Event
In the first three quarters of 2017, the company achieved operating income of 559.7232 million yuan, an increase of 8.19% over the same period last year, a net profit of 34.2801 million yuan, an increase of 18.03% over the same period last year, and a net profit of 34.8596 million yuan, up 29.21% over the same period last year.
Brief comment
The channel is broadened, the promotion is increased, and the company's performance is steadily improved.
In the first three quarters of 2017, the company achieved an operating income of 559.7232 million yuan, an increase of 8.19% over the same period last year, and a net profit of 34.2801 million yuan, an increase of 18.03% over the same period last year. In the third quarter, the company achieved operating income of 165.2066 million yuan, an increase of 14.94% over the same period last year, and a net profit of 8.0106 million yuan, up 2.16% over the same period last year. Operating income in the first three quarters increased by 8.19% over the same period last year, mainly due to the expansion of sales channels and the increase in sales promotion. The reasons for the steady increase in the company's performance in the first three quarters are: 1. In terms of marketing, the company continues to innovate its marketing model and strive to develop new markets while ploughing the core market. Carry out marketing work around the policy of "flattening channels, fine group buying, extreme implementation, and vertical organization", unswervingly implement the boss project package promotion model, carry out the Dragon net project at the same time, and cultivate loyal core consumer groups. increase market share. two。 In terms of management mode, the company carries out various business work around the management model of "six strategies + management upgrading". Focus on management upgrading to further optimize the management system, strengthen internal control management, strengthen quality management, and constantly improve product quality.
As the cost increases, the cost decreases, and the net gross profit margin goes down and goes up.
In the first three quarters of 2017, the company's gross margin and net profit margin were 55.66% and 6.12%, respectively. Gross profit margin fell 2.92 percentage points year-on-year, while net profit margin rose 0.51 percentage points year-on-year. We believe that the decline in the company's gross profit margin is mainly due to the increase of promotional activities in order to broaden the sales channels. The company's revenue increased by 8.19% in the first three quarters, but operating costs increased by 15.82% compared with the same period last year, mainly due to the increase in operating revenue and part of the promotion fees processed through invoice discounts. At the same time, the company's low premium products account for a large proportion of sales, thus dragging down the company's gross profit margin performance. The increase in net interest rate is due to a reduction in sales expenses and administrative expenses. In the first three quarters, the sales expenses were 153.4842 million yuan, down 3.05% from the same period last year; and the administrative expenses were 31.4439 million yuan, down 5.7% from the same period last year. In addition, financial expenses were 22.0589 million yuan, up 1% from the same period last year.
A non-public offering is just around the corner, and the layout of high-end performance is expected.
On August 28, 2017, the China Securities Regulatory Commission approved the company's non-public offering of shares, all of which will be used for the processing of 60,000 tons of high-quality grape wine in Australia. By the end of the reporting period, the company is still actively organizing and preparing for the implementation of this non-public offering. Through this non-disclosure, the company plans to use the world's leading brewing technology and modern wine-making equipment to build a production base of 60,000 tons of high-quality grape wine in Mildura, Victoria, Australia, to further expand the production scale of the company's high-quality wine, meet the current needs of Chinese consumption upgrading and consumers' demand for high-quality wine, and enhance the company's core competitiveness.
Dealers hold shares to release sales vitality
The company has established a marketing network that covers the whole country with the combination of "dealer mode, plus merchant super, e-commerce, group purchase and other direct sales mode". At the same time, the company introduces excellent dealers through the non-public offering of shares, making the dealers become the indirect shareholders of Weilong shares, binding the long-term interests of both sides together, so as to further consolidate the long-term and stable cooperative relationship between the company and dealers. Through this way of binding interests, it will help the company to stabilize the existing sales channels, constantly release vitality, and improve the combat effectiveness of front-line sales personnel. While strengthening the market sales in East China such as Zhejiang and Jiangsu, we will continue to open up other regions such as Sichuan, Henan, Hunan and Chongqing to further increase the national coverage of the marketing network, so as to further increase the market share.
Profit forecast and valuation
The company's performance in the first three quarters of 2017 has improved steadily, and the main business indicators have maintained a good momentum of steady growth. The company holds shares through excellent dealers and establishes a long-term and stable cooperative relationship with dealers. With the further expansion and upgrading of the domestic wine market, product sales are expected to further improve, supporting the company's performance growth. We estimate that the EPS of the company from 2017 to 2019 is 0.36 yuan per share.
Risk Tips:
Food safety risk, market consumption is less than expected risk.