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Shanxi Fenjiu (600809): Q3 results exceeded expectations and accelerated expansion of markets outside the province

Shanxi Fenjiu (600809): Q3 results exceeded expectations and accelerated expansion of markets outside the province

The company’s 19Q3 revenue and profit increased by 34.

5% / 53.

At 6%, the revenue accelerated month-on-month, and the performance exceeded market expectations.

In terms of products, in the third quarter, the blue-and-white series grew faster than the previous month, increasing by 30% +, Bolifen continued to maintain a high growth rate of 50% +, and Laobaifen maintained a steady growth rate of about 15%; by region, Q3 increased within and outside the province3.

1%, 140%, the market expansion outside the province accelerated. In the third quarter, 171 dealers were added. At the same time, the company strengthened the refinement of terminals and continuously improved the number and quality of terminals.

The company’s reforms continued to advance, dividends continued to be realized, and it gradually expanded beyond the quota to encourage growth.

Looking forward to the coming year, Fenjiu has enough brand power, and this round of expansion outside the province will enjoy the bonuses of distributors focusing on high-quality brands, and strive to maintain a steady growth rate in the coming year.

In view of the intensified competition, it is expected that the company can maintain a reasonable inventory level, and at the same time work more closely with China Resources, further internal reform, and can steadily advance in the depth of the market and strategic expansion.

Slightly raised 19-20 years EPS to 2.

25, 2.

64 yuan (previous time 2).

14, 2.

52 yuan), given 20 years of 35X PE, one-year target price of 92 yuan, maintaining “strongly recommended-A” rating.

Revenue and profit in the third quarter increased by 34.

5% / 53.

At 6%, the revenue accelerated month-on-month, and the performance exceeded market expectations.

The company’s revenue for the first three quarters of 19 was 91.

2.7 billion, previously +25.

72%, net profit attributable to mother 16.

9.6 billion, previously +33.

36%, including single-quarter revenue of 27 in the third quarter.

500 million, previously +34.

45%, net profit attributable to mother 5.

0.6 billion, previously +53.

At 62%, the revenue increased faster than the previous month, and the performance exceeded market expectations (and gradually adjusted income and profit).

The advance payment at the end of the third quarter of 1918.

400 million, previously + 134%, an increase of 3 from Q2.

600 million, 19Q3 sales recovery 29.

600 million, previously +52.

6%, beautiful performance, operating net cash flow2.

5.0 billion, down -43 every year.

7%, mainly due to the increase in Q3 purchases and employee wages.

Bolivia maintains high growth, and the growth rate of blue and white has increased month-on-month, driving high Q3 revenue growth.

According to grassroots analysis and feedback, in the third quarter Bophon continued to maintain a high growth of 50% +, Laobaifen maintained a solid growth rate of about 15%, and the blue and white series accelerated from the previous quarter, from 20% + in the first half to 30% + in the third quarter.(In the first half of the year, the growth rate of blue-and-white was slow due to the out-of-stock price in March-April, and the blue-and-white growth resumed in the third quarter).

The company’s strategy of “grasping the middle of the two belts” has worked well, the product echelon is clear, and high revenue is promoted.

The high profit of Bofen and the resumption of production after the rectification of the series of wines resulted in a decline in gross profit margin of Q3, and the sales expense ratio dropped significantly, pushing up the net profit margin.

The company’s gross profit margin for the first three quarters of 19 was 69.

19%, -0 per year.25pct, of which Q3 gross margin is 63.

93%, higher than -4.

94%, Q3 has two major reasons for the largest decrease in gross profit margin: first, low-end Bophon maintains high growth, faster than blue and white and Laobaifen; second, low-margin wines in the second quarter stopped production and consolidation, starting in the third quarterThe resumption of production and sales has lowered the overall gross profit margin to a certain extent.

The first three quarters of 19 sales expense ratio was 18.

18%, ten years +0.

24pct, of which Q3 sales expense rate is 10.

31% per year -7.

5pct, mainly due to the company’s different seasons in the pace of expense placement. In the first half of the year, the company expanded the market outside the province, transferred the basic market, and the expense ratio increased significantly.Maintained at a relatively stable level, 19Q3 management expense ratio (including research and development expenses) 7.

32%, ten years +0.

35pct, tax and surcharge 19%, ten years +1.

53 points.

Selling expense ratio dropped sharply, pushing up Q3 net profit margin by 1.

47% to 19.

87%.

Expansion of the market outside the province accelerated, and the province maintained a steady growth rate.

By region, in the first three quarters of 19, the revenue outside the province was 44.

8 billion, 45.

700 million, each year +7.

7%, + 68

4%, of which the growth rate in Q3 provinces and outside the provinces were 3.

1%, 140%, accelerated expansion outside the province, and the growth rate has increased significantly. The current proportion has exceeded half and has become the main force of growth. Q3 has continued to increase the number of alternative dealers outside the province.Among them, Q3 has a net increase of 171, which is basically a dealer outside the province. Reorganization. The company has continuously strengthened the refinement of terminals in the past two years. It will require dealers to increase the number of terminals and improve the quality (single store growth).Moving sales were better than expected, and inventory was slightly lower than the same period last year.

We look forward to the company’s in-depth cooperation with China Resources to further advance the mixed reforms. The channels will continue to be cultivated to facilitate long-term development.

Fenjiu has continued to maintain a high growth rate, and some investors have expressed concern 合肥夜网 about the sustainability of the company’s growth in the coming year. We believe that Fenjiu has a national brand gene, and this round of expansion outside the province will enjoy the bonus of distributors focusing on high-quality brands.China Merchants Association is generally smooth, and it is expected to maintain steady growth in the coming year.

However, at the same time, the breakthrough of investment promotion is also a test of the company’s management capabilities, including a series of issues such as channel inventory and price stability. It is expected that the company can work more closely with China Resources, the mechanism is more market-oriented, and continuously improve its management capabilities.Expand more external dealers, and be able to continue to cultivate in the initial stage, strengthen terminal 北京夜生活网 construction, continue to cultivate consumers, continue to consolidate advantages in advantageous markets around Shanxi, expand and expand, expand markets in cities outside Shanxi, and promote consumption developmentFundamentally, to help the company’s future healthy and sustainable development.

The third-quarter performance exceeded expectations, slightly raised the forecasted earnings forecast, and maintained the “strongly recommended-A” rating.

The company’s reforms have continued to advance, the mechanism has become more market-oriented, and the Shanxi market outside the province has continued to exert its strength. We believe that the company is expected to achieve its goal of exceeding the distribution incentive growth.

Looking forward to the coming year, Fenjiu has enough brand power, and this round of expansion outside the province will enjoy the bonuses of distributors focusing on high-quality brands, and strive to maintain a steady growth rate in the coming year.

In view of the intensified competition, it is expected that the company can maintain a reasonable inventory level, and at the same time work more closely with China Resources, further internal reforms, and steadily advance in the depth of the market and strategic expansion.

Slightly raised 19-20 years EPS to 2.

25, 2.

64 yuan (previous time 2).

14, 2.

52 yuan), given 20 years of 35X PE, one-year target price of 92 yuan, maintaining “strongly recommended-A” rating.

Risk warning: Reforms fall short of expectations, fierce competition outside the province