[Securities Star Editor's Note] Wuliangye routinely holds a national dealer conference on December 18 every year, and holds an investor exchange meeting the day before. This event has become a prosperous era in the wine circle, attracting a large number of investors to participat

[Securities Star Editor's Note] Wuliangye routinely holds a national dealer conference on December 18 every year, and holds an investor exchange meeting the day before. This event has become a prosperous era in the wine circle, attracting a large number of investors to participate every year, and conducting a series of Sichuan wine surveys together with Luzhou Laojiao , Shuijingfang, etc., with Sichuan wine series, and the attention has been greatly increased. (The stock market is risky, so you should be cautious when investing. The individual stocks mentioned in the article are for reference only and do not make trading suggestions.)

Wine companies' price increase + Wuliangye 1218 Conference Liquor stocks are on the rise

The liquor market has recovered significantly since this year, and many wine companies have raised prices several times. In September, the ex-factory price of Wuliangye 52-degree crystal bottle was raised by 60 yuan to 739 yuan, a record high; the retail price of 52-degree Feitian Moutai has also returned to more than 1,000 yuan, while the market retail price in the first half of the year was generally around 800 yuan. In addition, wine companies such as Qingqing Barley Wine (002646), Shuijingfang (600779) have also announced prices to be raised recently.

It is worth noting that Wuliangye regularly holds a national dealer conference on December 18 every year and holds an investor exchange meeting the day before. This event has become a prosperous era in the wine circle, attracting a large number of investors to participate every year, and conducting a series of Sichuan wine surveys together with Luzhou Laojiao, Shuijingfang and others, with the attention greatly increased. In addition, on the evening of December 2, Wuliangye announced the plan to adjust the private placement of A-shares, with a scale of 480 million yuan and a reduction in institutional quotas, but not reducing the amount of employees and dealers' holdings; the adjustment of the company's private placement plan has been authorized by the company's shareholders' meeting and does not need to be submitted to the company's shareholders' meeting for deliberation separately, and does not affect the approval process and progress of the China Securities Regulatory Commission, and is still expected to pass the meeting at the end of the year; CITIC Securities believes that Wuliangye's country's revision of the private placement of the private placement is also expected to become a catalyst.

CITIC Securities believes that after December, the atmosphere of stocking during the Spring Festival is getting stronger, high-end wines have begun to increase in volume in an orderly manner, and a batch of prices are firm, and the tracking data can perform well; inflation expectations are high in Q1 2017, terminal and channel inventory replenishment demand is high, and the investment attributes of high-end wines are returned, which is expected to amplify demand; in addition, Wuliangye 1218 conference will attract widespread attention and research, catalyzing the market. Recommended Wuliangye with low valuation and catalyzed by national reform, with the best fundamentals, Kweichow Moutai , Luzhou Laojiao; with considerable growth rate, Gujing Gongjiu , Shuijingfang.

Guojin Securities stated that liquor recommendations still give priority to first-tier varieties with the best fundamentals and relatively reasonable valuations, and the recommendation order is Wuliangye, Luzhou Laojiao, and Kweichow Moutai; second- and third-tier varieties due to the deep decline in the previous period, it is recommended to pay attention to significant declines/an expectation of improvement/the part with reasonable valuation has bottom-up logic Yilite (PE in 22X in 2016, PE in 22X, 2017 is the first complete operation year for the new management, channel reform will be the company's inevitable choice for 2017), Kouzijiao (PE in 23X in 2016, benefiting from the upgrade of product structure in Anhui market).

Wuliangye: The prepayment increased significantly, and the increase in expenses caused a decline in profits in a quarter. Pay attention to the progress of additional issuance

Wuliangye 000858

Research institution: Shenwan Hongyuan Analyst: Lu Chang Date of Writing: 2016-11-02

Event: The company released its third quarter report for 2016, with operating income of 17.7 billion yuan, a year-on-year increase of 17%, and net profit of 5.1 billion yuan, a year-on-year increase of 11%, with EPS of 1.34 yuan; operating income of 4.4 billion yuan, a year-on-year increase of 13%, and net profit of 1.2 billion yuan, a year-on-year decrease of 7%, and EPS of 0.32 yuan.

Investment Rating and Valuation: We maintain our earnings forecast, predicting that EPS in 2016-18 will be 1.92, 2.

13, and 2.38 yuan, an increase of 18%, 11%, and 11% year-on-year, corresponding to PE in 2016-18, 18, 16 and 15 times, respectively, with a target price of 38 yuan, and maintaining the "buy" rating. The logic of our company is mainly: 1. The liquor industry has differentiated since this year, and the growth rate of high-end liquor famous liquors is relatively fast. With Moutai as the leader, it will drive the entire high-end liquor market to increase both volume and price, and Wuliangye's revenue and profit return to the growth channel; 2. After the implementation of the private placement, the existing mechanism will be effectively improved, which will help improve operating efficiency in the long run and profitability; 3. Wuliangye's valuation in 2017 was 16x, which is relatively low among liquor companies; 4. The company has a high dividend rate and maintains 50% all year round.

price increase has led to a significant increase in Q3 prepayments. The company's Q3 prepayment was 6.7 billion yuan, an increase of 2.3 billion yuan month-on-month, a significant increase from the previous month. We speculate that it is because the company announced on August 31 that the ex-factory price of Puwu has increased to 739 yuan/bottle from September 15, and the dealer's collection has increased significantly. It is estimated that the annual repayment task has been basically completed.The cash flow in the third quarter was strong, with cash generated from the sale of goods and provision of services increasing by 58% year-on-year, and the net operating cash flow increasing by 140% year-on-year. In September, the first batch price of Pu Wu also rose from around 650 yuan to 680 yuan, and after the Mid-Autumn Festival and National Day, the purchase cost of dealers also gradually increased to 679 yuan. It is expected that under the cost support and peak season, Wuliangye's wholesale price will continue to rise slightly under the control of goods by manufacturers.

sales expenses have caused profits to decline in the third quarter. The gross profit margin in Q3 was 70.5%, an increase of 3.2pct year-on-year, and the net profit margin was 28.6%, a decrease of 6pct year-on-year, mainly affected by the increase in sales expenses. The sales expenses in Q1-Q3 were 3 billion, an increase of 38% year-on-year. The sales expenses in the third quarter were 850 million, an increase of 144% year-on-year. There were more confirmed expenses in the third quarter. In terms of channels, the company-led Yaoshi Journey has been launched nationwide, and tasting meetings mainly composed of distributors in various places have also increased a lot. It can be seen that the company has adapted to industry trends and has increased Wuliangye's sales through multiple channels.

The company's employee stock ownership plan is being promoted in an orderly manner. We are optimistic about the shareholding plan for employees and dealers. In the future, the company's equity structure will be more reasonable. Management, employees and dealers will form a community of interests, which will help improve medium- and long-term operating efficiency and profitability.

Catalysts for stock price performance: price rise, and the approval of private placement core risk assumption: economic downturn affects high-end liquor

Luzhou Laojiao: Every callback is a buying opportunity

Luzhou Laojiao 000568

Research institution: Shenwan Hongyuan Analyst: Lu Chang Writing date: 2016-12-09

Investment points:

Event: Media reports, 1. Recently, Luzhou Laojiao Company has issued documents continuously, canceling the fees for its core products, Luzhou Laojiao Special Qu and a century-old Luzhou Laojiao Cellar Age of 30 years, and the market channel price has increased by 15%-20%; 2. Recently, Guojiao 1573 announced the list of group purchase customers, and the first batch of 18 group purchase customers, and hundreds of group purchase customers registered; 3. A century-old Luzhou Laojiao Cellar Age of 90 years has launched a partner selection plan.

Investment Rating and Valuation: Maintain profit forecast, predicting that the company's revenue will increase by 16%, 21% and 20% from 2016 to 2018, and its net profit will increase by 21%, 30% and 30%, respectively, with EPS of 1.27, 1.65 and 2.15 yuan respectively (if the additional issuance is considered dilution, the EPS will be 1.16, 1.5 and 1.96 yuan respectively), the target price is 41 yuan, and the buy rating is maintained. We believe that Laojiao is a company whose fundamentals have changed rapidly since the industry adjustment. The core logic of our optimism about the company is: 1. Have outstanding brand and product strength; 2. The group and joint-stock companies have clear positioning and division of labor, the new team is strong, outstanding in ability, efficient and diligent; 3. The problems of brand chaos, numerous barcodes, and unsalable product sales in the early stage have been solved one by one, the five single product strategies are clear, and the future growth path is clear; 4. The sustainability of revenue growth and the elasticity of net profit; 5. Maintain a stable dividend rate of more than 50% all year round.

increases the market performance price of mid-range products and conforms to the trend of industry consumption upgrading. With the recovery of liquor in this round, consumption upgrades are obvious. Special Qu keeps up with the trend of industry consumption upgrading to ensure that it has a relatively strong brand influence in the mid-range core consumer price zone. The annual sales task has been completed, control the volume and price, and maintain the benign channels. Cancelling the free gift fee with goods will directly reduce the company's sales expenses. We speculate that the dealer's special songs will be 148 yuan per piece. Cancelling this fee means that the market price of the special songs will increase by 148 yuan per piece, and each bottle will be about 24.6 yuan. Currently, the price of a batch of special music in the country is around 145 yuan/bottle. According to this calculation, the whole price of special music will rise to around 170 yuan in the future. The 30-year-old wine of cellar age is the same as the special qu operation method, and the purpose is similar.

Guojiao 1573 investment promotion is efficient, and group buying customers make up for the blank market. According to media reports, the Guojiao 1573 team announced the first batch of 18 group buying customers in just 8 days, which shows that its execution ability is very strong. At the same time, the dealers recruited are basically weak areas or even blank areas of Guojiao 1573, indicating that Guojiao 1573's current brand influence is rapidly increasing, forming a good reputation in the distributor circle of the liquor industry, and the product's money-making effect is obvious. Group buying customers are small and large in number, and their role in dissemination of brands is greater than their contribution to sales performance. It can be seen that the company's management has considered it for a long time in its market layout.

90 years old positioned as a sub-high-end elite business wine.We believe that with the arrival of consumption upgrades again, the opportunity for sub-high-end products in 2017 will be greater than in 2016. Now the price of high-end products is raised, and the price range of 300-500 yuan has once again room for operation. The channel adopts a price control model to ensure dealers' profits. We believe that Laojiao re-planned for 90 years this time, intending to build 90 years into a strategic product that can support Laojiao's sub-high-end.

Catalyst for stock price performance: fundamentals exceed expectations

Core assumption risk: Adjustment recovery is lower than expected, uncertainty of additional issuance

Shuijingfang: Revenue maintains rapid growth, product structure continues to upgrade

Shuijingfang 600779

Research institution: Changjiang Securities Analyst: Liu Yan Writing date: 2016-11-04

Event description

Shuijingfang (600779.SH) announced the third quarter report of 2016, the main contents are as follows: In the first three quarters of 2016, the company achieved operating income of 795 million yuan, a year-on-year increase of 28.38%, and net profit attributable to shareholders of 149 million yuan, a year-on-year increase of 110.6%; net profit attributable to shareholders of 18.77%, a year-on-year increase of 7.33 percentage points. Among them, in the third quarter, the operating income was RMB 302 million, an increase of 31.23% year-on-year, and the net profit attributable to shareholders was RMB 58 million, an increase of 181.33% year-on-year; the net profit attributable to shareholders was RMB 19.2%, an increase of 10.25 percentage points year-on-year.

Event Comments

Single-third quarter revenue continued to maintain rapid growth, and core single products continued to grow rapidly: We expect that benefiting from the demand in the peak Mid-Autumn Festival, the company's single-third quarter revenue continued to maintain a rapid growth trend, with operating income reaching 302 million yuan, a year-on-year increase of 31.23%. Among them, it is expected that the core fist products Zhenjiu No. 8 and Shuijingyitai Preparation will continue to grow rapidly, and the five core markets will maintain a good growth trend. It is expected that the revenue growth rate of the core market in the first three quarters will remain at around 30%, and will gradually expand to the nine core markets in the future. We expect the company to continue a good growth trend in the fourth quarter, and due to the advancement of the Spring Festival next year and some demand is ahead of schedule, sales in December will also increase year-on-year. The company received cash from selling goods and providing services in the first three quarters to 829 million yuan, an increase of 35.41% year-on-year.

The gross profit margin in the third quarter increased year-on-year, and the expense ratio decreased year-on-year: Benefiting from the upgrade of product structure (the proportion of mid-to-high-end products increased), the company's gross profit margin in the third quarter increased by 3.48pct year-on-year to 75.36%. We expect that as water well collections will gradually make efforts next year, the company's product structure is expected to be further upgraded, the brand image continues to improve, and there is still room for improvement in gross profit margin. At the same time, as the company's expense control efficiency continued to improve, the company's sales expense rate reached 24.65% in the third quarter, a year-on-year decrease of 4.9pct; the management expense rate reached 11.87%, a year-on-year decrease of 3.33pct.

This year, the company adjusted the organizational structure of the sales department, further strengthened regional control, and continuously optimized the channel management model in the future.

net profit in the third quarter increased significantly year-on-year, product upgrades and channel expansion promoted growth: Benefiting from the upgrade of product structure and the decline in expense ratio, the company's net profit attributable to shareholders in the first three quarters was 149 million yuan, an increase of 110.6% year-on-year; of which the company's net profit attributable to shareholders in the third quarter was 58 million yuan, a significant increase of 181.33% year-on-year, and the net profit attributable to shareholders reached 19.2%, and its profitability continued to improve.

We believe that with the continuous upgrading of the company's product structure and the continuous expansion of markets outside the province, the company's revenue will continue to maintain rapid growth. We expect the company's EPS from 2016 to 2018 to be 0.40 yuan, 0.55 yuan and 0.66 yuan respectively, and maintain the "buy" rating.

Risk warning: Industry competition intensifies; performance does not meet expectations.

Kweichow Moutai: The valuation still has obvious advantages, and the price increase conditions will gradually mature next year and the following year

Kweichow Moutai 600519

Event: Moutai's stock price hits a new high, with a market value of 410 billion yuan. In our report on October 11 this year, "Q4 will usher in catalysis, and real performance corresponds to valuation next year is only 16x, and reiterates the purchase", we clearly stated that 1. Looking at Moutai with real performance, Moutai's real performance corresponds to valuation only 16x in 17 years; 2. Moutai will lead the industry into a new round of price increase cycle. The logic is currently being verified by the market.

Investment Rating and Valuation: Maintain profit forecast, predicting that the EPS in 2016-18 will be 13.9, 15.9, and 17.9 yuan, an increase of 12%, 14%, and 13% year-on-year. The continuous increase in advance payments makes the income statement no longer reflect the real performance. By restoring the impact of prepayments, Moutai's real performance in 2017 is only 16x, with a target price of 400 yuan per year, and the buy rating is maintained.Firmly optimistic and continue to recommend the company: 1. Moutai has a strong brand power, which not only builds high barriers, but also forms the scarcity of products. After this round of industry adjustments, Moutai's position in the industry and consumers is irreplaceable; 2. The team is excellent. Since taking office at the end of last year, Li Baofang, the new Party Secretary and Acting General Manager of Moutai, has steadily increased its sales, significantly increased its prices, and significantly improved its base wine production. The series of wines has made rapid efforts, which has fully proved the team's ability to control the market; 3. Moutai will lead the industry into a new round of price increase cycle. In the past 10 years, Moutai has raised its price CAGR Nearly 10%; 4. After the price returns to rationality, it triggers mass consumption demand. Under the premise of reasonable price increase in the future, consumption upgrades will continue to bring new demand and sales volume will steadily grow; 5. Moutai is a company that truly controls pricing power in the entire liquor industry, and its growth, profitability, debt repayment ability, etc. are better than international spirits leaders, and the valuation should enjoy a premium.

is expected to complete the full-year plan in November, and the actual shipment volume in 2016 may exceed market expectations. According to recent channel research, dealers can implement the 2017 plan after late November, and the 2016 quota has been implemented one after another in November. Among them, October was basically in a state of control, and the volume of supply increased in November. The year-on-year increase in actual supply for the whole year should be close to 20%, exceeding our previous expectations. The price of a batch rose rapidly after the Mid-Autumn Festival and National Day, reaching 1,050 yuan across the country. With the increase in volume in November, the price has fallen. Currently, the prices across the country are stable at 1,000 yuan. At the same time, in December, dealers reported that the delivery pace in January slowed down and the payment pace in February-March next year slowed down, so a batch of prices has stabilized and is expected to rise steadily in December.

's real performance is significantly higher than the income statement, corresponding to the valuation next year, and the interim performance will be released at an accelerated pace. We once calculated the real performance in the October report. Simply put, it is to restore the current increment of prepayment to income, that is, real income = statement income + prepayment change/1.17. We expect that the EPS corresponding to the increment of prepayment in Moutai from 2016 to 2017 will be 3.4 and 4.5 yuan respectively. The real performance will correspond to the PE of 2016 to 2017, 19x and 16x respectively. The valuation is still very attractive.

Catalysts for stock price performance: a batch of prices rise, sales exceed expectations, state-owned enterprise reform l Core assumption risk: economic downturn affects the overall demand for high-end wine

Gujing Gongjiu: positive and positive, and make another effort next year

Gujing Gongjiu 000596

Research institution: CITIC Construction Investment Securities Analyst: Huang Fusheng, Cai Xueyu Date of Writing: 2016-11-17

Since our in-depth report "Internal Repair and Outer Purchase, Next Liquor Giant" recommended on October 10, the stock price has risen by 15%, and has reached our previous target price of 50 yuan. We insist on the unchanging Gujing recommendation logic and firmly optimistic that the company is the company with the largest revenue and profit margin among the top five liquors and the only company with doubled market value in three years. The company's endogenous growth, mergers and acquisitions of strong brands from other provinces will achieve revenue of 10 billion yuan in the year afterwards. The company's current net profit margin is less than 15%, and it is highly likely to mention it above 20% in the future. Relying solely on the growth of revenue and profits, the market value can reach 40 billion yuan in the next year. If the net profit margin increases greatly, it will exceed expectations.

Brief review

The annual plan is completed, and the purpose of stopping goods is to support the price before the peak season

The company completed the annual payment task as early as October. At that time, the channel had a certain inventory, but the grassroots understanding of the dealers are not worried about the future inventory digestion prospects. Recently, media reported that the company's notice of the suspension of the three products of the year's original pulp was issued as early as October 17 and recently emphasized again that the dealers who sold the tribute version in the province, the 5-year sales outside the province, and the 8-year sales nationwide were suspended in the fourth quarter. According to grassroots understanding, tribute dealers in Lu'an and other places in the province are still making payments and getting goods normally. We believe that the price-up behavior before the peak season is supported under the worry-free situation of the annual task, and the channel policy before the Mid-Autumn Festival is strong and the product wholesale price is slightly lower. Considering that the peak season of the Spring Festival this year is ahead of schedule, the corresponding stocking season will also be advanced. It is expected that the situation next year will be clear after the dealer conference at the end of this month and the shipment will resume according to market conditions.

The company's brand power continues to rise, and its product development performance is good

This year, it has achieved good results in developing products with this help and powerful distributors with channels. For example, the annual raw pulp extension products developed by Hebaichuan for the Shanghai market was 3, 6, and 9. The sales this year were 100 million yuan. The plan was completed in October, and it is expected to reach 130 million yuan for the whole year, and it plans to exceed 200 million yuan next year.

External acquisition will exceed expectations next year

After more than a quarter of integration, the Huanghelou acquired this year will reach 74 million in June alone. Even though considering the reshaping factors of the new dealer system and the pressure of no performance commitment this year and the focus is on adjustments, the company still has a year-on-year growth assessment target for Huanghelou's team. We expect the growth rate to be less than the 20-30% range of performance commitments in the next five years. The future performance commitment is quite conservative in any aspect, and it is a high probability event that exceeds expectations. In addition, the company is still actively engaged in external targets, and the acquisition of Huanghelou is just the beginning.

profit forecast and valuation.

We predict that the company's revenue from 2016 to 2018 will be RMB 6.409, RMB 7.690, and RMB 8.781 billion, respectively, and the net profit attributable to shareholders will be RMB 845, RMB 1.016, and RMB 1.149 billion, respectively, and the EPS will be RMB 1.68, RMB 2.02, and RMB 2.28 per share, respectively, and the increase rating will be given and the target price will be raised to RMB 55.