Shanxi Fenjiu (600809) 2019 Interim Report Review: Bfen Fen’s heavy volume growth accounted for more than half of the province
Matters: The company released its 2019 Interim Report, and the company’s 2019H1 revenue was 63.
7.7 billion, an increase of 22.
3%; net profit attributable to mother 11.
90 trillion, with an increase of 26.
19Q2 income 23.
20 trillion, an increase of 26.
3%, net profit 3.
1.3 billion, an increase of 38.
H1 performance was in line with expectations.
The company’s H1 final account receipt was 14.
8.1 billion yuan, an increase of 23.
1%, the off-season dealers are actively paying.
19H1 Net cash flow from operating activities16.
9.1 billion yuan, -2601 million yuan in the same period last year.
Bofen quickly increased the volume, accounting for more than half of the province.
As the Group’s series of wines were gradually integrated into the company’s body, product classifications were adjusted for disclosure, and Fenjiu’s revenue in the first half of the year56.
34 trillion, with an expected increase of 25-30%, and the income of blended wine2.
10,000 yuan, an increase of 33.
0%, series wine 4.
800 million, which is expected to remain flat, of which Fen is actively adjusting.
In terms of Fen liquor, it has further promoted the strategy of grasping the middle of the two belts. The blue and white series has held up high prices, strengthened price control and gradual system management, and maintained steady growth under last year’s high growth rate. Bfen adjusted its thinking and accelerated the expansion of terminal channels.Combining the number of terminals with regional control, it is required that the terminal market rate is 80%, and the volume growth in the first half of the year is expected to be 40% -50%.
By region, the province’s income was 31 in the first half of the year.
49 trillion, with an increase of 9.
7%; income outside the province 31.
67 trillion, an increase of 48.
8%, accounting for the first in the province, surpassing and increasing by 7.
Combined with grassroots channel research, the growth rates in East China, Inner Mongolia and Shaanxi are ahead, and the surrounding Shanxi market is expected to maintain a rapid growth rate of 30-40% and a more stable growth.
The gross profit margin increased significantly, and the cost recovery improved.
Company 19H1 gross profit margin 71.
5%, an increase of 2 per year.
2pcts, the gross margin increase is mainly due to: 1) At the same time, low base.
In early 18th, the Group’s personalized brand was incorporated into the joint-stock company in the form of the Fen brand, and its products were mainly based on low-end and mid-range wines, which lowered the gross profit margin performance of the same period last year.
2) The overall product structure is still improved, and the series of wine brands are actively sorting out.
Since the beginning of this year, the company has actively reduced the number of wine brands and carried out vigorous rectification. The brand model has been transformed into self-employed and customized, and the gross profit level is expected to improve significantly.
In terms of expenses, the sales expense ratio was 21 in 19H1.6%, the same increase of 3.
Advertising costs increased by 38.
3%, market development expenses increased by 188.
9%. In the first half of the year, the company increased the scale of the province’s external market expansion, the expected cost of the basic market and the expansion of the terminal increased. The goal of expanding the terminal was basically completed. After the nationwide layout was deepened, the cost increase was necessary.
19H1 excise tax pricing13.
5%, down by 2.
0, mainly because the company’s series of wines were actively adjusted, and the specific collection ratio of consumption tax production was reduced somewhat.
Company 19H1 net profit 19.
8%, 0 per year.
3pct, profitability remains stable.
Reform continued to deepen, focusing on new strategic positioning.
This year is the year of deepening the reform of the company and the year when the results of the reform come to fruition.
At the market level, the company reorganized the “1 + 3 + 3 + 13” market strategy, created according to market characteristics, and cultivated intensively. The domestic market maintained healthy development, and the market outside the province focused on breakthroughs.
At the product level, the company adheres to the development strategy of “grasping the middle of the two belts”, and implements a vertical management system for the entire series of product sales in the national market, focusing on the control of blue and white and Bfen series products. Based on this, it integrates the “one excellent and three strong” alcohol brands.A new mode of operation, accelerating the coordinated development of Fen liquor with bamboo leaf green liquor, Xinghuacun liquor, and Fen brand liquors, vigorously developing Fen brand slimming, strengthening marketing and brand strength, and actively controlling the scale of connected transactions.
In addition, the in-depth cooperation between the company and China Resources is being actively promoted. In terms of channels, they will actively cooperate with each other through existing products. We look forward to entering the substantive landing stage. With effective marketing coordination, channel empowerment will help promote the nationalization process outside the province.
Investment suggestion: The company enters the third year of national reform, H1 performance is in line with expectations, reform is still progressing, dual evaluation of national reform and fair incentives, and channel marketing cooperation with China Resources are gradually landing.While focusing on quality and consolidating the surrounding advantageous markets, we will increase investment in incremental markets such as East China. It is expected that the gradual performance will still achieve healthy growth.
We maintain our EPS forecast for 2019-2021 to 2.
08 yuan, corresponding PE is 33/27/23 times, raise the target price to 78.
3 yuan, corresponding to 30 times PE next year, maintaining the “strong push” level.
Risk Warning: Nationalization process is less than expected; competition is intensified; demand is less than expected.