The sales performance was outstanding, and the price promotion action was firm
During the Spring Festival, the company's core product, Pu Wu, performed brilliantly. After the Spring Festival, sales returned to a normal level. The company made firm moves to control prices (strengthening marketing efforts and strictly controlling dealers). Currently, overall inventory is good. Dealers in many places have reported a steady recovery in the batch price of the Eighth Generation Pu 5. Over the past 24 years, the company has actively optimized the pace of operation, continued to focus on improving brand value, taking multiple measures, making firm moves to raise prices, and restore channel confidence. From a medium- to long-term perspective, the company has a clear strategic plan and strong determination. It is expected that the future will continue to focus on price promotion and brand building. The product matrix is expected to continue to improve. Classic Wuliangye shapes a sense of value and complements the wine series. We expect the company's 23-25 EPS to be 7.81/8.77/9.82 yuan, respectively. Referring to the company's 24-year PE average value of 21x (Wind agreed), considering the company's strong brand strength, the company was given 23x PE in 24 years, with a target price of 201.71 yuan to maintain the “purchase”.
The Eighth Generation Five followed the trend and raised prices, and the price increase operation had remarkable results
Currently, the liquor industry has entered a normal low season of operation, and the company is focusing on price management. On the one hand, according to Weijiu reports, the factory price of the company's core single product, Eighth Generation Wuliangye, was raised from 969 yuan to 1,019 yuan, an increase of 50 yuan/bottle, which will be implemented on February 5. On the other hand, the company is rationally shrinking, and the Eighth Generation Wuliangye's traditional channel plans to be reduced by 20% throughout the year and increased to new channels such as group buying and direct sales, specialty stores, new retail, and overseas channels (according to the Wuliangye 1218 Dealer Conference, the company currently has 1,700 specialty stores, with sales of about 17 billion yuan) to optimize the channel structure. Currently, the overall inventory of Eighth Generation Wuliangye is good, and the wholesale price has been rising steadily after the holiday season. Dealers in many places have reported that the price can be expected to stand at 970 yuan, and the price lift action has been very effective.
The product matrix continues to improve to promote the continuous improvement of brand value
Looking ahead, the company's product matrix with various price bands is expected to continue to improve. Among them, 1618 is positioned at 900-1,000 yuan; Eighth Generation Wuliangye is positioned at more than 1,000 yuan; Classic Wuliangye is positioned at around 1,500 yuan (in the future, a platform company will be re-established to promote flat and short chain operation in an orderly manner, and the product matrix and value chain will also be reorganized to launch three classic 10/30/50 products); classic 10/30/50 positions the high-end price band. In the future, the company will focus on increasing its market share above 2,000 yuan and forge ahead courageously. In addition, the company's aromatic wine series sold smoothly during the Spring Festival this year, and the opening performance was outstanding. In 24 years, the company will continue to focus on improving brand value, restoring channel confidence, and safeguarding channel profits and confidence.
Optimistic about the company's long-term steady growth and maintaining a “buy” rating
Looking at the long-term strength of the Wuliangye brand, the core demand is stable. It is expected that it will continue to achieve steady double-digit growth in the coming year, and the dividend ratio is also expected to increase. I am optimistic that the company's brand value will steadily increase. We maintain our profit forecast. We expect EPS to be 7.81/8.77/9.82 yuan in 23-25, and the target price is 201.71 yuan (previous value of 184.17 yuan. The increase in target price is mainly due to a rise in the average PE value of comparable companies, maintaining the premium margin), and “buying”.
Risk warning: fluctuating raw material prices, lower-than-expected macroeconomic performance, food safety issues.