Jin Shiyuan (603369): Price increase highlights confidence and high momentum continues to be strongly recommended

Jin Shiyuan (603369): Price increase highlights confidence and high momentum continues to be strongly recommended

Event: Jinshiyuan Wine Sales Co., Ltd. issued the “Notice on Adjusting the Price of Guoyuan Brands into the Product Price System” on May 29, which stated that taking into account the increase in production and operating costs of raw materials for wine, product packaging, storage and logistics, andGuoyuan Brand’s future sustainable strategic positioning. From June 25, 2019, the factory price of some imported products of Guoyuan Brand will be raised uniformly, and the terminal supply price, retail price and group purchase price will be adjusted simultaneously.

1) It is recommended to increase the retail price and group purchase price of products on the basis of initialization. Among them, Sikai National margin is increased by 30 yuan / bottle; Fokai National margin is increased by 20 / bottle.

2) It is recommended to increase the terminal supply price on the basis of detailed implementation by each district and office.

Comments: 1. Price increase highlights brand confidence and enhances earnings performance in the second half of the year. We believe that the company’s price increase at that time mainly has the following significance: 1) Further enhance the national brand power and influence and enhance the value of high-end brands.

Since the second quarter, Yanghe Blue Classics and Gujing Year Raw Pulp have increased their prices one after another. The price increase of Guoyuan this time is an important change in the upgrade of liquor consumption, gradually increasing the brand influence of Guoyuan, increasing the brand height, and strengthening consumption.The brand recognition of “China’s high-end medium-grade liquor”.

2) Price increases will increase revenue and performance in the second half of the year.

Channel research understands that the ex-factory price increase of Fosun / Four Kai this time is more than 5%. Taking into account that Foshan accounts for nearly 50% of total revenue, the effect of price increases on the income and performance of the second half of the year will increase.It will be extremely obvious.

2. The completion of the tasks in the second quarter is good, and the Guoyuan series continues to maintain high-growth grassroots analysis feedback. The company has completed about 40% of the tasks in the first quarter, and plans to complete more than 20% of this tasks in the second quarter.Mid-June will complete the second quarter mission goals ahead of schedule.

The national margin series continued to maintain a high growth of more than 30% in the second quarter. In addition to the core products, the new K series (K3K5) also performed very well, due to the low base growth rate conversion.

The company launched a promotional event on May 1st. The current inventory is within a safe level (1 month), at a reasonable level, and the overall price system is quite stable.

3. The company is currently in a period of rapid expansion, and the channel ‘s potential energy is continuously being released. The growth momentum is not changing. The company is currently in a period of rapid expansion. It will increase revenue in the next 3-5 years. We believe that under the current background of increasing brand differentiation, Accelerating market share is the right approach and is conducive to the company’s long-term development.

The recent increase in the price of competitive products in the province, some investors are worried about the expected impact of the current world margin. We believe that the intensified competition in the province is expected to have limited impact on the current world margin. It will take time for the channel adjustment and profit improvement 失败:重查 of the competitive product to remain competitivein.

Looking forward to 19 years and the coming year, the company’s revenue will maintain a high growth through the continuous upgrading of its product structure, the continuous deepening of the market in the province, and the continuous development of distribution channels.

4. Investment suggestion: The price increase demonstrates confidence, the high growth trend continues, and maintains the “strongly recommended-A” rating. We believe that the company’s products maintain high profit margins, adhere to the group purchase model, continue to cultivate consumer effects, and are currently in a period of rapid expansion. ChannelsThe potential energy continues to be released. The price increase further enhances the national brand power and revenue is expected to maintain a high growth.

Considering that the company’s current stage of development further improves revenue and share, market expansion will continue to intensify, the expense ratio is expected to increase, and the profit elasticity should not be expected to be too high.

Maintaining EPS 1 for 19-20 years.

15 and 1.

38 yuan, 20-25X for 20 years, a target price of 28-35 yuan a year, maintaining the “strongly recommended -A” grade.

Risk reminder: demand falls, competition within the province intensifies, and development outside the province is less than expected.