Wuliangye (000858) Commentary Report: Steady Development

Wuliangye (000858) Commentary Report: Steady Development

First, the event overview We recently participated in the Wuliangye 1218 Dealer Conference.

Second, analysis and judgment. In the first year of 2019: Driven by the four forces of brand / product / channel / execution, the company successfully completed the goal of “the company’s revenue exceeded 50 billion and the group’s revenue exceeded 100 billion” in 19 years. It is Wuliangye Group’s second venture.In the crucial year of sprinting 100 billion yuan, the company focused on the enhancement of brand / product / channel / executive power: (1) further improvement of brand power: thanks to the company’s 19 years of “strengthening cultural construction and increasing brand 佛山桑拿网 promotion (title) Major conferences, programs), Accelerating IP building “strategy, the company’s brand value has been further improved in 19 years, ranking 40th among the top 500 Asian brands, 8 positions, and a significant increase of 24 among the top 500 global brandsRanked 302th, ranking first in the food and beverage industry; (2) Product power has been further improved: Benefiting from Wuliangye’s upgrade (eighth-generation packaging, taste, quality improvement) + series wine structure optimization (“4 + 4”), The company’s product strength has been further improved, the company’s gross profit margin reached 73 in 19Q1-3.

81%, ten years +0.

37ppt; (3) Channel power is further enhanced: Integrate the company’s active and improved traditional channels, while expanding new channels such as e-commerce / group buying, while replacing it is committed to standardizing market order and resolutely cracking down on channeling and disorderly behavior.(4) Further improvement in execution: Driven by digital transformation, the company’s internal organizational execution, team operations and market response have been improved in 19 years.

Due to this, in 19 years, the company successfully completed the goal of “the company’s revenue exceeded 50 billion, and the group company’s revenue exceeded 100 billion”, of which Wuliangye’s total sales exceeded 2.

3In the early stage, maintain a good trend of rising volume and price.

Looking forward to 2020: the main melody of steady progress, the main direction of brand / channel / digital reform, optimistic about the flexibility of the company’s performanceFocus on the three aspects of brand / channel / digital reform: (1) Brand perspective: To sum up, product / marketing reforms are carried out simultaneously, optimistic about the continuous improvement of brand power: a.

Product side: The product structure is further optimized, and the main product “1 + 3” and series products “4 + 4” product matrices are set up. The low-value-added sub-brands are cleared, which is conducive to the strengthening of brand power and the improvement of profitability;

Marketing side: Air / ground expenses are put together, and the brand power is continuously upgraded, which is conducive to seizing the minds of high-end liquor consumers.

Since Wuliangye newly took office, Wuliangye has begun to strengthen its understanding of marketing and change the transformation of time. We are optimistic that continuous investment will gradually widen the gap between Wuliangye and Moutai in consumer mentality and widen its own brand barriers, thereby ensuring thatThe increase in sales volume also promotes the improvement of bargaining power; (2) Channel perspective: continue to promote channel integration, establish 21 theaters, 60 sales bases, and expand the sales team at the same time, which is conducive to the company’s continuous enhancement of the direct terminalControl and achieve in-depth distribution; and continue to promote “divided control and profit control”, the secondary distribution of dealers’ interests can effectively balance the interests of dealers; (3) digital reform: digital reform is still Wuliangye next yearFocus of work, the company and IBM, Ali, Jingdong and other high-tech companies continue to promote a comprehensive digital reform from the inside out, which will help improve internal work efficiency, improve quality and efficiency; replacement will help keep close to the end consumer and achieveTargeted to improve the effectiveness of marketing activities.

According to the company’s plan, the joint-stock company will maintain a double-digit increase in revenue in 2020, of which Wuliangye will increase its input by about 5% -8%.

With the liquor industry still in the context of structural prosperity, given the company’s concerted efforts in brand / channel / digital reform, we judge that the company is likely to achieve the above goals.

III. Investment proposal: The company is expected to realize an operating income of US $ 50/590/69 billion in 19-21 years, +25% / + 18% / + 17% in ten years; and a net profit of US $ 17/202 / 23.8 billion for one year.+27% / + 19% / + 18%, corresponding to an EPS of 4.



13 yuan, the current corresponding PE is 30/25/21 times.

At present, the company’s estimate is in line with the overall estimate of the liquor industry. Considering the company’s future business growth, it maintains a “recommended” rating.

4. Risk warning: macroeconomic fluctuations affect demand for high-end liquor, the approval price of Moutai has fallen sharply, food safety risks, etc.