Jiujiu Liquor (000799): Internal reference will continue to double and product structure continues to be optimized

Jiujiu Liquor (000799): Internal reference will continue to double and product structure continues to be optimized
The correction of the manufacturers’ relationship has led to the rapid 杭州夜生活网 growth of internal reference, and the drunkard launched the Red Altar 20 to boost the overall brand power.  At the end of 2018, more than 30 high-end liquor “billion-dollar merchants” in the country jointly funded the establishment of an internal reference wine sales company to independently operate an internal reference brand. The alcoholic wine company merged into a strategic alliance to promote the change in the relationship of manufacturers from transactions to synergy and promote growth by dealers and outletsThe expansion of the number drives the transformation of regional intensive cultivation to large stores, support by large businessmen, and regional occupation as the base. It is jointly controlled through cost co-management channels, benefit sharing and risk sharing to maximize the marketing power, and steadily promote the “淡水桑拿网internal reference” wine.Price stabilization increase.We expect the company to achieve sales of about 400 tons of internal reference in 2019, which doubles several times. The growth rate of the internal reference series / drinker series are about 40-50% / 20% +, respectively.From the situation in 2019, 80% of the internal reference is sold in the province, and the markets outside the province are mainly concentrated in economically developed areas such as Guangzhou and Shenzhen. In 2020, the operating model of the internal reference company will mature and the brand name of the internal reference will continue to increase.It is expected to continue to double.The alcoholic series is currently in the process of product and channel combing. In the future, it will focus on the core single product Gaorou Red Altar and inherit the alcoholic wine, and launch a new red altar 20 to boost the overall brand power and achieve the increase in the volume and price of the alcoholic series.  Compared with Anhui, the market share of leading liquor companies in Jiangsu, the market share of alcoholics in the province has room for improvement in the future.The company’s brand has a high reputation and visibility, and has expanded its influence across the country.In the 2018 “Top-down Comprehensive Improvement, Xiangxi Famous Wine is Ready for Development” in-depth report, we proposed that the company’s market share in the Hunan base market is only 3%, which is much lower than the market share of local leading companies in markets such as Anhui and Jiangsu.As the first brand of Hunan liquor, the base market still has great potential to be tapped.With the spillover of the company’s influence in the Chang-Zhu-Tan base market, other markets in the province are expected to increase steadily. The core markets such as Hebei, Shandong, and Henan outside the province achieve full coverage of prefecture-level cities, and the company is likely to achieve rapid growth in performance.  Profit forecast: We judge that the operating model of the internal reference sales company will gradually mature in 2020, and the sales volume will still double, and the alcoholic series will still be in the process of product adjustment.As the company actively controls the stock of the digestion channel and adjusts the company’s profit slightly, it is expected that the EPS for 2019-2021 will be 0.83, 1.16.1.56 yuan, corresponding to PE is 46 times, 33 times, 24 times, maintaining the “buy” level.  Risk warning: food safety issues; increased competition in the industry.