Caixin Securities: Gave Wuliangye a buy rating with a target price of 270.2 yuan

2021-11-03Caixin Securities Co., Ltd. Zou Jianjun, Yang Yuan conducted a study on Wuliangye and released a research report "Q3 speed reduction mainly due to rhythm adjustment, solid foundation stable and far-reaching", this report gives a buy rating to Wuliangye, believing that its target price is 270.20 yuan, the current stock price is 199.13 yuan, and the expected increase is 35.69%.

Wuliangye (000858)

Investment Points:

Event: The company released the third quarter report of 2021, the first three quarters achieved revenue of 49.721 billion yuan, an increase of 17.01% year-on-year, and the net profit attributable to the mother was 17.327 billion yuan, an increase of 19.13% year-on-year; q3 achieved revenue of 12.969 billion yuan in a single quarter, an increase of 10.61% year-on-year, and achieved a net profit attributable to the mother of 4.127 billion yuan, an increase of 11.84% year-on-year, and the performance was slightly lower than expected.

q3 Revenue was lower than expected and was affected by the pace of shipments and payment collections. The company's q3 revenue growth rate is less than expected (an increase of 10.61% year-on-year), judging that it is the impact of the pace of delivery and payment collection, 2021h1 The company's delivery and payment collection progress is significantly faster than the same period in previous years, and the channel feedback in the first half of the year The company has more than seven generations of Wuliangye reissued, so q3 There is a certain inventory digestion, superimposed parts of the epidemic repeatedly affected, the company's shipment volume is less than expected. In terms of cash flow, Q3 sales revenue was 15.88 billion yuan, an increase of 59.4% year-on-year, faster than the revenue growth rate, at the end of q3, the advance receipts + contract liabilities were 4.70 billion yuan, a decrease of 1.64 billion yuan, and the net operating cash flow increased significantly by 141.1% year-on-year, and the quality of revenue was relatively high.

The dual optimization of product structure and channel structure continued to improve profitability, and the q3 tax and surcharge rate increased more year-on-year. Q3 Gross margin increased by 1.6pct year-on-year to 76.1%, reflecting the obvious effect of product structure optimization and group purchase ratio on ton prices. Q3 Taxes and surcharges increased by 1.2pct to 15.2% year-on-year, or related to the acceleration of production rhythm and the slowdown in revenue. The sales expense ratio and management expense ratio decreased steadily, year-on-year -0.2/-0.1pct, respectively, the expense side remained stable as a whole, and the net profit margin increased by 0.5pct to 33.4% year-on-year.

The short-term pace adjustment is for more certain long-term growth, the actual sales performance is good, and the fundamentals remain solid. We believe that the short-term rhythm adjustment is for more certain long-term growth, the company pays attention to the quality of growth while pursuing the growth rate, reasonably controls the delivery rhythm to ensure the health of the price plate and inventory, and continues to accumulate momentum in the channel and organizational system. Three major growth engines continue to support the stable performance of fundamentals: 1. The actual sales situation of the Puwu terminal is excellent. Since the beginning of this year, the overall batch price of Puwu has been stable under the condition of increased shipments, and the current inventory has remained low, and the annual payment collection target has been basically completed. The proportion of group buying channels continued to increase, pushing up tonnage prices and thickening profits. 2. Classic Wuliangye has established a 1+n+2 channel model, and continues to optimize the details according to the actual market situation, and the company has increased its efforts to do consumer goods appraisal activities in the early stage of market operation, which is expected to gradually form a stable consumption circle for its cultivation and prepare for subsequent releases. 3. The focus of the series of wine brands continues to advance, the company focuses on resources to create four major brands of fragrant series wines (Wuliangchun, Wuliangol, Wuliang Special Qu, Jianzhuang), some products are renewed and upgraded, the channels continue to sort out and promote the investment work, and it is expected that the follow-up series of wines will gradually contribute more performance increments. Wuliangye is still the most powerful aromatic liquor with the strongest brand power, with the basis for continuous price increases. Adhering to the development concept of steady and sustainable growth, the company is forward-looking and solidly promoting the implementation of the strategy, continuing to rationalize channels, enhance brand power, and improve management and operational efficiency, we continue to be optimistic about the company's future steady growth.

Profit Forecast and Investment Advice: The company's revenue rhythm is adjusted, we adjust the company's profit forecast accordingly, and it is estimated that the company's total operating income for 2021-2023 will be 667.5/778.1/89.35 billion yuan, respectively, with a ratio of +16.5%/+16.6%/+14.8%; Attributable net profit is 234.0/276.1/31.90 billion yuan, +17.2%/+18.0%/+15.5% year-on-year; eps are 6.03/ 7.11/8.22 rmb/share. Considering the high barriers in the high-end liquor industry, the company's stable position as the leader of fragrant liquor, the high certainty of the volume and price rise, and the future growth space is still considerable, giving the company 22 years 34-38 times pe, corresponding to the stock price range of 241.7-270.2 yuan, maintaining the "recommended" rating, and the short-term correction ushered in a buying opportunity.

Risk Warning: Risk of brand power damage; Risk of classic Wuliangye's dynamic sales falling short of expectations; risk of group purchase channel construction not meeting expectations; risk of large macroeconomic downturn; and risk of tightening industry supervision.

A total of 44 institutions have given ratings in the last 90 days, 41 buy ratings and 3 overweight ratings; the average target price of institutions in the past 90 days has been 283.36; the Securities Star Valuation Analysis Tool shows that Wuliangye (000858) good company rating is 4.5 stars, good price rating is 3 stars, and valuation comprehensive rating is 3.5 stars.