\u3000\u3000 Shede Spirits Co.Ltd(600702) (600702)
The company released the performance forecast for 2021: it is estimated that the net profit attributable to the parent company will be RMB 1.23-1.28 billion in 2021, with a year-on-year increase of 112% – 121%. After deducting non recurring profits and losses, the net profit is expected to be RMB 1.19-1.24 billion, with a year-on-year increase of 116% – 125%. The operating revenue is expected to increase by about 83% year-on-year (about 4.948 billion yuan). In Q4 alone, it is estimated that the company’s revenue is about 1.341 billion yuan, a year-on-year increase of 42.84%, and the net profit attributable to the parent company is 260-310 million yuan, a year-on-year increase of – 3.67% ~ + 14.83%.
Tuopai shede brand has a deep accumulation, and its popularity and market foundation will be laid before 2013. From “long years of wine dripping Tuopai love” to “smart life taste willing”, and then to “willing wine, every bottle is old wine”. Tuopai willing’s famous wine gene and old wine reserve provide the basis for national development; Since 2020, the company has achieved remarkable results in mechanism reform. According to the principles of brand focus, market focus and channel focus, the national market is divided into three categories: key market, development market and potential market, focusing on Sichuan, Hebei, Shandong and Henan, improving northeast and northwest, and breaking through East and South China; With the mode of “multi products, multi customers and all channels”, focusing on resources, we have made important breakthroughs in key markets such as East China.
The core reason for this round to get out of the trough is that the price of products such as taste willing to restore rigidity and the channel thrust is strengthened. The company implemented the “3 + 6 + 4” marketing strategy of old wine on its products, reduced the capital occupation of dealers and significantly improved the profitability of dealers such as taste willing by reducing the single payment requirements of dealers and establishing seven front warehouses. The company’s medium and high-end brands, such as shede series, account for about 80% of its operating revenue, of which taste shede accounts for the absolute majority. Its market rating has gradually stabilized at around 350 yuan since 2021. The transaction price is benchmarked to crystal Jiannanchun, which ensures the terminal profits of dealers and tobacco hotels, and also attracts the return of old dealers. In 2021, the company launched Tuopai liuliang, positioning itself in the 50 yuan light bottle wine market, It is expected to become the starting point of the revival of “Tuopai”.
From January 1, 2022, the company will increase the ex factory price of taste shede (Collection) by 30 yuan / bottle and the ex factory price of wisdom shede (Collection) by 50 yuan / bottle. Recalling the policies of raising the supply price of crystal shede terminal by 20 yuan / bottle, taste shede terminal by 20 yuan / bottle and shezhidao series terminal by 10 yuan / bottle on October 15, 2021, it is expected that the company will further sort out and optimize the product positioning through price strategy in the future, and is expected to create 400-600 yuan taste shede, 600-800 yuan wisdom shede Collection of 800-1000 yuan and super high-end product echelon of more than 1000 yuan.
Investment suggestion: we believe that the trend of industrial structural expansion will remain unchanged in 2022. The company adheres to the “old wine strategy”, and the reserves of high-quality old wine exceeding 120000 tons are a strong guarantee. The popularity of sauce wine has also accelerated the maturity of the price range of 300-800 yuan. In the future, the volume increase brought by the expansion of price range + rapid national layout will continue, We estimate that the net profit attributable to the parent company from 2021 to 2023 will be RMB 1.249 billion, RMB 1.861 billion and RMB 2.459 billion respectively, and the corresponding EPS will be RMB 3.76, RMB 5.61 and RMB 7.40 respectively. The corresponding PE of the current stock price will be 54 / 36 / 28 times respectively, maintaining the “recommended” rating.
Risk tip: the epidemic situation repeatedly affects consumption; Intensified market competition; Food safety accidents.
