in 2021 (such as launching a platform company), the market acceptance / consumer education required for high-priced wines still needs to be improved, so that the overall dynamic sales and rating performance are not as expected (the annual rating is about 1600-1800 yuan, currently about 1800 yuan);
The second and eighth generation Wuliangye Yibin Co.Ltd(000858) : the actual shipment volume (including the reissued volume in previous years) exceeds the shipment volume at the report end. Under the increase of volume, the wholesale price has not exceeded the market expectation of 1000 yuan at the beginning of the year (in the fourth quarter, the wholesale price briefly dropped to 950 yuan due to the return of funds from dealers, and the current wholesale price is about 970-980 yuan, which is basically the same as the latest payment price);
Third, series of wines: behind the steady and positive performance of the report end in 2021 is a slightly higher inventory, and market concerns may put some pressure on the performance in 2022;
Fourth, management: the internal management of the company changed slightly in 2021, which had a certain impact on the stability and the implementation of some policies;
Fifth, performance outlook for 2022: at the end of the year, the company raised the comprehensive cost of the eighth generation Wuliangye Yibin Co.Ltd(000858) to 969 yuan. It is expected that the company will support the price through volume control in 2022. However, due to the limited space for volume increase, the market expects that the performance growth rate of Wuliangye Yibin Co.Ltd(000858) in 2022 will rank lower in maowu Luzhou.
At present: the first quarter of 2022 has a good start, with strong certainty, and the marginal change under underestimated value may be significant
Question 2: why should we focus on Wuliangye Yibin Co.Ltd(000858) ?
Answer:
I. in terms of Fundamentals: 22q1 has strong performance certainty, and the reform can be expected after the change of management
1) in the short term: the performance of 22q1 is highly deterministic, and the movable sales are affected or limited by the epidemic situation. At present, dealers are nearing the end of the pre Festival payment, some big businesses have completed the annual payment, and some regions feedback that the pre Festival payment proportion is expected to be 40% + (many places in East China and southwest feedback that big businesses have basically completed the payment, and small and medium-sized businesses have paid 30% +), most regions have delivered goods, and 22q1 company is expected to have a good start, At the beginning of this week, we will focus on the performance of dynamic sales (which will determine the replenishment progress of 22q2). Considering that the overall market demand for high-end wine with strong brand strength and strong gift attribute is still strong, it is expected that the epidemic will have a limited impact on the follow-up overall dynamic sales of Wuliangye Yibin Co.Ltd(000858) .
2) in the medium and long term: the company has good quality, and the reform may be expected after the change of management. Recently Wuliangye Yibin Co.Ltd(000858) personnel has changed. With the accelerated pace of personnel adjustment / new marketing reform measures may be proposed, the classic Wuliangye Yibin Co.Ltd(000858) mobile sales will improve with the improvement of consumer Cultivation & the acceleration of digital implementation; With the strong demand side of the eighth generation Wuliangye Yibin Co.Ltd(000858) , the dynamic sales can be expected to be good.
II. From the perspective of rating: the rating in 2022 is over a thousand years. In 2021, the reason why the wholesale price did not exceed 1000 was mainly due to the large actual delivery volume (the overstocked seventh generation Wuliangye Yibin Co.Ltd(000858) inventory in the channel was gradually released at the time of the launch of the eighth generation general five) + the delivery rhythm was slightly faster than that in previous years, that is, the actual delivery volume in 2021 was expected to increase by 20%. Under the circumstances, the wholesale price could still remain at a high level of about 980 yuan, which is not easy on the one hand, but on the other hand, it shows that the actual consumption in the market is growing continuously, It was lower than expected, mainly because the market had high expectations for its bid breaking thousands in the early stage. Considering that the problems left over by history have been basically solved, the company will take measures to control goods and support prices in 2022 to consolidate the position of the eighth generation Wuliangye Yibin Co.Ltd(000858) , so the price transmission will be smoother and the approval price will break the millennium.
III. from the perspective of valuation / stock price: the valuation is cost-effective. The current Wuliangye Yibin Co.Ltd(000858) valuation has been in the 67% quantile of nearly 4 years, corresponding to about 28x PE in 22 years. The valuation is very cost-effective.
IV. from a macro / policy perspective: the landing probability of consumption tax may be low. 1) We believe that the landing probability of short-term consumption tax is low. Even if it does, the consumption tax has the least impact on high-end wine; 2) Under the trend of higher US bond yields and the enhanced expectation of interest rate increase by the Federal Reserve, the current undervalued target is somewhat defensive.
V. configuration time point: the recent callback is a good opportunity for additional configuration. Looking back on the three major adjustments in the past 21 years (after the Spring Festival, July and October), the adjustments triggered by the emotional side have rebounded significantly after being verified to be basically oriented to good certainty, and there is a structural excess return market; Based on the strong certainty of 22q1’s good start (at the end of the year 21, the winery’s goods control + payment rhythm is faster than that in previous years, laying the foundation for a good start. At present, the payment before the festival is coming to an end, and the 22q1 wine enterprise’s statements are highly deterministic and basically oriented to the good trend) + the recent sector adjustments are mostly triggered by the emotional / capital level, and we think the recent adjustment is a good opportunity for additional allocation.
Catalyst: personnel changes, the performance of the eighth generation Wuliangye Yibin Co.Ltd(000858) mobile sales is better & the bid price breaks thousands, the classic Wuliangye Yibin Co.Ltd(000858) mobile sales exceeds expectations, the reform measures are put forward & implemented, the introduction of secondary equity incentive, etc.
The future: the performance will maintain double-digit growth in 22 years and meet the high-quality development period in the 14th five year plan
Question 3: how is the development progress of group buying & digitization?
A: in the early stage, the company promoted the digital construction by means of terminal layer by layer code scanning in the decentralized profit control mode and cooperation with IBM and other enterprises, which plays an important role in ensuring the stability of market order, reasonable optimization of quotas, enabling new and old channels and ensuring the upward rating. In the future, the company will build an industry-leading digital enterprise in an all-round way, According to the 1.365 digital transformation strategic plan. In terms of channels, in 2021, the company’s headquarters established a group purchase department, and each theater established a group purchase organization to make changes from the organizational level. At present, the group purchase network covers nearly 30000 key enterprises, of which nearly 70% realize group purchase. Considering that the group purchase channel is an important sales channel for high-end wine (eighth generation Wuliangye Yibin Co.Ltd(000858) , classic Wuliangye Yibin Co.Ltd(000858) ), the increase in the proportion of group purchase channels may accelerate the upgrading of product structure.
Question 4: how to expect Wuliangye Yibin Co.Ltd(000858) future growth?
A: in 2022, the company will continue to maintain double-digit growth and meet high-quality development in the 14th five year plan. Looking back on 2021, the overall price of Wuliangye Yibin Co.Ltd(000858) system increased steadily, the series of wines became more focused, and the traditional terminals and group purchase channels were further optimized. Under the background of continuous capacity expansion at the price of 1000 yuan, the company will: 1) new optimization of product structure in 2022: the price of 8 generations Wuliangye Yibin Co.Ltd(000858) will increase steadily, the classic Wuliangye Yibin Co.Ltd(000858) years will be introduced into the market, all personalized products will appear, the series of wines will realize brand optimization and upgrading, and focus on the main products; 2) Brand promotion to achieve new breakthroughs; 3) Channel construction has been upgraded. Traditional channels are further optimized, emerging channels are further expanded, and group purchase channels are further improved; 4) Consumption cultivation is enhanced; 5) New progress has been made in digital transformation; 6) The relationship between manufacturers has reached a new height. During the 14th Five Year Plan period, the company will: 1) strengthen the construction of high-quality production capacity; 2) Continuously deepen the reform of marketing organization and promote the construction of digital armed marketing team; 3) Continuously optimize the product system, enrich the product matrix, and implement the three sectors of main brand + Series wine + ecological wine; 4) Ecological optimization and green priority; 5) focus on the government to build world-class Baijiu industrial clusters and vigorously promote the 3+3 innovation system.
Profit forecast and valuation
From 2021 to 2023, the company’s revenue growth rate was 18%, 14% and 17% respectively; The growth rate of net profit attributable to the parent company was 21%, 18% and 18% respectively, and EPS was 6.2, 7.4 and 8.7 yuan respectively; PE was 33, 28 and 24 times respectively. Considering the accelerated release of the company’s reform dividend, the current valuation is cost-effective, and a buy rating is given.
Catalyst: Baijiu demand is expected to exceed expectations, and prices continue to go up.
Risk warning: 1. Epidemic situation has repeatedly affected Baijiu selling. 2. The rise of classic Wuliangye Yibin Co.Ltd(000858) rating was lower than expected.
