Guosheng Securities: Gave Gujing Tribute Wine a buy rating with a target price of 270.0 yuan

2021-11-01 Guosheng Securities Co., Ltd. Fu Rong, Yang Chuanxin conducted a study on Gujing Gongjiu and released a research report "Gu8 and above is expected to increase high, contract liabilities have spare capacity", this report gives a buy rating to Gujing Gongjiu, believing that its target price is 270.00 yuan, the current stock price is 234.1 yuan, and the expected increase is 15.34%.

Gujing Tribute Wine (000596)

Event: The company released its third quarterly report for 2021. 2021Q1-3 The company achieved operating income of 10.102 billion yuan, a year-on-year increase of 25.2%, and a net profit attributable to the mother of 1.969 billion yuan, a year-on-year increase of 28.1%. Among them, the 2021Q3 company achieved revenue of 3.095 billion yuan, a year-on-year increase of 21.4%, and achieved a net profit attributable to the mother of 590 million yuan, a year-on-year increase of 15.1%. In addition, the company's Q3 sales collection was 3.843 billion yuan, an increase of 66.3%, and the net cash flow from operating activities was 3.689 billion yuan, compared with 238 million yuan in the same period last year. Contract liabilities increased by $579 million sequentially to $2,793 million.

Gu 8 and above achieved high growth, and gu 20 markets outside the province performed well. Combined with the grassroots research, we expect that the income of the ancient 5 and the gift version will increase slightly year-on-year, and the ancient 8 and above products will conform to the trend of consumption upgrading in the province and maintain a rapid growth rate, of which the income of the ancient 20 is expected to continue to increase at a high rate, and the market outside the province will perform brightly.

Fluctuating expense ratios drag down single-quarter profitability. The Company's 2021Q3 gross margin was 75.2%, down 0.3 pcts year-on-year, and we expect the decrease in gross margin to be primarily due to the offsetting revenue. 2021Q3 The company's sales expense ratio was 28.3%, down 1.1pcts year-on-year, and the management expense ratio was 8.2%, an increase of 2.3pcts year-on-year. Overall, the company's 2021Q1-3 net profit margin was 20.1%, up 1.1pcts year-on-year, and 2021Q3 net profit margin was 19.6%, down 1.0pcts year-on-year, and quarterly expense rate fluctuations dragged down profitability.

Ancient 20 provinces and outside the volume, the medium and long-term growth path is clear. Judging from the recent channel tracking, the company's ancient 8 and above products have been steadily increased, and the ancient 20 moving sales have maintained a high increase, which is expected to drive the performance to improve quarter by quarter. Jiangsu, Hebei, Hubei, Jiangxi and other markets outside the province have also risen rapidly and maintained a high-speed development momentum. In the medium and long term, the company's leading position in the province is stable, the hematopoietic function continues to strengthen, the product structure upgrade is actively promoted outside the province, the quality and breadth of investment promotion have been improved, and it is optimistic that the high-end product and the nationalization of the market will continue to drive the steady release of potential energy.

Earnings Forecast and Investment Advice: We have slightly adjusted the company's profit forecast to expect net profit for 2021-2023 to be 23.33/30.62/3.779 billion yuan (the original forecast value was 24.99/31.95/3.938 billion yuan), +25.8/31.3/23.4% year-on-year, corresponding to EPS of 4.41/5.53/6.82 yuan, corresponding to 52/41/33 times the price-earnings ratio for 2021-2023, respectively. Optimistic about the company's high-end products and medium- and long-term performance elastic release, maintain a target price of 270 yuan, corresponding to 48 times PE in 2022, maintain a "buy" rating.

Risk Warning: The competition in the province has intensified, and the promotion of high-end products has not been as expected.

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.