Key points of investment:
Incident: The company released its quarterly report. 24Q1 achieved total revenue of 46.485 billion yuan, up 18.04% year on year, and net profit of 24.065 billion yuan, up 15.73% year on year. In our performance outlook, we forecast that the company's 24Q1 revenue will increase 16% year over year and net profit to mother will increase 17% year on year. The company's revenue performance is basically in line with expectations.
Investment rating and valuation: Maintaining profit forecasts, predicting net profit of $88.154 billion, $102.087 billion, and $114.05 billion for 2024-2026, up 18%, 16%, and 12% year-on-year, respectively. The PE corresponding to the current stock price is 24x, 21x, and 19x, respectively, maintaining the buying rating. We are optimistic that Maotai's core logic will remain the same: 1. Maotai's demand is resilient, the supply-side continues to be scarce, Maotai's supply-demand conflict has existed for a long time, the long-term trend of sharp rise in volume and price is strong, and it has the ability to grow steadily over a long period of time. 2. Maotai's brand barriers are very high. Strong brand barriers and rich channel profits have built a strong moat. 3. Maotai has an excellent business model, strong long-term profitability, high cash flow quality and ROE level, creating long-term sustainable returns. -? In 24Q1, Maotai's revenue increased by 17.75%, and the wholesale channel grew faster than the direct sales channel. 24Q1 Maotai's revenue was 39.707 billion yuan, up 17.75% year on year. The volume and price of Maotai liquor is expected to rise sharply in 24Q1. Among them, the increase in sales is mainly due to non-standard volume, and the price increase comes from direct price increases and structural improvements. The revenue of the 24Q1 series wine was 5.936 billion, up 18.39% year on year. The growth rate of the series wine was slightly faster than the growth rate of Maotai wine. 24Q1 direct channel revenue was 19.319 billion yuan, up 8.49% year on year, accounting for 42.33%, down 3.64 pct year on year. Among them, “i Maotai” achieved revenue of 5.343 billion yuan without tax from alcohol, an increase of 9% year on year. The 24Q1 wholesale channel's revenue was 26.324 billion, up 25.78% year on year. The wholesale channel grew faster than the direct channel.
At the end of the reporting period, there were 2,097 domestic dealers, an increase of 17 during the year, and 106 foreign dealers, which remained unchanged during the year. Looking ahead to the whole year, the company will guide revenue growth of about 15%. We expect Maotai to continue to achieve sharp increases in volume and price in '24, and that non-standard volumes will continue.
24Q1 net profit margin was 53.53%, down 1.13pct year on year. The decline in net interest rate was mainly due to an increase in tax rates and sales expenses. The 24Q1 gross profit margin was 92.73%, up 0.02 pct year on year; the tax rate was 15.49%, up 1.62 pct year on year. The tax rate fluctuation was mainly due to quarterly differences in operating pace; sales expenses rate 2.45%, up 0.53 pct year on year; management expenses (including R&D expenses) rate 4.5%, down 0.67 pct year on year. (The tax rate refers to the ratio of tax and surcharges to total operating income. The above profit margin and expense ratio calculations all use total operating income as the denominator.)
The 24Q1 sales products and services received 46.257 billion yuan in cash, an increase of 29.34% over the previous year. Cash flow grew faster than revenue, mainly due to changes in advance accounts. Advance accounts received at the end of 24Q1 were 10.669 billion, down 5.279 billion yuan from the previous month, and 9.31 billion yuan from the end of 23Q1, down 8.141 billion from the previous month.
The catalyst for stock price performance: factory price adjustments
Core hypothesis risk: the economic downturn affects the overall demand for high-end alcoholic beverages