(Report Producer/Author: Zheshang Securities, Ma Li, Zhang Xiaoqian)
01 Dealer Conference / Performance Target Sorting
The latest strategic direction of each wine company in the past 22 years: the word "stable" begins, and the trend of high-end does not change
Recently, various wine companies have held dealer meetings & shareholders' meetings & exchange meetings & release performance forecasts, wine companies' strategic attitude towards 22 years has gradually become clear, as a whole, under the complex situation of ————, 22 years of "stability" and "high-quality development" are still the main line of development of wine companies.
Although the major wine companies have not put forward clear growth targets, they are mainly high-quality. The 22 years is the year of "accelerating the realization of high-quality development" in Moutai in Guizhou; it is the year of "steady progress" in Wuliangye; it is the year of "coexisting with challenges and opportunities" in Luzhou Old Cellar; it is the year of "high-quality development" of Shanxi Fenjiu; it is the year of "focusing on high-quality cohesion and new leaps" in this world; and it is the year of "major opportunities" for drunkard liquor. Under the higher base of 21 years, although the growth rate of wine companies will naturally slow down, it will still take structural upgrading as the main line to achieve a double rise in revenue and profit.
Plate prediction: The 22-year liquor market is still in place, the industry will continue to switch from β investment to α trend, and the structural rotation market trend continues. From the analysis of the five major cycle angles, we believe that: 1) the macroeconomic, industrial cycle, incremental capital multiple factors have cast 16-20 years of liquor "annual cattle", but with the slowdown in economic growth, the liquor industry under a high base gradually entered a weak cycle, marginal incremental funds fell compared with the previous period, the liquor industry ushered in the "structural cattle", the internal dynamic differentiation of the plate continued to deduce; 2) although the liquor industry in 22 years under a high base, the performance growth rate of liquor companies or will generally slow down, but the prosperity is still there, the absolute performance of liquor companies will be absolute Steadily increase under the main line of price increase (but the rhythm differentiation will gradually increase). Specific sectors:
High-end wine: the growth rate differentiation has gradually increased, and stability is the basic main tone. 22 years Mao Wulu growth differentiation is expected to widen - Guizhou Moutai : the company at the beginning of the year on the non-standard and series of wine have taken price increase measures, and launched Moutai 1935 new products to increase profits, under the expectation of marketing reform and price increases, it is expected that the 22 years of Guizhou Moutai revenue, profit growth rate is expected to exceed 15%; Wuliangye: the company in the context of management changes in the background of the reform will increase, is expected to 22 years of revenue, profit growth rate of 14%, 18% respectively; Luzhou old cellar: taking into account the age of the national cellar and other terminal supply prices retail price has been raised + 1573 maintain steady growth + low-end products after the adjustment of the release of elasticity + special qu stable price release + 1952 new product contribution increment + equity incentive landing is expected to release performance dividends, is expected to 21 years of revenue, net profit growth rate of more than 20%.
Sub-high-end wine: speed and quality are equally important, and the whole country is transformed into a general direction. In the past 22 years, Shanxi Fenjiu, Shede Liquor, Liquor And other sub-high-end liquor companies have also paid attention to the deep ploughing of the base camp while accelerating the expansion of the market outside the province; on the other hand, more attention has been paid to the improvement of the quality of existing/new distributors, that is, while paying attention to market share competition, it is also sorting out existing problems, pursuing high-quality sustainable growth in product structure/channels, and it is expected that some liquor companies will still achieve high growth of more than 50% in 22 years.
Regional faucet wine: structural upgrading is accelerating, and the performance elasticity is greater. Considering that Gujing Tribute Wine and Present Generation Will Land Equity Incentives in 22 years, Yanghe Shares have landed equity incentives in 21 years, and the marginal changes in the in-depth reform of Kouzi Cellar are fully demonstrated, and the potential of Driving Tribute Wine products will continue to be released, and regional leading wines will have higher performance flexibility. (Source: Future Think Tank)
02 Focus 1: Play rhythm
2.1 The 22-year pre-holiday payment presents the characteristics of "early, flat and fast", and the opening can still be expected
Early: Play early. The Spring Festival date is earlier than in previous years, making the overall payment earlier, and at the same time purchasing multiple frequencies and small batches;
Flat: The target of the hit is slightly higher in the middle of the draw, and the concept of opening red is weakened. The overall payment target of the industry is about 30-45%, which is slightly higher than the overall level of previous years; wine companies pay attention to inventory rationality, so there is no general shouting to open the door.
Stable: The completion of the payment is relatively stable. Although some areas have been affected by the epidemic to a certain extent, in the context of some wine companies rolling accounts in advance at the end of the year + controlling goods, the current pace of payment collection has reached about 30%+, close to completion, and is currently in the stage of dynamic sales;
2.2 It is expected that the fundamentals of 22Q1 will be strongly certain, and the sub-high-end wine will remain highly elastic
The smooth pre-holiday payment lays a solid foundation for the performance of the 22Q1 statement, and it is expected that the performance of the 22Q1 wine company is highly certain. With the gradual weakening of the Mid-Autumn Festival National Day peak season, the concentration of spring festival wine consumption is getting higher and higher, and the proportion of Spring Festival income to last year's income has increased. For Wuliangye and other liquor companies, if you can complete about 30% of the payment collection progress before the festival, the annual performance completion pressure is small, if you can complete 40% of the payment progress, the annual performance is completed with a high probability of no worries, and the general high-end wine can complete about 35% of the whole year during the Spring Festival (the general rhythm: shipments before the 30th of the Waxing Moon account for 60% + during the Spring Festival, the first seven to the Lantern Festival accounts for about 35% of the Spring Festival, and 70% of the 35% quota will be completed before the Lantern Festival).
03 Concern 2: Moving the pace of sales
3.1 Re-order - high-end wine has strong certainty, showing a trend of "small drop in volume and rapid increase in price"
Review of 2020/21: High-end wines have maintained strong certainty, and the overall trend of "small price decline and rapid increase" has been shown, and the industry differentiation has increased
Different - The Spring Festival in 2020 and 21 has different impacts on the performance of the liquor peak season due to differences in the time point of the outbreak of the epidemic, the affected region, the epidemic prevention policy situation, consumer confidence, and channel response measures;
The same - 1) all affect the Spring Festival sales (sales distribution); 2) all have a small impact on high-end wine, and the impact on high-end wine is larger; 3) both affect the mood of channel stocking to a certain extent; 4) all affect the operation of follow-up wine companies.
3.2 2022 – The core observation point behind the moving sales is the post-holiday inventory
Focusing on 2022: Supplementary consumption will reduce the impact of the epidemic on liquor provinces, and the intensive sales are late, and the sales are stable and good
Comparison 1: From the perspective of the current epidemic distribution / impact period: This year, the major provinces of liquor are the most important provinces of the epidemic, and the duration covers the delivery stage, but they have improved before the holiday. Before the Spring Festival in 21 years, the epidemic situation in Hebei, Heilongjiang, Liaoning, Beijing and other places in China was sporadic; the main distribution provinces and regions of the epidemic in 22 years were Henan, Shaanxi, Tianjin, Beishangguang, Hangzhou and other regions, and the severity of some provinces was higher than that of 21 years; the impact period of this round of epidemic covered the Spring Festival delivery stage of major liquor enterprises, but before the festival, Henan and other places have begun to unseal, replenish consumption or slow down the impact of the epidemic on liquor provinces.
Comparison 2: From the Spring Festival transportation data: this year's Spring Festival transportation data is better than the same period last year, and the consumption of returning home is expected to rebound. In 2020, due to the outbreak of the epidemic a few days before the Spring Festival, most of the Spring Festival has been completed, so the 22-year Spring Festival data is lower than that of 21 years; in 21 years, due to the strict control of the epidemic in some provinces and regions + 22 years of relatively loose epidemic prevention and control, the 22-year Spring Festival data is significantly higher than that of 21 years (last year's strict policy of returning to the hometown was the most beneficial). In terms of specific data: 10 days before the Spring Festival (as of 2022.1.26), the passenger volume accumulated about 262 million person-times, +45% year-on-year, 20-65% year-on-year, and 19-65% year-on-year.
Comparison 3: From the point of view of the moving sales time point: the moving sales time point is late, and the consumption activity in the 2 weeks before the festival begins to increase. Compared with the previous pre-holiday consumers' early purchase, the activity of consumers in the last two weeks before the holiday has gradually increased this year, which was relatively deserted before, and the terminal sales time has been shortened.
04 Focus 3: When/how to lay out
The structural rotation style will continue, and the difference between the two expectations will ignite investment opportunities
Wuliangye: Marginal changes under undervaluation or obvious, waiting for the catalysis to land. Fundamentals: 1) Short-term - the current dealer pre-holiday payment is nearing the end, some large merchants have completed the annual payment, 22Q1 performance certainty is strong; considering that the demand for high-end wine with strong brand strength & gift attributes is still strong, it is expected that the epidemic will have a limited impact on Wuliangye's subsequent overall sales. 2) Medium and long-term - the company has excellent quality, and reform may be expected after management changes. From the perspective of batch price: Considering that the problems left over from history (8 generations of arrears of goods have been basically solved), under the control of the price, the price transmission will be smoother, and the batch price will break through 1,000. Valuation / stock price: The current valuation of Wuliangye has been in the 67% quantile of nearly 4 years, corresponding to about 28X PE in 22 years, and the valuation is extremely cost-effective. From the perspective of macro factors: 1) the consumption tax has the least impact on high-end liquor; 2) under the trend of US Treasury yields + interest rate cuts, the low valuation target has a certain degree of defense.
Shanxi Fenjiu: Potential energy continues to be released, accelerating into the performance upward channel. 21H1 Qinghua series revenue has reached 40%, considering that the company's current product strategy is "pulling out the bottom of the high control", Qinghua 40 China Dragon layout ultra-high-end, Qinghua 30 • Revival version of the launch will further enhance the brand image, and open the Qinghua 20 volume price space, we expect that the 22 years of Qinghua series revenue is expected to account for more than 40%, during the 14th Five-Year Plan period, Qinghua income accounted for 45%-50% of the Fenjiu series ratio. In the area south of the Yangtze River, the expansion speed outside the province may exceed expectations. We believe that there are two major points to see in the future development outside the province: 1) The Market Around Shanxi: the market space is about 180 billion yuan, and the market share of Fenjiu is less than 3%, and there is still great potential for development. 2) Southern market: the market space south of the Yangtze River is large, the consumer price is high, the foundation of Fenjiu is relatively weak before, as the southern market becomes the company's next focus to build a market, the future performance of the market outside the province may exceed expectations.
Shede wine industry: the contribution of new products can be expected, and it has both profit elasticity and certainty. The main growth of Shede still comes from the expansion of the main sales market, and the quality & speed of market development may exceed expectations. 21H1 main sales market (old dealers + new distributors) contributed 80% of the sales growth, the new region of the new investment contributed to the growth of 15%, 22 years the company will focus on improving the quality of dealers + consolidate key markets + actively develop new markets, to ensure the sustainability of growth. In the short term: In January 22, the company's payment is expected to exceed 2.8 billion, exceeding the level of the first quarter of the same period last year, and the 22H1 performance is high and certain; in the medium term, the company's products have adopted a new strategy - dual-brand strategy, old wine strategy, high-end strategy, etc., of which the original main single product taste and wisdom are willing to continue excellent performance in the price control mode (the price plate is stable and good), and the new products are currently stable in price and develop beyond expectations.
Greeting tribute wine: The potential energy of the Dongzang series continues to be released, or it is the target with the largest expected difference in opening red. In the short term, january is expected to collect more than 1 billion, has been close to the completion of the first quarter of last year 's volume (payment and delivery), according to the historical delivery rhythm calculation, taking into account the low base of 21Q1, it is expected that 22Q1 profit or reach 700 million, or the biggest target for the expected difference in opening red. In the medium and long term, the strong rise of the Dongzang series + channel thrust to consumption pull + group purchase (the main high-priced wine) accounted for continuously increasing; in the context of excellent economic growth in the province, the Dongzang series is expected to continue to exceed expectations.
Yanghe shares: The Spring Festival payment sales performance is excellent, and dream 6+ is the core growth pole. In the short term, the proportion of Yanghe Spring Festival payment is expected to exceed 45%, an increase of 5-10pcts year-on-year, Dream 6+ and Crystal Dream contribute more increments, while the upgraded version of Sky Blue achieves better growth, and Jiangsu's good epidemic control also helps the Spring Festival to move sales. In the long run, Dream 6+ is the core growth pole, in the process of continuous volume, the overall batch price is stable and rising, and is based on the layout outside the province; Shuanggou is expected to increase performance, the growth rate of Shuanggou in 21 years may reach 50%, and it is still expected to continue the high growth trend in 22 years; Sky Blue and Crystal Dream have completed the replacement in 21 years, and Sea Blue is expected to be upgraded in 22 years, which will help boost channel confidence and promote nationalization.
Excerpts from the report:
(This article is for informational purposes only and does not represent any of our investment advice.) For usage information, see the original report. ）
Featured report source: [Future Think Tank]. Future Think Tank - Official website