Wuliangye (000858) 2019 Interim Report Performance Preview Comment: Reform Dividend Release Continues High Growth Trend
The company expects revenue / net profit to increase by 27% / 31% in 2019H1, which is in line with market expectations.
In 2019, the company has comprehensively promoted reforms. At present, it is progressing smoothly. It is expected that the company’s channel profit will improve and release the growth potential, and maintain the “Buy” rating.
Expected 2019H1 revenue / net profit to increase by 26.
5% / 31.
About 0%, in line with market expectations.
The company expects to achieve revenue of 271 in 2019H1.
About 500 million, an increase of 26.
5%, net profit attributable to mothers is 9.3 billion, an increase of 31%, and revenue is expected to reach 95 in the second quarter of 2019.
About 600 million yuan, an increase of 27%, net profit attributable to the mother 28.
About 3 billion, an increase of 32%, in line with market expectations.
Volume and price analysis: 2019H1 general five volume, the eighth generation and collector’s edition listing drive the average price increase.
The revenue of H1 in 2019 increased by about 27%, mainly due to the volume of Wuliangye products. The specific breakdown of volume and price: ① sales, expected to exceed 1 delivery.
5 seconds, the same increase of nearly 20%; ② average price, collector’s edition issued over 1300 tons, ex-factory price of 859 yuan, an increase of 9%; June implementation of the eighth generation Wuliangye plan, ex-factory price of 889 yuan, an increase of 13%It is expected that the price increase will 武汉夜生活网 drive the average price up by single digits.
As for the series of wines, the company cleaned up a number of high-imitation products including PTVIP in April, and integrated a new series of wine companies in June to co-ordinate the management of the company’s series of wine brands and focus on resources. It is expected to break through and reduce the series of wine revenue in the future.
Future Prospects: The reforms in 2019 have been continuously verified successfully, and we expect that the improvement of channel profits will release the company’s growth potential.
We believe that this round of Wuliangye reform is successful for the following reasons, ① unless its brand foundation: Wuliangye is the first strong fragrance brand in China, so that its brand will help the company to raise the price and ensure the smooth 武汉夜生活网 progress of the reform; ② a comprehensive and stable change:The reform path is clear. The brand and channel reform have been gradually improved year-to-date. On the brand side, the series of liquor brands have been cleaned up. The eight-generation Wuliangye and ultra-high-end 501 new products have been introduced to help the return of brand value. On the channel side, a digital marketing system has been introduced.Take control and severely punish illegal dealers; ③ Better external environment: Moutai has less volume and higher approval prices.
Looking into the second half of the year, price is the core of the company’s work. The company strictly controls the pace of delivery. At present, the 7th generation has stopped channel supply. The 8th generation has been paid monthly, and the approval price has been increased to 950-960 yuan. The channel inventory will be maintained for about 1 month.
At the same time, the company strengthened its channel management and control through digital systems, severely cracked down on low-price string goods, and increased the number of illegal dealers by 20 in July.
The company plans to adjust the channel pricing to 959 yuan, to 1006 yuan, and the terminal guidance price to 1,399 yuan starting from August 10th. Under the strict volume control and channel price control, combined with the return of the company’s brand value, the company is expected toIt will achieve a very positive target with a high probability, and it is expected that the improvement of the company’s channel profit will bring about the release of the company’s growth potential.
Risk factors: The high-end wine boom is worse than expected, and industry competition is intensifying.
Investment suggestion: Maintain EPS forecast for 2019-2021 to 4.
80 yuan, the current price corresponding to PE is 27/23/20 times, maintain “Buy” rating.