Guizhou Moutai (600519): slightly lower performance and expected strong demand

Guizhou Moutai (600519): slightly lower performance and expected strong demand
Brief introduction of results Moutai released the 2019 third quarter report on October 15, and achieved revenue of 609 in the first three quarters.35 trillion, the same increase of 16.6%; net profit attributable to mother 304.55 trillion, an increase of 23.1%.Single third quarter revenue of 214.4.7 billion yuan, an increase of 13.8%; net profit attributable to mother 105.04 trillion, the same increase of 17.1%. Operating analysis The 19Q3 performance was slightly lower than expected, mainly because the company actively adjusted the scheduling rhythm.The company received advance payment 112 at the end of the third quarter.55 trillion, a decrease of 10 from the previous month.20,000 yuan, an increase of 0 every year.8.8 billion yuan.Pioneer requires dealers to implement the fourth quarter plan and alternative indicators in advance, and the market has higher expectations for the third quarter report.The growth rate of the Q3 report was slightly lower than expected, mainly due to the initial recovery of dealers and the adjustment of direct sales channels, and the company’s issuing rhythm has improved.In terms of products, 19Q3 Maotai liquor earned 190.4 trillion, the same increase of 12.8%; series wine income 23.8.3 billion, an increase of 22.8%.The confirmed amount in the 18Q3 statement is 8,200 tons. Combined with the grassroots survey, we expect that the confirmed amount in the 19Q3 statement will increase by a medium value, about 8500-8600 tons. The sales expense ratio decreased and profitability continued to improve.19Q3 company gross margin was 90.8%, down by 0.7pct, due to the expansion of the non-standard launch range in the third quarter and the increase in raw material costs; the single-quarter sales expense ratio was 2.8%, same minus 0.5%, market development expenses were further reduced; 19Q3 net profit was 52.3%, the same increase of 1.1pct, profitability improved.In terms of cash flow, 19Q3 net operating cash flow was 273.1.5 billion, with a decrease of 3.21%; cash receipts increased by 15% in the first three quarters, and revenue was basically flat. Channel reform is accelerating, waiting for the direct sales volume in the fourth quarter.In terms of different channels, the company’s direct sales revenue for the first three quarters was 31.0 billion, accounting for 5%.In the first half of the year, the direct marketing volume was only about 600 tons. After the company’s related-party transaction plan was successfully implemented, the first batch of successful bidders in the Supermarket and e-commerce channels have started to sell 1499 yuan externally. We expect the speed of direct sales in the fourth quarter to accelerate.In terms of distribution channels, through the company’s management system and dealers’ rectification, the number of dealers decreased by 616 from the beginning to the end of the reporting period, the overall quality of dealers improved, and the company’s marketing layout was optimized. Post-holiday channel price feedback is good and is expected to achieve the 100 billion target.According to channel feedback, the Feitian Moutai approval price changed between 2200-2320 yuan after the two festivals, and market demand remained strong.We believe that the slightly lower expected short-term confirmation of shipments is due to the company’s active adjustment, not a demand issue.In the future, by increasing direct sales, Moutai will effectively eliminate price bubbles and speculation, thereby releasing more real demand in the market.As the leader of the liquor industry, the company’s long-term recommendation logic remains unchanged, with a target of 100 billion yuan. The profit forecast predicts that the company’s total operating income for 19-21 will be 892/10/10 billion US dollars / 1217 billion US dollars, respectively +15.6% / 17.6% / 重庆耍耍网 16.0%; net profit attributable to mothers is 426 ‰ / 506 ‰ / 593 ‰, respectively +21.0% / 18.8% / 17.2%, equivalent to 33.91 yuan / 40.27 yuan / 47.20 yuan, currently corresponding to 19-21 years PE are 36X / 30X / 26X respectively, maintain “Buy” rating. Risks indicate increased market competition / decreased market demand / delivery of direct sales channels is not as expected / food safety issues.