Investment Rating - The report assigns a "Buy" rating for the company with a target price of HKD 12.01, indicating a potential upside from the current price of HKD 7.91 [1]. Core Insights - The company is positioned to benefit from a three-engine growth model, with its flagship brand, Zhenjiu, leading the way, followed by Li Du and regional brands like Xiangjiao and Kaikouxiao [9][10]. - The management team, led by founder Wu Xiangdong, has extensive experience in the liquor industry, which is seen as a key advantage for navigating market challenges [17][23]. - The company has demonstrated strong revenue growth, with a compound annual growth rate (CAGR) of 42.79% from 2020 to 2023, driven by strategic acquisitions and brand development [10][12]. Summary by Sections 1. Three-Engine Growth Model - The company has integrated high-quality assets to create a three-engine growth model, consisting of Zhenjiu, Li Du, and Xiangjiao & Kaikouxiao, which are expected to drive future growth [9][10]. - Zhenjiu has become a leading national brand in the mid-to-high-end liquor segment, contributing 65% of total sales in 2023, with revenue growing from CNY 1.346 billion to CNY 4.583 billion from 2020 to 2023, achieving a CAGR of 50.46% [12][38]. - Li Du, contributing 16% of sales, has transitioned to the high-end market with revenue increasing from CNY 0.359 billion to CNY 1.110 billion during the same period, with a CAGR of 45.63% [12][38]. - Xiangjiao and Kaikouxiao, as regional leaders, contributed 17% of sales, with Xiangjiao's revenue growing from CNY 0.395 billion to CNY 0.834 billion (CAGR of 28.28%) and Kaikouxiao's from CNY 0.172 billion to CNY 0.385 billion (CAGR of 30.77%) [12][13]. 2. Management Experience - The founder, Wu Xiangdong, has over 20 years of experience in the liquor industry, having successfully navigated various market cycles and established a strong brand presence [17][23]. - The management team has a proven track record in brand building and market expansion, which is critical for the company's future growth [24][27]. 3. Financial Projections - The company is projected to achieve revenues of CNY 85.32 billion, CNY 102.28 billion, and CNY 120.38 billion from 2024 to 2026, with corresponding net profits of CNY 18.97 billion, CNY 25.33 billion, and CNY 33.51 billion [2]. - The report uses a P/E valuation method, estimating a target P/E of 19.5x for 2024, leading to a target market capitalization of CNY 37 billion [2][12].
三级引擎齐发力，珍酒李渡成长可期