Moutai, Guizhou (600519): Stable characters take precedence over quality

Moutai, Guizhou (600519): Stable characters take precedence over quality
Investment points: Investment advice: Moutai still has high-speed growth capabilities, and its earnings volatility will be significantly reduced in the future.Moutai will always have the industry’s top brands, products, and channel control. The proportion of direct sales has increased and increased with each passing day, and performance has become more stable.In 2020, the “Infrastructure Year” will be adjusted to inject new power into Maotai from production to channels.Considering that Maotai’s business plan shifts to 四川耍耍网 steady growth and pursues relatively stable and sustainable development, it lowers EPS 32 for 2019-21.19, 38.48, 50.99 yuan (previous 35.75, 45.25, 55.58 yuan), cut target price to 1347 yuan, corresponding to 2020 35X PE, increase rating.  In 2020, the volume of Moutai wine plans exceeded expectations and plans to release3.45 per year, an annual increase of 11%.The market is expected to increase its investment volume by 5%, mainly due to the impact of 2016 output to determine sales volume. After the completion of the 100 billion target, the 2020 growth requirement will be reduced.The significance of the preliminary confirmed production forecast sales lies in long-term, short-term sales are more related to business strategy.The planned volume exceeding expectations is consistent with the idea of stable operation.  It is clear that the Spring Festival does not raise prices, whether to raise prices still depends on the word “stable”.Restatement that the price of Moutai involves the interests of the government, enterprises, shareholders, distributors, consumers and other parties, and “the short-term price increase” has not appeared.We believe that stable operation is a substitute for Moutai’s price increase, but Moutai attaches great importance to raising prices and taking into account the interests of all parties. The price control ability of channels for sale is further strengthened, and the possibility of price increases in 2021 is great.  Consolidation of direct sales channels is the key to the future stability of Moutai.Among the basic warnings for the management of distribution channels, the existing planned volume of dealers remains stable.The new plan is divided into a direct-operating system, in which the number of self-operated specialty stores doubles, and according to the gradual approach, the business super, e-commerce, and group purchase plans are arranged.We believe that only Moutai is the real terminal in the liquor industry. Through the increase of the direct sales ratio, Moutai 深圳spa会所 can better control the price change and reduce the disorder such as consignment. The channel control is far superior to its peers.  Risk Warning: Food Safety Issues; Significant Increase in Terminal Prices Increases Severity of Channel Management