Gujing Liquor (000596) Research Report: Post-Billions Era Resolutely Forces High-end Nationalization
Event: This week we participated in the study of the Gujing Shareholders’ Meeting. The company’s five-year strategy to rebuild the new Gujing focused on the market, the products were upgraded to the next high-end, and the market promoted nationalization to communicate.
We believe that after the Group completed the 10 billion target last year, it has a clear strategic plan for the follow-up dual-brand and double-ten billion, and is firmly committed to the next high-end, and strives to promote nationalization. At present, in terms of improving product structure and expanding markets outside the province, we see managementThe team’s long-term excellent response and strategic execution are the biggest guarantee. The company’s high-end nationalization has reached a new level, and it continues to look forward to further progress in the reform of state-owned enterprises and release business vitality.
The price of 200 yuan in the province has entered a golden development period, and product upgrades have been fully promoted.
At the beginning of the year, the consumption upgrade trend in Anhui Province did not change. The price of 200-300 yuan entered the golden development period, and the high-end price band of more than 300 yuan expanded significantly.
The company’s vintage puree series has been launched in 2009. In the past 10 years, it has gradually realized orderly card slots in different price bands. From the focus on the gift version and ancient 5 in the 杭州夜生活网 past, to the current focus on ancient 8 and ancient 16 to advance to the next high-end, productThe upgrade trend is obvious.
Judging from the competition pattern of Huijiu, the trend of brand differentiation continues to emerge. Gujing has become a leader in the province. A super-multi-strong pattern has been established. Brand awareness and channel penetration are in line with company expectations. In the future, the scale will increase and the structure will be more important.
The company has a clear idea of the major players in the province’s future market. One is to offer gifts and five-value-guaranteed price guarantees to stabilize intra-provincial price disks and channel interests. The second is to upgrade its structure. The ancient 8 and ancient 16 card slots have continued to increase.The Gu 20 has a strong layout after listing last year, and is not anxious to take action. It actively seizes the core sub-high-end consumer groups in the province. At present, the proportion of Gu 8 and above products accounts for 25%, and the future plan reaches 40%. Third, it focuses on some county-level and below channel markets.Actively recover.
The situation outside the province is positively changing, and the country is firmly promoted.
In summary of last year’s shareholder meeting, for the promotion of sub-high-end nationalization in general, it must be clear that long-term development must focus on sub-high-end, otherwise it will affect the overall strategy.
Regarding national development, although famous wine genes and brands are vigorously publicizing, the company also clearly realizes that the intensity of competition in the nationalization process is higher than that in the province, but it must continue to promote it. Second, the strengthening of hematopoietic functions in the province is more conducive to exporting outside the province.
The company actively adjusted in terms of organizational structure coordination and pre-investment of expenses in markets outside the province.
The Henan market has proposed rebuilding the Anhui market in the past, and encountered difficulties in structural adjustment. However, the market situation has gradually opened since last year. The products at the adjustment point have been actively upgraded, and the proportion of ancient 7 and 8 products has increased.
In the Hubei market, Huang Helou completed its performance commitment last year and proposed to strengthen the market foundation rather than short-term write-offs; the investment layout of Hebei and Shandong markets is in good condition.
The idea of rebuilding Xingujing in five years is clear, and steady growth is expected in the post-ten billion era.
After completing the Group’s 10 billion target, the company proposed to rebuild Xingujing in five years. The three major connotations include digitalization, internationalization and legalization of Xingujing.
Marketing channel management continued to strengthen cooperation with outstanding enterprises; green brewing intelligent manufacturing was proposed in production, focusing on product quality; brewing reserve was redistributed on the production capacity to redistribute the average distribution to ensure the supply of high-quality base wine; the cost was placed on a long-term perspective, and brand costs were fully integrated into marketing.
We believe that in the post-ten billion era, the company has a clear strategy of dual brands and double ten billion. The original pulp series will start ten years later. In the future, it plans to list individual brands, consider continuing to launch high-end or ultra-high-end products, and increase the value of old-fashioned original pulp brands.The optimistic performance continues to grow steadily. The driving factors come from: 1) the product structure upgrade drives the gross profit margin to increase; 2) the channel is intensively cultivated and the layout is stable, there is room for compression in the province’s cost rate, and the structural upgrade also brings the cost rate to be diluted;Concerned about the possible improvement of the mechanism, we continue to look forward to further development at the high-level of state-owned enterprise reform. Landing is expected to bring about improved operating vitality and positive release of performance.
Investment suggestion: The company adjusts its efforts and actively lays out high-end products. The product upgrade is one step forward. The market realization is being actively demonstrated. The province ‘s market has benefited from consumption upgrades and hematopoietic functions have been strengthened. The nationwide layout is rapidly advancing, and steady and long-term performance is expected.
We temporarily maintain EPS forecast for 2019-21 to 4.
83 yuan, corresponding PE is 24/19/16 times, maintaining a 12-month target price of 142 yuan, corresponding to 25 times PE for 20 years, maintaining a “strong push” rating.
Risk warning: macroeconomic downside risks; increased competition risks; demand is less than expected.