Event: Guizhou Moutai 2022H1 achieved operating income of 59.444 billion, year-on-year + 17.20%; return to the mother net profit of 29.794 billion, year-on-year + 20.85%. Among them, 2022Q2 realized operating income of 26.256 billion, + 15.89% compared with the same period last year, and home net profit of 12.549 billion, + 17.29% compared with the same period last year. Basically in line with market expectations.

The adjustment of product structure and the increase of direct operation proportion promote the rapid growth of income. Continue the trend of 2022Q1, increase the amount of non-standard wine and further increase the proportion of direct sales. Maotai has a good performance at the revenue end. 2022H1 Maotai achieved 49.965 billion yuan in revenue, compared with + 16.33% + 16.33% and + 14.97% in 2022Q2 Maotai. Maotai series liquor 2022H1 achieved business income of 7.59 billion yuan, year-on-year + 25.34% dome 2022Q2 realized business income of 4.17 billion, year-on-year + 22.02%, series wine rapid growth this year, mainly due to the company to strengthen the reform of the series of wine this year, further clean up the series of wine products, Maotai 1935 also showed a bright performance, at the same time, the company also adjusted the price of Maotai Prince Liquor and other products, new products + rapid growth brought about by reform. The proportion of direct operation continues to increase. The direct sales and distribution channel income of 2022Q2 was 100.62 and 15.213 billion yuan respectively, which was + 112.87% and-10.76% compared with the same period last year. The proportion of direct sales of 2022Q2 increased to 38.32%, an increase of 17.46% over the same period last year. The increase in the proportion of direct sales mainly comes from the contribution of the "I Maotai" platform. Since the launch of "I Maotai", the sales of the platform have been bright, and the platform achieved 4.42 billion yuan in alcohol revenue in the first half of this year.

The upgrading of product structure leads to the improvement of gross profit, and the pre-collection reservoir is deeper. Through the upgrading of product structure and the increase in the proportion of direct sales channels, 2022H1's gross profit margin was 92.11%, which was 0.73% higher than the same period last year. 2022Q2 company gross profit margin further increased to 91.8%, and 0.1pcts increased over the same period last year. The net interest rate of 2022H1 company was 53.99%, which was 51.95% higher than the same period last year, and decreased 0.46pcts compared with the same period last year, mainly due to the increase in business tax and additional share. At the end of the 2022Q2 period, the company's contract liabilities were 9.669 billion yuan, other current liabilities were 1.165 billion yuan, and contract liabilities + other current liabilities increased by 1.573 billion yuan month-on-month, and the pre-income reservoir was deeper. If the 2022Q2 real revenue calculated by the pre-income month-on-month change + sales revenue increased by 2.76%. 2022Q2 received 29.669 billion yuan in cash flow from goods sold, an increase of 6.08% over the same period last year, matching the actual growth rate of receivables.

The leading position of liquor has been continuously strengthened. In the long run, the trend of continuous expansion of high-end wine will not change, the company's position in the industry will continue to strengthen, and there is still room for high-end wine prices to continue to rise. The new chairman of the company, Ding Xiongjun, sends out positive reform signals, insists on high-quality and accelerated development, and is optimistic about the "I Maotai" at the channel end of the company.

The sustained and steady operation of the platform and the continuous optimization of direct marketing channels will judge the company's performance growth rate to a higher level this year.

Company profit forecast and investment rating: we believe that the company's reform dividend will continue to be released this year, and we are optimistic about the stability and growth ability of the full-year performance. We expect the company to achieve revenue growth of 17.02% in 2022, net profit growth of 20.1%, and EPS50.15 yuan. The current share price corresponds to 38 times the valuation. Combined with the historical valuation of Maotai and the expected acceleration of performance this year, we give it a target valuation of 45 times and a target price of 2507 yuan, maintaining the "highly recommended" rating.

Risk tips: the recovery of consumption is not as expected, the impact of the epidemic on consumption is greater than expected, and there are major management loopholes in the management of the company.