Regional leading brand, strong ability to work under pressure
The company's comprehensive index ranks among the top three in the national wine industry, mainly including three series of products: traditional wine, organic wine and grape liquor, of which organic wine accounts for 39% in 15 years. The performance recovered significantly in the past 15 years, with the main business income of 724 million, an increase of 2.64%, and a net profit of 42 million, an increase of 18.47%. The company ploughs East China, and the proportion of sales continues to be more than 70%. The company is a private enterprise, and the personal interests of managers and employees tend to be consistent with the overall interests of the company, which is conducive to the long-term development of the company.
The organic wine market has great growth potential, and Veyron is expected to benefit.
China's organic wine market segment is in the rising stage, with rapid sales growth, with a compound growth rate of 66.59% in 2009-12. With reference to the 15% consumption growth rate in Europe, sales are expected to maintain a high growth rate of 30% in the future. At present, the scale of consumption in China is relatively small, and compared with about 30% of consumption in western countries, there is more room for growth. With the frequent food safety incidents, organic food is gradually valued by consumers, organic wine is expected to usher in new growth, Veyron as the market segment leader is expected to benefit.
Organic wine is in line with the upgrading of consumption and has great potential for regional expansion.
(1) the process of nationalization of the company has achieved initial results, with sales revenue in the north, south and northwest regions increasing by 9%, 17% and 63% respectively in the past 15 years. The company will continue to develop a blank market in the future, and its performance is expected to recover. (2) Organic wine has become the company's leading product, and its market share ranks first in the market, far exceeding the second place. However, as the price of organic wine priced at 150-300 yuan is slightly higher than that of Cabernet (80 yuan), sales fluctuate greatly during the industry adjustment. However, we believe that organic wine is in line with the trend of consumption upgrading, and sales are expected to further improve and promote performance growth with the expansion of marketing and channels in the future. This time, it is proposed to issue no more than 50.2 million common shares and invest 18000 mu of organic wine grape planting project + 40, 000 tons of organic wine production project + marketing network construction, so as to accumulate strength for the development of organic wine in the later stage, and the remaining funds will be used to repay bank loans. it is expected to greatly reduce the company's financial expenses and bring greater flexibility to the net profit.
Investment suggestion
It is expected that the company's net profit in 16-18 will grow by 63% 32%, 13% and 16-18EPS0.34/0.45/0.51. Because of its high financial expenses in debt and a large decline in net profit, Weilong shares will gradually return to normal in 16 and 17 years after listing. According to Changyu's valuation, Weilong will be given 18 times PE in 17 years, and the company's target price is 8 yuan.
Risk hint
Economic growth has fallen sharply; organic wine is unsalable and overcapacity.