Introduction to this report:

The company announced a share repurchase plan and plans to invest 3-6 billion yuan to repurchase and cancel. Following the previous 75% normalized dividend, the company once again gave back to investors, and at the same time determined the target of 15% total revenue growth for the whole year, demonstrating its leading role.

Key points of investment:

Investment advice: Maintain an increase in holdings rating. The company responds positively to the “National Nine Rules” and plans to invest another 3-6 billion yuan to repurchase and cancel after the next 3 years with a dividend rate of no less than 75% to protect market confidence. Maintain the 2024-26 EPS of 68.41 yuan, 78.82 yuan, and 90.11 yuan. Referring to the valuation of comparable companies, considering that the company has strong operational resilience and sufficient growth tools as a liquor leader, it will be given 33X PE for 24 years, and maintain the target price of 2240.12 yuan.

The company plans to invest 3-6 billion yuan to repurchase and cancel, boosting market confidence. On September 20, the company announced a share repurchase plan. It plans to invest 3-6 billion yuan to repurchase and cancel shares. The maximum repurchase price is 1795.78 yuan/share (42% premium compared to the closing price on September 20). Using the upper limit of the repurchase price, the corresponding repurchase price is 1.67-3.34 million shares, accounting for 0.13% to 0.27% of the total share capital. This is the first time since Maotai went public in 2001 that it has implemented cancellation and repurchase, which has strongly strengthened market value management.

Responding positively to the “National Nine Rules”, it was previously proposed that the dividend rate for the next 3 years should not be less than 75%, demonstrating the leading role. The company attaches great importance to shareholder returns. Previously, it issued a cash dividend return plan in August to promote the normalization of special dividends. It plans to pay cash dividends twice a year in 2024-26, with a dividend rate of not less than 75%. It is expected that the second dividend will be distributed within 24 years, and shareholder returns exceed market expectations. Since 24Q2, the performance of the liquor sector has been weak. The normalization of Maotai's special dividends combined with this repurchase and cancellation plan will help stabilize market sentiment. At the same time, the company, as a leader in liquor, is expected to have a demonstration effect in the industry, driving the sector's valuation return.

A number of measures have been taken to stabilize the price, and the target of 15% total revenue growth for the whole year has been determined. Over the past 24 years, the company has actively stabilized prices and responded to market changes in the face of a weak market environment. Major adjustments in flying prices around the Dragon Boat Festival have raised market concerns. The company flexibly adjusted its marketing strategy and promoted a recovery in price by adjusting the delivery structure on the product side and controlling the pace of volume on the channel side. After the Mid-Autumn Festival sales began in late August, Feitian's wholesale prices fluctuated again. As of September 20, the batch prices of Hakomao and Sanmao were reported at 2,470 yuan and 2,360 yuan (Bai Rong wine price) respectively. Due to reduced supply, the price of Sanmao is relatively stable, which is expected to support the wholesale price of Boxmao, and channel inventory is relatively benign. At the 24-year annual results briefing, Chairman Zhang proposed that the target of 15% increase in total revenue will be achieved as scheduled. The 24H1 company's total revenue growth rate exceeds 17%, so the target for the whole year is safe.

Risk warning: sharp price correction, slower than expected recovery in demand, large outflows of foreign capital, etc.