Wuliangye (000858) 2019 First Quarterly Report Review: Achieving a good start as scheduled and expecting channel reform to release dividends
Core point of view The company deepens the reform in 2019 and realizes a clear path. At present, it is progressing smoothly. We look forward to channel management. We have 深圳桑拿网 successfully raised prices for new products, achieved high short-term performance and long-term continuous growth, and maintain a “buy” rating.
2019Q1 revenue / net profit increased by 26.
6% / 30.
3%, achieved the start as scheduled.
The company achieved operating income of 175 in Q1 2019.
900 million, an increase of 26.
6%, net profit attributable to mother 64.
800 million, an increase of 30.
2019Q1 gross profit margin is 75.
8%, the same increase of 2.
6Pcts, mainly due to product structure upgrade, higher-end Wuliangye revenue share increased; sales expense ratio 7.
2%, flat for one year, and management expense ratio of 4.
5%, the same increase of 0.
In summary, the company’s net interest rate in 2019Q1 was 36.
8%, with an increase of 1Pct.
The company has achieved a good start as scheduled, and it has a high degree of certainty in completing its 50 billion operating income target in 2019.
During the Spring Festival, the sales volume of the old Pu’er Fifth Five-Year Plan drove a rapid increase in revenue, and the volume control after the holiday helped the New Pu’er F five to raise prices.
In Q1 2019, the company realized revenue of 17.5 billion yuan, an increase of 27%.
According to grassroots analysis and feedback, during the Spring Festival, the company benefited from the company’s active channel strategy.
As of the end of March, the company has completed the reorganization of 56% of the seventh-generation Wuliangye and 9% of the collector’s edition. It is estimated that the sales volume of Puwu will increase by 20% -25% in the first quarter of 2019, driving rapid revenue growth.
After the Spring Festival, the company’s channel inventory is at a low level, and terminal demand is better than in previous years. In addition, the company’s control of the goods is quite pricey, and the approval price has increased significantly. The approval price in East China / Beijing is 870-890 yuan, and other regions are also around 850 yuan.
We believe that the current price of Wuliangye is smooth, and in the second half of the year, it is expected to successfully transition to the new Puwu under the background of tight continuity and digital management empowerment.
The channel reform is deepened in 2019, and the progress is in line with expectations. It is expected that the company’s channel profit will improve and release the growth potential.
In 2019, the company will launch an upgraded version of Puwu to raise the overall price, channel-side dating control disk distribution and digital system to enhance the control of the channel and improve the profitability of dealers. At present, the progress is in line with expectations, and channel confidence continues to increase.
In terms of series wines, adhere to the 4 + 4 brand strategy, retire high imitation products, and rectify Chinese imitation products. Since April, four high imitation brands including “VVV” and “Wuliang PTVIP” have been retired.
We believe that the brand advantage of Wuliangye is obvious, the reform is in the right direction, and the implementation is resolute. It will gradually solve the channel and price problems, and look forward to the improvement of dealer profit and optimization of channel management.
Risk factors: The high-end wine boom is worse than expected, and industry competition is intensifying.
Investment suggestions: The Spring Festival sales exceeded expectations, the recent approval price has continued to rise, the reform is progressing smoothly, and the company is optimistic about the high certainty and long-term growth potential of the company’s high performance in 2019.
Maintain EPS forecast for 2019-2021 to 4.
80 yuan, the current price corresponding to PE is 24/20/18 times, maintain “Buy” rating.