Zhongtai Securities: Gives Gujing Tribute Wine a buy rating

2021-11-01Zhongtai Securities Co., Ltd. Fan Jinsong, Xiong Xinxin, Fang Zhaoqiang conducted a study on Gujing Tribute Wine and released a research report "Continuous Upgrade, Bright Return", this report gives a buy rating to Gujing Tribute Wine, and the current stock price is 234.1 yuan.

Gujing Tribute Wine (000596)

Investment essentials

Event: In the first three quarters of 2021, the company achieved revenue of 10.102 billion yuan, an increase of 25.19% year-on-year, and a net profit attributable to the mother of 1.969 billion yuan, an increase of 28.05% year-on-year.

The product structure continues to upgrade, and the payment performance is beautiful. The growth rate of revenue and net profit of 21Q3 was 21.37% and 15.09% respectively, and the revenue was in line with expectations, and the slower profit growth rate was mainly related to expense recognition. In terms of payment collection, the sales collection of 21Q3 was 3.843 billion yuan, +66.29% year-on-year, and the collection was significantly better than the revenue performance, mainly because the company's financial support for dealers in the form of acceptance bills in the same period last year caused a lower base, and also showed that the willingness of channels to pay was more active. According to channel feedback, Gujing Hefei Mid-Autumn Festival is expected to increase by about 10% year-on-year, of which gu 8 products grow faster, gu 16 and gu 20 are expected to continue to maintain high double-digit growth, driving the continuous improvement of product structure, it is expected that gu 8 and above products account for more than 40%.

The upward expense ratio led to a slight decline in profitability. 21Q3 company gross profit margin of 75.25%, year-on-year -0.27pct, gross profit margin is basically stable; 21Q3 period expense ratio of 35.32%, year-on-year +1.62pct, of which the sales expense ratio of 28.27%, year-on-year -1.10pct, mainly last year Q3 expense centralized delivery of the base is higher, management expense ratio of 9.46%, year-on-year +2.36pct, is expected to be related to the rhythm of expense recognition, financial expense ratio of -2.42%, year-on-year + 0.37pct。 21Q3 net interest margin was 19.64%, -0.99pct, while 21Q3 tax and surcharge ratio -1.16pct. 21Q3 The company's net cash flow from operating activities was 3.689 billion yuan, +1448% year-on-year, and the cash flow under the low base increased strongly.

The 14th Five-Year Plan strategy is clear, and we are fully committed to 20 billion. The company plans to target 20 billion yuan in revenue in 2024, and strategically positions itself as a nationalization + sub-high-end. In terms of products, the main push of the ancient 20, plus 3 or less of the mainstream single product combination, while the gift and the ancient 5 is still the basic disk; channels, in the past two years, adjust the organizational structure system, the establishment of 5 major war zones, 18 provincial-level regions, while the share of the province steadily increased, the province around the core area of active cultivation, such as Jiangsu, Hebei, Henan, Shandong and other places, the recent target of income inside and outside the province accounted for 6:4, the medium-term target of 5:5. We believe that the management has a strong entrepreneurial spirit, high market acumen and strong strategic planning capabilities, and is optimistic about the resilience of performance growth in the next 3-5 years.

Investment advice: Maintain a "Buy" rating. We expect the company's operating income from 2021 to 2023 to be 126/147/17.1 billion yuan, an increase of 22%/17%/16% year-on-year; net profit is 24/30/36 billion yuan, an increase of 30%/24%/21% year-on-year, corresponding to EPS of 4.79/5.95/7.19 yuan, corresponding to PE of 48/38/32 times.

Risk Warning: The risk of the continuous spread of the epidemic, the slowdown in the promotion process of new products, and food quality accidents.

A total of 29 institutions have given ratings in the last 90 days, with 25 buy ratings and 4 overweight ratings; the average target price of institutions in the past 90 days is 264.91; the Securities Star Valuation Analysis Tool shows that Gujing Gongjiu (000596) good company rating is 4 stars, good price rating is 2.5 stars, and valuation comprehensive rating is 3.5 stars.