Everbright Securities: Gave Luzhou Laojiao a buy rating

2021-11-01Ye Qianyu and Chen Yantong of Everbright Securities Co., Ltd. conducted a study on Luzhou Laojiao and released a research report "2021 Third Quarter Report Review: The Potential of the National Cellar Continues, and the Profit Elasticity Continues to Be Released", this report gives a buy rating to Luzhou Laojiao, and the current stock price is 231.2 yuan.

Luzhou Old Cellar (000568)

Event: Luzhou Laojiao released the third quarter report of 2021, achieving revenue of 14.110 billion yuan in the first three quarters, an increase of 21.65% year-on-year, and net profit attributable to the mother of 6.276 billion yuan, an increase of 30.32% year-on-year. In the single quarter of Q3, the revenue was 4.793 billion yuan, an increase of 20.89% year-on-year, and the net profit attributable to the mother was 2.049 billion yuan, an increase of 28.48% year-on-year.

The national cellar maintained a good performance, and it is estimated that the growth rate of 1573 is better. 21Q3 company revenue increased by 21% year-on-year, it is estimated that the national cellar series grew steadily, the sales scale increased by 20% + year-on-year, and the overall average price was estimated to increase steadily under the contribution of medium and high-end liquor revenue. Channel feedback after the end of the National Day peak season, the national cellar annual payment collection task has been completed, East China, North China and other regions of the inventory is basically within a month of benign level. As of the middle of October, the height of 1573 batch price of about 910 yuan, and the eight generations of pu five price difference narrowed, the low 1573 batch price of about 650 yuan, in East China, North China and other market feedback is good, it is estimated that the Q3 growth rate is higher than the height of the product, the special qu series has improved compared with last year, it is estimated that the performance in the third quarter is relatively stable.

The profit margin under product structure optimization and cost control has steadily increased, and the performance elasticity has continued to be released. 1) 21Q3 gross profit margin of 87.51%, an increase of 0.61pct year-on-year, the momentum of the national cellar continued to promote the product structure to continue to optimize, and the gross profit margin increased steadily. The sales expense ratio was 15.73%, down 1.29pct year-on-year, the cost-effectiveness ratio in the Q3 peak season was further optimized, the channel cost was contracted, and the end consumer cultivation continued to advance. Management and R&D expense ratio was 5.91%, a slight increase of 0.45pct year-on-year. Taxes and surcharges accounted for 11.34% of revenue, down 2.68pct year-on-year, and it is estimated that it is mainly due to the disturbance of the pace of payment. In summary, the net profit margin of 21Q3 sales was 42.21%, an increase of 2.73pct year-on-year, and structural upgrades and cost-effectiveness optimization continued to promote the steady rise of profit margins. 2) 21Q3 sales cash collection of 4.398 billion yuan, down 14.81% year-on-year, it is estimated that it is mainly related to the company's third quarter of the suspension of goods and price action, as of the end of September contract liabilities and other current liabilities totaled 2.153 billion yuan, an increase of 35% from the end of June, the channel side confidence is still sufficient, follow-up performance growth has a certain reservoir.

The momentum of the national cellar continues, and the follow-up development under the strategic layout can be expected. In the short and medium term, the Mid-Autumn Festival National Day national cellar sales performance is better, the brand effect continues to verify, the annual task is completed as scheduled, at the end of September, the national cellar sales company has notified that it will no longer accept 1573 sales orders, special qu, century-old cellar orders have also stopped receiving, the company adheres to the quota and price system, and the sales work is steadily advancing. In the long run, the company has also increased the development of the Luzhou old cellar brand, launched a new black cap in the second half of the year, occupied the high-line light bottle wine subdivision track, and released the second high-end new product Luzhou old cellar 1952 in October, pulling up the luzhou old cellar brand height, and the future dual brand can be expected. Equity incentives have been introduced in September, binding the core management, the enthusiasm of the business backbone is expected to be further enhanced, and the follow-up brand potential is expected to accelerate the release.

Profit forecast, valuation and rating: Considering the completion of the company's performance in the first three quarters, the 2021 net profit forecast was raised to 7.713 billion yuan (+2.13% over the previous forecast), and the net profit forecast for 2022-23 was maintained at 92.99/11.017 billion yuan, corresponding to EPS 5.27/6.35/7.52 yuan, and the current stock price corresponding to P/E was 43/36/30 times, maintaining the "buy" rating.

Risk warning: The domestic epidemic has repeatedly affected sales, and the competition in the high-end liquor market has intensified.

A total of 38 institutions have given ratings in the last 90 days, 33 buy ratings and 5 overweight ratings; the average target price of institutions in the past 90 days is 262.17; the Securities Star Valuation Analysis Tool shows that Luzhou Laojiao (000568) good company rating is 4.5 stars, good price rating is 2.5 stars, and valuation comprehensive rating is 3.5 stars.