Updated : Mar 29, 2020 in sqjikhxh

State Laojiao (000568): Guojiao Engine Continues to Boost Brand Rejuvenation

State Laojiao (000568): Guojiao Engine Continues to Boost Brand Rejuvenation

The event company released the 2018 annual report and the 2019 first quarter report: it achieved revenue of 130 in 18 years.

5.5 billion (+25.

6%), net profit attributable to mother 34.

8.6 billion (+36.

27%).

4Q18 single-quarter revenue of 37.

9.3 billion (+21.

76%), net profit attributable to mother 7.

3.5 billion (+31.

05%).

19Q1 single season revenue 41.

6.9 billion yuan (+23.

72%), net profit attributable to mother 15.

1.5 billion (+43.

08%).

The company also announced a public issuance of corporate bond budgets, and plans to raise US $ 4 billion in funds for technical transformation projects in winery engineering and intelligent upgrade construction of information management systems.

Investment Highlights Achieve record highs in 18 years: revenue of 130 in 18 years.

5.5 billion (+25.

6%), net profit attributable to mother 34.

8.6 billion (+36.

27%), exceeding the annual target.

In terms of products, in 2018, the high / medium / low-end wines achieved revenues of 63.

78/36.

75/28.

07 million, +37 each year.

21% / 27.

83% / 8.

3%.

The strategic single product National Reserve 1573, as the core engine, continues to grow and maintains rapid growth. At present, the volume has exceeded the previous cycle high. Looking forward to 2019, it is expected that the national reserve sales caliber will exceed 10 billion, and it is expected to be benign when completed.

We believe that the company’s leaders have a clear judgment on the industry, a forward-looking strategic thinking, and have a wealth of operating experience in the market, grasp the industry’s potential, resolutely appreciate the brand, expand the market, stable structure, healthy behavior, and grasp the potential, will drive the company’s brand revival.

The company’s gross profit margin was 77 in 2018.

5% (+5.

6pct), by product, the gross profit margins of high / medium / low end wines are 91.

8% / 79.

7% / 42.

5%, mention 0 every year.

62 points / 7.

29pct / 21.96pct, price increase and fee reduction contributed to the improvement of gross profit margin.

The 18-year sales expense ratio was 26%, an increase of 2.

8pct is mainly used to enhance brand influence, advertising, and marketing promotion instead of upgrading 7.

600 million (+40.

5%), the company’s expansion of multiple brands in 2018 increased; 18 years of management expense ratio (including research and development) gradually increased to 0.

5pct to 6%, mainly due to the expansion of the company’s size, increased personnel, accrual of performance salaries and bonuses led to an increase of 96% in employee compensation; the increase in index income led to a decrease in financial expenses for 18 years.

10,000 yuan.

19Q1 has a healthy growth, and the price has continued in April. The price increase has driven the old warehouse’s 19Q1 gross profit margin for ten years.

49 points to 79.

2%, Q1 pin / tube expense ratio decreased by 1 respectively.

3/0.

3pct. In summary, the price increase and fee reduction drive the 19Q1 net profit margin to increase by 4.

3 points.

According to grassroots research, in order to stabilize the price, the company has ceased to sell goods in southwest, Ganqing, Hainan and other places since January 19.Mid- to high-end brands are stable in mid-price.

The company has 杭州桑拿网 outstanding performance in the benign gradient of channels, and channel prices are gradually smoothed out.

Shipments have resumed in February, and some markets are still delaying orders, reflecting the company’s determination to consolidate prices in accordance with market conditions.

In April, controlling the price of goods was still the main melody. The Guojiao 1573 batch price rebounded and the inventory was replaced. The company successively issued documents to announce the increase in the storage age of 90-year products and the special settlement price of special products; the special version 60 of the 19H1 plan has been gradually implemented in advanceEnd, on April 25, the company issued a document to temporarily suspend the receiving and shipping of the special song version 60.

The company’s price increase rhythm and Wuliang liquid auxiliary materials complement each other, and the brand image building expectations are consistent.

With the company’s positive price, the long-term performance is a deterministic alternative.

Technological transformation and expansion.

At the end of 18 years, the ending surplus of construction in progress increased by 14 compared with the beginning surplus.

33 trillion, an increase of 91.

At 45%, the technical transformation project of brewing engineering was advanced in an orderly manner, and the project expansion increased year by year.

The company announced that it intends to issue bonds of 40 million to raise funds. After deducting issuance expenses, it plans to invest 40.

7 trillion in the technical transformation of brewing engineering (second phase), 7.

2 trillion for intelligent upgrading of information systems, 3.

8 trillion in the Huanghua brewing base project.

The company started the technological transformation project in 16 years. The original planned 7.4 billion US dollars technological transformation project completed the first phase of the project in 2020 and the second phase in 2025. After production, the production capacity of the base includes high-quality base wine 10 replacement, koji medicine 10 precipitation, and wine storage 30 inchesof.

The first phase of the project raised about 33.

40,000 yuan, currently spending 23.

600 million, the first phase of the project is about 71%, optimistically, it is expected to be put into production in 19 years.

The second phase of fundraising is imminent, and the progress of the technological transformation project is in line with expectations as a whole, providing redundant back guarantee for the company’s capacity expansion.

Earnings forecast and investment grade: It is estimated that the revenue for 19-21 will be 161/188 / 21.1 billion, + 23/17/12% over the same period; the net profit attributable to mothers will be 45/54/63 billion, longer + 30/20 /16%; PE is 23/19 / 16X, maintain “Buy” rating.

Risk warning: Macroeconomic fluctuations, risk of falling demand for high-end wine.