I. Overview of events
On August 27, the semi-annual report of 2021 was released. During the reporting period, the company realized operating income of 579 million yuan, + 63.61% compared with the same period last year, and realized net profit of 75 million yuan, + 314.49% over the same period last year.
II. Analysis and judgment
Fundamental bottom reversal, market order repair, sales strategy combing clear 21H1 company achieved operating income of 579 million yuan, year-on-year + 63.61%, equivalent to 21Q2 revenue of 200 million yuan, + 32.34% year-on-year. At the end of the 21H1 period, the company's contract debt balance is 48.47 million yuan, year-on-year / month-on-month ratio + 0.99% / 122.5% respectively. It is expected that the company will still have room for revenue recognition rhythm. In terms of products, the company achieved alcohol income of 539 million yuan (year-on-year + 68.72%) and own-brand highland barley wine of 522 million yuan (year-on-year + 67.54%), of which medium and high-grade highland barley wine was 406 million yuan (year-on-year + 74.93%). Common highland barley wine 115 million yuan (year-on-year + 45.45%), low-alcohol highland barley wine 7 million yuan (year-on-year + 263.25%). The growth rate of medium and high-grade highland barley wine is higher than that of ordinary + low-alcohol highland barley wine, and the upgrading trend of product structure is significant.
The company has got off to a good start to sales this year, with revenue exceeding the 19H1 level (+ 6.92%) and fundamentals showing signs of reversal. Under the epidemic last year, it was difficult for the industry to sell, and the company increased the market cost, but it was negligent in the market order and maintenance of the price plate, which damaged the dealer's willingness to make money. Last year, Q4 began to strengthen product traceability and inspection efforts, strongly restore market order, dealer confidence can be repaired. At the same time, the company comprehensively combs its brands and products, optimizes the product structure, implements a quota system for the country of middle and high-end products, steadily increases the proportion of products worth more than 100 yuan and the average unit price of jin, and focuses on Qinggan core market to strengthen personnel and cost introduction. the morale of the marketing team has also been effectively boosted.
Profitability recovered obviously, and expenses were effectively diluted after revenue recovery. 21H1's gross profit margin was 63.35%, year-on-year-1.62ppt, but the net profit rate was 12.64%, a substantial increase in 23.90ppt compared with the same period last year, mainly due to a sharp decline in the expense rate during the period. The period expense rate of 21H1 company is 31.42%, compared with the same period of last year-28.18ppt. Among them, the sales expense rate is 19.31%, year-on-year-20.19ppt, which is the core factor for the decline of the expense rate during the overall period. Last year, due to the difficulties in mobile sales caused by the epidemic, the company significantly increased the market costs, but the failure to effectively follow up the relevant management actions led to damage to the price, which in turn affected dealers' confidence in money back, resulting in a significant decline in revenue and unable to effectively dilute the expense rate. The rate of management expenses (including the rate of R & D expenses) is 11.39%, which is-9.15ppt compared with the same period last year. The main reason is that the expense rate cannot be effectively diluted due to the sharp decline in the scale of income last year. The financial expense rate is 0.72%, which is + 1.16ppt compared with the same period last year, mainly due to the decrease in interest income and exchange earnings.
The fixed increase has been successfully completed, and the long-term competitiveness has been strengthened.
This month, the company announced the formal completion of the fixed increase, with a total of 22.563 million shares issued at a price of 18.26 yuan per share, raising 412 million yuan. The company's additional funds are intended to be used for 17300 tons of high-quality highland barley wine aging technical renovation project, marketing network construction project, highland barley wine research and development and testing center construction project, highland barley wine information construction project, highland barley planting base construction project and supplementary liquidity. This fund-raising investment project is in line with the company's management and development strategy and is closely carried out around the main business, which will help the company to further optimize the company's product structure, improve production and management efficiency, and carry forward the brand culture of highland barley wine. At the same time, through this non-public offering, the company's capital strength and asset scale will be enhanced, and its anti-risk ability will be enhanced, which will help to improve the company's comprehensive competitiveness and market position, and promote the company's long-term sustainable development.
III. Investment suggestions
It is estimated that the company will achieve operating income of 1.09 billion yuan / 1.315 billion yuan / 1.53 billion yuan from 2021 to 2023, which is + 42.70%, 20.64% and 16.35% respectively compared with the same period last year. The estimated net profit of returning to the mother is 122 million yuan / 160 million yuan / 198 million yuan, equivalent to 0.26 yuan / 0.34 yuan / 0.42 yuan in EPS, and PE is equivalent to 74X/57X/46X respectively. The company's current valuation is higher than the PE level of the spirits sector 46X (Wind consensus expectation, arithmetic average method), but given that the company's fundamentals have been reversed, it is covered for the first time with a "recommended" rating.
Fourth, risk tips:
The epidemic or economic downturn is a drag on demand, intensified competition within the province, less-than-expected development outside the province, food safety problems, and so on.
