Fangzheng Securities released a research report saying that maintaining the “Highly Recommended” rating of Zhenjiu Li Du (06979), demand for soy wine gradually picked up during the Spring Festival season. Terminal flow rate and consumer demand driven by returning home were all reflected. According to the bank's channel research feedback during the Spring Festival, Zhenjiu's repayment schedule and terminal sales all performed better than similar soy wine brands. Dealers have generally completed repayments of about 30%. In terms of sales, the outstanding performance of Zhen15 single products is expected to increase significantly. recovery. The bank expects the company's overall annual revenue to reach 8.4 billion yuan (year-on-year growth rate of about 20%) and non-Gaap net profit to reach 2 billion yuan (year-on-year growth rate of about 25% +). There is still plenty of room for full-year sales after a successful start exceeding expectations.
Fangzheng Securities's views are as follows:
Successful repayments have basically been completed. The peak sales season for the Spring Festival is expected to increase by 30-40%, and terminal sales performance is excellent.
Demand for soy wine gradually picked up during the peak season of traditional sales during the Spring Festival. According to the bank's channel survey feedback during the Spring Festival, the payment schedule and terminal sales all performed better than similar soy sauce brands. Dealers have generally completed about 30% of repayments. In terms of sales, the performance of Zhen15 single products was outstanding, and there was a marked increase. Prices stabilized at around 340 yuan and are expected to pick up after the holiday season. During the Spring Festival, the shipping speed of dealers was basically in line with repayment. The performance of products in the middle and low price segment driven by homecoming consumption was also excellent. Inventory dropped slightly compared to before the holiday season, and terminal inventory stabilized around February-March. Compared with the lack of a 23Q1 consumption scenario, the performance of the Spring Festival sales season in '24 exceeded expectations. The terminal opening rate reached 50% during the good start period, a significant increase over last year's Mid-Autumn Festival National Day peak season. The overall sales volume is expected to increase by 30-40%, highlighting the release of brand potential.
Strong energy during the Spring Festival sales season lays the foundation for annual performance, and Zhenjiu, which has refined channel operations, strong strategic strength, and strong production capacity reserves, is expected to achieve another excellent result.
According to dealer research feedback, on the basis of achieving the 2023 annual target, liquor dealers in many places generally have a 20-30% increase in sales targets for the full year of 24. The bank expects the company's overall annual revenue to reach 8.4 billion yuan (year-on-year growth rate of about 20%), and non-Gaap net profit is expected to reach 2 billion yuan (year-on-year growth rate of about 25% +). There is still plenty of room for full-year sales after a successful start and completion. In 2024, the company will continue to push forward marketing reforms. Zhen15's outstanding performance during the Spring Festival highlights the power of the Zhenjiu brand and consumer recognition, while Zhen30 promotes the expansion of distribution channels under the principle of stabilizing the price market. The results are expected to be more clearly reflected in the second half of the year. At the same time, Zhenjiu high-end light bottle 2013 real vintage wine promotion went smoothly. The high-end series is expected to continue to contribute more, and the share of sub-high-end and high-end is expected to continue to increase. As the second growth curve, Li Du tried to broaden the product matrix to the sub-high-end and mid-tier price bands, awaiting continued feedback from the market. Xiangjiao and Kaikujiao are regional brands in the Hunan region. Xiangjiao closely focuses on consumption in the banquet market and lays out the popular price range. They are all expected to increase strongly under the influence of consumption returning to their hometowns during the Spring Festival, and continue to supplement the Group's sales potential.
Brand structural upgrade+refined channel operation+cost rate optimization support annual performance growth, and profit release has potential.
The company's four major brands provide a strong driving force for growth. Looking ahead to 24 years, the company's gross margin is expected to continue to rise due to cost optimization due to product structure upgrades and a reduction in the proportion of outsourced base wine. At the same time, the overall rate rate is expected to decline moderately without a significant increase in the number of cost-side sales team personnel. Under comprehensive considerations, profit growth is expected to be higher than revenue, and the results of solid operation under continuous consumer cultivation, continuation of sauce transfer trends, and brand leadership concentration are showing.
Profit forecast: The bank expects the company's 2023-2025 revenue to be 70.4/84.3/10.04 billion yuan, respectively, up 20.2%/19.7%/19.1% year on year; the adjusted net profit for 2023-2025 is 16.0/ 20.0/ 2.53 billion yuan, respectively, up 33.2%/25.6%/26.2% year on year.
Risk warning: terminal inventory digestion falls short of expectations; consumer consumption recovery falls short of expectations; increased industry competition; macroeconomic downturn risks, etc.