Performance review
1Q22 performance is in line with our expectations
The company announced 1Q22 results: 1Q22 achieved revenue of 564 million yuan, an increase of 12.55% over the same period last year, and net profit of 69 million yuan, an increase of 12.36% over the same period last year, deducting 67 million yuan of non-parent net profit, an increase of 16.06% over the same period last year, which is in line with our expectations.
Trend of development
The effect of the company's price increase is beginning to show, and the structural upgrading is promoted rapidly. Under the influence of cost and labor pressure, Guyue Longshan raised the price of each product by 5-20%. The price increase effect began to show gradually in the fourth quarter of last year, and ASP rose 11.69% in 2021 compared with the same period last year. However, due to the rise in costs such as raw materials, driving up the cost of 1Q22, gross profit margin-1.13%. As the consumption scene of yellow rice wine has not fully recovered due to the disturbance of the epidemic, this performance still has a decline compared with 1Q19, with 1Q22 income / return net profit falling by 10.5% 1.97% compared with 1Q19.
The company's cost structure continues to be optimized, helping to improve the company's profitability. The company continues to optimize the cost structure, by combing and integrating enterprise resources and line management system, establishing a central wine warehouse management service center, promoting the warehouse "forward and backward" work and so on to continuously improve work efficiency and save costs. 1Q22 sales expense rate / management expense rate / financial expense rate compared with the same period last year-0.93/-0.08/-0.44ppt, improving expense management makes the net interest rate of homing home unchanged under cost pressure in the same period last year. The yellow rice wine industrial park with a total investment of 1.942 billion yuan is planned to be completed by the end of 2022. The new "digital intelligent park" will adopt advanced technologies such as intelligent control system, online dynamic monitoring system, automatic three-dimensional database, and so on. We believe that this may further reduce the cost.
Affected by the outbreak of the company's performance or under pressure. The main business scope of the company is located in Jiangsu, Zhejiang and Shanghai. In 2021, sales and revenue in Jiangsu, Zhejiang and Shanghai accounted for 69.3% and 63.3% respectively, of which Shanghai sales and revenue accounted for 22.08% and 23.27% of the company as a whole. Jiangsu, Zhejiang and Shanghai as a whole are greatly affected by the traffic control under the epidemic, the demand side or the impact caused by the epidemic, the company's main factories are located in Shaoxing, the supply side is relatively stable. After the epidemic, it may gradually return to normal business status.
Profit forecast and valuation
Taking into account the impact of the epidemic, we lowered the 2022 35.2/28.4X2022/2023 2023 profit forecast by 11.0% of the 2023 earnings forecast of 19.7% to 243,301 million yuan; the corresponding target price was reduced by 8.2% to 10.40 yuan, corresponding to the 2022max 2023 39.0/31.5XP/E. The current share price is traded in 35.2/28.4X2022/2023 PE, which has 10.8% upside compared to the current stock price, maintaining the neutral rating.
Risk.
The epidemic repeatedly affected the scene of alcohol consumption; other kinds of wine launched aggressively and continued to seize the market share of yellow rice wine; high-end competition intensified; food safety.
