WLY(000858) 首创证券·2024-11-11 13:14Investment Rating - The report assigns a Buy rating to Wuliangye (000858) [2] Core Views - Wuliangye delivered solid Q3 2024 results with revenue of RMB 67.92 billion (+8.6% YoY) and net profit of RMB 24.93 billion (+9.19% YoY) [3] - The company maintained stable profitability with Q3 gross margin at 76.17% (+2.77pct YoY) and net margin at 34.02% (-0.02pct YoY) [3] - Wuliangye adjusted its business strategy to strengthen shareholder returns, with a minimum 70% dividend payout ratio (up from 60% in 2023) and at least RMB 20 billion in annual cash dividends [3] - The company is expected to achieve net profits of RMB 32.79 billion, RMB 35.67 billion, and RMB 38.93 billion in 2024-2026, representing YoY growth of 8.5%, 8.8%, and 9.1% respectively [3] Financial Performance Income Statement - Revenue is projected to grow from RMB 89.91 billion in 2024 to RMB 105.34 billion in 2026, with a CAGR of 8.2% [4] - Net profit margin is expected to increase from 36.5% in 2024 to 37.0% in 2026 [5] - EPS is forecasted to rise from RMB 8.45 in 2024 to RMB 10.03 in 2026 [4] Balance Sheet - Total assets are projected to grow from RMB 182.39 billion in 2024 to RMB 214.31 billion in 2026 [5] - Current ratio is expected to improve from 4.86 in 2024 to 5.42 in 2026 [5] - Debt-to-asset ratio is forecasted to decline from 18.6% in 2024 to 16.8% in 2026 [5] Cash Flow - Operating cash flow is expected to increase from RMB 30.67 billion in 2024 to RMB 36.56 billion in 2026 [5] - Free cash flow is projected to grow steadily, supported by efficient working capital management [5] Valuation - The stock is trading at 17.6x, 16.2x, and 14.8x forward P/E for 2024-2026 [4] - Dividend yield is estimated at 3.98% based on the 70% payout ratio [3] - P/B ratio is expected to decline from 4.0x in 2024 to 3.4x in 2026 [5] Business Strategy - Wuliangye is optimizing its product mix, focusing on premium products like Classic Wuliangye to capture high-end market share [3] - The company is strengthening channel management and dealer relationships to maintain healthy manufacturer-distributor dynamics [3] - Marketing efforts are increasingly consumer-centric, emphasizing consumption activation, banquets, and tasting events [3]