Incident: On January 27, the company announced that it is expected to achieve operating income of 10-11 billion yuan, net profit to mother of -250 to 370 million yuan, and net profit of non-return to mother of 6.5 to 550 million yuan in 23.
Profits in the liquor business are stable, and the pork and real estate businesses are dragging down profit performance. Losses in '23 were mainly affected by real estate and pork businesses. Due to the cyclical impact of the pork and breeding industry, product sales prices are low and losses are large. At the same time, the real estate business also has an impact on profit statements. On December 8, 23, the company announced that in accordance with the agreement between the company and Shunzheng Asset to sign the “Property Transaction Contract”, the company has received the total transfer price of RMB 2.26 billion.
The registration procedure for the industrial and commercial change has been completed. 100% of Shunxin Jiayu's shares have been changed to Shunzheng Asset, and the company no longer holds shares in Shunxin Jiayu. The transfer of real estate subsidiaries generated non-recurring profits and losses of about 280 million yuan. We believe that the real estate divestment is in line with the company's long-term strategic plan and will enhance the company's value and enhance its profitability. The company's performance may be at its bottom in '23, and the recovery of the 24-year performance is more flexible.
Prices for major core products have been raised, and profitability is expected to improve. Earlier, the company announced a price increase for the core single product aging series. The 4 types of Niulanshan aged wine involved in the price increase were the company's core single products. The sales volume of 42°500ml and 52°500ml Niulanshan aged wine in '22 was 320,000 kiloliters and 12,000 kiloliters respectively, accounting for about 60.8% and 2.4% of the overall sales volume, respectively, and the price increase was about 6%. Price increases for core single products are expected to increase the gross margin and profit level of the liquor business.
Using the “Golden Standard Cow Fireworks Restaurant” to vividly create consumption scenarios, it helps to promote the brand. Over the past 23 years, the company has held the “Golden Standard Cow Fireworks Restaurant List” in many places, linking fine wine with food, which is conducive to raising awareness of the Golden Standard. The company sold about 690,000 boxes of gold in the first half of '23. As consumer education activities continue to be carried out, the self-promotion rate is expected to increase further.
Investment advice: Based on the performance forecast and adjusted profit forecast, the company's revenue for 23-25 is expected to be 10.6.0/114.7/12.81 billion yuan, with a year-on-year growth rate of -9.2%/8.2%/11.7%, net profit to mother of -3.1/5.3/980 million yuan, and a year-on-year growth rate of 53.9%/270.7%/85.9%, maintaining the “buy” rating.
Risk warning: New product promotion falls short of expected risk, White Bull 2 sales fall short of expected risk, post-epidemic recovery falls short of expected risk