Wuliangye (000858) Company Review: Significant reforms and improvements in cost-effectiveness boost performance release
1. The reform has achieved remarkable results, and the reform dividend has been continuously released.
Wuliangye is currently advancing the digitalization project, cleaning up a series of liquors and the fifth-brand products, and actively reforming internal culture, strategic positioning, 杭州桑拿 implementation actions, and self-evaluation.
The reform is expected to continue to improve profit margins, marketing conditions, and help Wuliangye seize opportunities for industrial integration and consumption upgrades, and continue to release the company’s internal advantages.
During the reform process, the company attaches great importance to product quality, employee motivation and internal culture shaping, and promotes the repurchase rate in core areas. At present, reform dividends are being continuously released.
2. The price / performance ratio continued to increase, and the repurchase rate of products was promoted.
The core of consumer products is restocking and repurchase rates. Wuliangye helps achieve better restocking through digital marketing, while continuously improving product quality, brands, and promoting product repurchasing rates through continuous improvement in cost performance.
The initial Wuliangye product quality and brand value have been continuously improved, the cost performance has continued to increase, and future consumption is expected to continue to expand.
3. Underestimation and high ROE broaden prospects.
With the expansion of MSCI, foreign, insurance and other long-term overseas funds have continued to flow in.
High ROE companies with certain consumption barriers and consumer stickiness will become the preferred allocation target for these funds.
Absolutely, foreign understanding of the reform of state-owned enterprises has gradually improved, and Wuliangye, as a determined performer of state-owned enterprise reform, has promising prospects.
4. Overseas business, series of wine and mergers and acquisitions bring incremental opportunities.
Wuliangye actively deployed overseas business and implemented the strategy of combining Puwuhe series of wines to go global. It is expected that the two spirits markets along the Belt and Road will gradually enter the period of performance harvest in the next three years, which will promote the increase of Wuliangye’s overseas business.
In the domestic market, Wuliangye series of wines have a chance to break through, and the development space is broad.
Target space: As the company’s product matrix upgrades and optimizations, and the state-owned enterprise reform progresses in an orderly manner, we have raised our revenue forecasts for 19-21 from 480, 567, and 652 to 500, 600, and 69.1 billion, respectively, with a 25%, 20%, 15% increase.%; Net profit forecasts for 19-21 are raised from US $ 17.1, 20.6 and 24.3 billion to 17.5, 23.9 and 26.9 billion, respectively, and EPS are 4 respectively.
93 yuan / share.
In addition, the company’s channels have improved significantly. The reform of state-owned enterprises has continued to improve efficiency and the consolidation of leading companies has consolidated Wuliangye’s 20-year P / E ratio of 28 times. The target price has been raised from 126 yuan to 166 yuan, with 30% of room.
Risk warning: food safety risks, reforms fail to meet expected risks, and terminal demand declines