Incidents:
The company released its 2024 quarterly report. 2024Q1 achieved operating income of 45.776 billion yuan, an increase of 18.11% over the previous year, and net profit to mother of 24.065 billion yuan, an increase of 15.73% over the previous year.
The revenue growth rate exceeded the annual guide, and the cash repayment performance was outstanding
2024Q1's revenue increased 18.11% year on year, net profit to mother increased 15.73% year on year, and the total revenue growth rate exceeded the annual guide. 2024Q1 contract liabilities were 9.523 billion yuan, up 14.33% year on year, and 2024Q1 (operating income+delta contract liabilities) was 41.173 billion yuan, up 30.24% year on year. In 2024Q1, we collected 46.257 billion yuan, an increase of 29.34% over the previous year, with impressive cash payments.
Benefiting from price increases and wholesale channel sales, the growth of the wholesale channel has clearly accelerated by product. 2024Q1 Maotai liquor/series achieved revenue of 397.07/5.936 billion yuan respectively, up 17.75%/18.39% year on year, respectively, and the growth of series wine decelerated month-on-month. By channel, the 24Q1 direct sales/wholesale channels achieved revenue of 19.319/26.324 billion yuan respectively, up 8.49%/25.78% year on year. Among them, “i Maotai” achieved revenue of 5.343 billion yuan, an increase of 8.96% year on year. Direct sales of 2024Q1 accounted for 42.33% of revenue, down 3.64pct year over year. By region, 2024Q1 achieved revenue of 448.30/813 billion yuan respectively, with year-on-year increases of 17.73%/23.56% respectively. Since the beginning of the year, the number of dealers in China has increased by 17 to 2,097, and the number of foreign dealers has remained at 106.
Gross margin has been rising steadily. Looking at the increase in the operating tax rate, the 2024Q1 gross profit margin was 92.60%, up 0.23pct year on year, the net interest rate to mother was 53.66%, up 0.26% year on year, and the sales expense rate/management fee rate/tax and surcharges were 1.95%/5.19%/14.09%, respectively, +0.31/-1.41/+0.66pct year on year, respectively. We expect that the weak increase in gross margin is mainly related to changes in channel structure.
Profit Forecasts, Valuations, and Ratings
We expect the company's total revenue for 2024-2026 to be 1736.07/1970.91/221.305 billion yuan, a year-on-year growth rate of 15.31%/13.53%/12.29%, net profit to mother of 874.64/1002.97/1138.19 billion yuan respectively, a year-on-year growth rate of 17.03%/14.67%/13.48%, and EPS of 69.63/79.84/90.61 yuan/share respectively. Considering that the company is a leader in the liquor industry, the basic market is stable and the operation control is strong. Referring to comparable company valuations, the company was given 30 times PE in 2024, with a target price of 2088.9 yuan, maintaining a “buy” rating.
Risk warning: macroeconomic recovery falls short of expectations; industry competition intensifies; prices of Maotai liquor fluctuate sharply