\u3000\u3000 Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) (603369)
Event: the company released the performance forecast for 2021. It is estimated that the annual revenue will be 6.3-6.5 billion yuan, a year-on-year increase of 23% – 27%, the net profit attributable to the parent company will be 1.9-2.1 billion yuan, a year-on-year increase of 21-34%, and the non net profit attributable to the parent company will be 1.9-2.1 billion yuan, a year-on-year increase of 22-35%. The growth rate of revenue and profit is in line with our expectations and exceeds the company’s plan at the beginning of the year (the 21-year revenue target is 5.9 billion, striving for 6.6 billion, and the net profit target is 1.8 billion, striving for 1.9 billion).
Q4 company’s revenue was RMB 965-1.265 billion, a year-on-year increase of + 4% – 26%, and the net profit attributable to the parent company was RMB 200-400 million, a year-on-year increase of – 21% to 58%; If calculated according to the median value, the revenue of Q4 company was 1.065 billion yuan, a year-on-year increase of + 15%, and the net profit attributable to the parent company was 300 million yuan, a year-on-year increase of + 18.9%.
Revenue side: Sales of special a + products continue to improve. In 2021, the company is expected to achieve a revenue of 6.3-6.5 billion yuan, a year-on-year increase of + 23% – 27% (Q1: + 35.35%; Q2: + 27.32%; Q3: + 15.76%; Q4: + 4% to + 26%). The company’s plans for the first three quarters are well completed, and Q4 company is expected to close accounts in advance. The company’s “special a + products” with ex factory tax price of more than 300 yuan grew well, with a year-on-year increase of 35%, far exceeding the company’s revenue growth, and the proportion further increased to about 65% from 60% last year.
Profit side: product upgrading is expected to drive the increase of gross profit margin. In 2021, the company realized a net profit attributable to the parent company of RMB 1.9-2.1 billion, a year-on-year increase of + 21-34% (Q1: + 38.78%; Q2: + 36.36%; Q3: + 23.82%; Q4: – 21% to + 58%). The company’s gross profit margin in the first three quarters was 72.78%, year-on-year + 1.09pct, of which Q3 gross profit margin was 78.48%, year-on-year + 1.7pct. Throughout the year, we believe that with the large-scale sales of special a + products, the company’s gross profit margin is expected to continue to increase.
Review of the 21st year: the upgrading of the four development projects has been smooth. 21q1 company upgraded the Sikai, and the ex factory price was increased from 450 yuan to 480 yuan. It adopted the dual track system of cooperation and price, and the new Sikai was officially introduced into the market at the end of May 21. Up to now, the wholesale price of xinsikai has been stable at 420-430 yuan and the terminal price is 450-460 yuan. The channel profit has been effectively improved. The successful card slot is 400-500 yuan, which is expected to benefit from the upgrading of consumption in the province.
22 year Outlook: seek fast and high-quality development, and strengthen the guarantee of marketing mechanism. The year 22 is the second year of the 14th five year plan, and it is also a key year to achieve the goal of 10 billion yuan in the 14th five year plan ahead of schedule. At the 22nd annual development conference, the company proposed to “seek fast in good” and “good” is the premise of fast, promote high-quality development, adhere to the 13445 strategy, that is, grasp one main line, follow the three modernizations strategy, enhance four confidence, deepen four campaigns and strengthen five guarantees. The first main line is “focus on high quality and focus on new leaps”. The three modernizations are differentiation, high-end and nationalization. The four campaigns are Guoyuan V-series battle, Guoyuan K-series promotion battle, Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) brand activation battle and market breakthrough battle outside the province, so as to continue to promote the coordinated development of brands, products and regions. In addition, in the next 22 years, the company will strengthen the guarantee of system and mechanism. On the one hand, the company will orderly establish the three brand business departments of V9, Guoyuan and Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) and Gaogou sales company. On the other hand, it will establish V99 alliance at the development conference, select 99 dealers from key markets inside and outside the province to establish alliance, enjoy one-to-one guidance of the company’s leaders and various training and learning opportunities, and enhance the strength of dealers, At the same time, play a benchmarking role and unite to complete the company’s marketing objectives.
Medium and long term outlook: the marketing mechanism is guaranteed to follow up, and the equity incentive is expected to be launched, which is optimistic about the long-term development of the company. The company plans to strive to achieve revenue of 10 billion yuan and strive for 15 billion yuan in 2025, corresponding to an annual growth rate of 15% and 25%. In the next few years, the company has a clear strategy, that is, focusing on the development of V-series and K-series, and greatly increasing the proportion outside the province. At the same time, the company’s marketing guarantee mechanism has been continuously optimized and upgraded. On the one hand, it has orderly established the three brand business departments of V9, Guoyuan and Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) and Gaogou sales company. On the other hand, it has established the V99 alliance at the development conference, which is conducive to uniting to complete the company’s marketing objectives. In addition, the company issued the equity incentive plan in 20 years, completed the repurchase plan at the end of 21 years, and the 22-year equity incentive is expected to be launched. At that time, the vitality of the company is expected to be further released.
Profit forecast: in the short term, the company’s four products will be upgraded, with a secondary high-end price band of 400-500 yuan, which is expected to benefit from the upgrading of consumption in the province. In the long run, the company’s product structure continues to improve, the V-series strategy is redeployed, the K-series is upgraded and upgraded, the national layout is continuously promoted, the marketing mechanism guarantee continues to follow up, the equity incentive is gradually implemented, and the company’s vitality is expected to be further released. We predict that the revenue growth of the company from 2021 to 2023 will be 26%, 20% and 18% respectively; The growth rate of net profit was 29%, 24% and 19% respectively, and EPS was 1.61, 1.99 and 2.36 yuan / share respectively. Considering the current valuation of the Baijiu industry and the characteristics of the regional leading companies, we maintain the company’s “buy” rating according to the 2022 performance to 30 times PE and the target price of 60 yuan per year.
Risk tip: the competition in the province intensifies, and the company has major management defects; Macroeconomic fluctuations have taken place, Baijiu consumption has declined sharply.
