Introduction to this report:
Price increases for core products have been implemented, and the price increase idea is slightly steady. It is expected to drive repayments in the short term and to expect prices to rise in the long term. Sales performance during the Spring Festival period highlights strong brand strength. Currently, it corresponds to only 15XPE in 2024, and the valuation cost ratio is remarkable.
Key points of investment:
Maintain an increase in holdings rating. Price increases for major core single products have been implemented, and favorable repayments will continue in the short term. Long-term expectations are that the price system will be further straightened out, leading to a return in both price and value. Maintain the 2023-2025 EPS forecast values of 7.83, 8.73, and 9.74 yuan. Considering the overall decline in industry valuation, 22XPE will be given in 2024, and the target price will be lowered to 192 yuan (previous value 217).
Pu 5 raised the payment price and took the first step by taking the opportunity to raise the price. According to a report by Weijiu News, Wuliangye will raise the factory price of its core product, the eighth-generation Wuliangye, starting at 00:00 on February 5, from 969 yuan/bottle to 1,019 yuan/bottle, increasing the price by 50 yuan, or about 5.2%. As early as the end of 2023, at the 1218 conference, the company sent a positive signal, clearly stating that reasonable channel profit is the primary issue that needs to be solved now, and that in 2024, it will take the opportunity to moderately adjust the factory price of the 8th generation Wuliangye. The implementation of the current five price increases has taken the first step of choosing an opportunity to raise prices. The price increase is cautious and the pace of price increases is steady, leaving room and laying the foundation for whether to further optimize the price system in the future.
Short-term favorable payback, long-term expectations straightened out. In the short term, according to channel feedback, Wuliangye is currently progressing well. Nationwide, it is expected to have reached a level of around 40-50%. The window period before this price increase further raised the upper limit of Kickstarter's loan ratio. The repayment progress is expected to go further, and the leading brand effect is remarkable. In the long run, it is expected that after the price increase, the company will further coordinate the volume and price control system and strengthen channel control, and it is expected that the price will move upward.
The brand's ability is outstanding, and the valuation is cost-effective. During the good start of Yuanchun, the core product Wuliangye had a positive sales flow. At the same time, demand for Dragon Chinese Zodiac terminals was strong, channel momentum was strong, and product structure and channel structure optimization effects have already been achieved. Famous wines have a strong ability to cross the cycle, and their value corresponding to 2024 15X has been highlighted.
Risk warning: Large macroeconomic fluctuations, food safety risks, etc., and industry competition intensified.