JINHUI(603919) 华福证券·2024-07-14 06:30Investment Rating - The report assigns a "Buy" rating to the company, with a target price of 18.74 RMB, indicating a potential upside of over 20% relative to the market benchmark index within the next 6 months [2][38] Core Views - The company is a leading liquor producer in Northwest China, with a strong historical foundation and upward momentum since its "second entrepreneurship" initiative in 2018 [8] - The company has a clear product matrix, with five main series targeting different price segments and regions, and no private-label products [7][34] - The company is expected to achieve a net profit of 4.19/5.41/6.92 billion RMB in 2024-2026, with a CAGR of 27%/29%/28%, and a PE ratio of 23/18/14 times [38] Market Analysis Domestic Market (Gansu Province) - The company has a dominant position in Gansu, with a market share of around 24% in 2023, and potential to increase to 45%-50% [52] - The liquor market in Gansu is estimated to exceed 8 billion RMB, with mainstream consumption priced above 100 RMB [6][52] - The company is focusing on product structure upgrades and increasing market share in key regions like Longdong and Hexi [6][52] Northwest Market Expansion - The company is expanding into neighboring provinces like Shaanxi, Ningxia, Qinghai, and Xinjiang, with a focus on the 100-400 RMB price segment [6][10] - In Shaanxi, the company is targeting the 100-400 RMB price segment with its "Energy" series and gradually introducing higher-end products [120] - In Ningxia, the company benefits from geographical and cultural proximity to Gansu, with a focus on the 100-400 RMB price segment [111][112] - In Qinghai, the company is leveraging its Gansu base to promote "Gan-Qing-Xin" market integration, targeting the 100-400 RMB price segment [115] - In Xinjiang, the company is targeting the large population of Gansu natives and focusing on the 100-400 RMB price segment [131][142] Product Strategy - The company has a clear product matrix, with five main series: Year, Star, Soft, Positive Energy, and Old Cellar, targeting different price segments and regions [34][48] - The company is focusing on upgrading its product structure, with high-end products (above 100 RMB) accounting for 62.93% of revenue in 2022, up from 36.35% in 2018 [42] - The company is targeting the 100-300 RMB price segment as its main product line, with revenue of 1.288 billion RMB in 2023, up 32% YoY [42][89] Financial Performance - The company achieved revenue of 2.548 billion RMB in 2023, up 26.6% YoY, with a net profit of 329 million RMB, up 17.3% YoY [135] - The company's gross margin was 62.4% in 2023, with a net margin of 12.7% [135] - The company's ROE and ROIC were 9.9% and 11.3% respectively in 2023 [135] Valuation - The company's 2024-2026 PE ratios are estimated at 23/18/14 times, lower than the average PE of comparable companies (25/18/15 times) [140] - The company's 2024-2026 PB ratios are estimated at 2.7/2.4/2.1 times [38]