# Moutai, Guizhou (600519)： The volume of direct sales in the third quarter obviously increased significantly from the previous month

Moutai, Guizhou (600519): The volume of direct sales in the third quarter obviously increased significantly from the previous month

1.Event Guizhou Moutai released the third quarter report of 2019.The company achieved total operating income of 635 in the first three quarters of 2019.09 million yuan, an increase of 15 in ten years.53%, operating income 609.35 ppm, an increase of 16 in ten years.64%; net profit attributable to mother is 304.55 ppm, an increase of 23 in ten years.13%, deducting non-attribution net profit 305.34 ppm, an increase of 22 in ten years.48%. 2.Our analysis and judgment (1) In the third quarter, the single-quarter revenue was 14%, and the profit growth rate was 17%.From the single quarter data, the company’s total operating income for the first three quarters of 2019 was 224.81, 186.92, 223.3.6 billion, the previous growth rate was 22.21, 10.89, 13.81%; operating income was 216.44, 178.44, 214.470,000 yuan, the previous growth rate was 23.92, 12.01, 13.81%; net profit attributable to mothers was 112.21, 87.30, 105.04 billion, the annual growth rate was 31.91, 20.29, 17.11%; net profit after deduction is 113.02, 87.30, 105.30,000 yuan, the previous growth rate was 32.79, 18.39, 16.12%.The overall growth of the company is still stable, and the profit growth rate is higher than the income growth rate. In the first three quarters of 2019, Moutai and series of wines respectively achieved revenue of 538.32, 70.380,000 yuan, the annual growth rate was 16.36, 18.61%.Judging from the growth performance of single quarter in 2019, after the high growth of Moutai in the first quarter, the interval between the second and third quarters was stable and maintained at about 12%; the series of wines were weaker in the second quarter, and the performance in the first and third quarters was stronger, both exceeding20%. (2) Ten-year advances in account receipts have increased slightly, and the payment policy has changed. The company’s advance account receipts have seen a small increase in ten years.In 19Q3, the company’s balance of advance receipts was 112.55 ppm, a decrease of 10 from Q2.20,000 yuan, an increase of 0 in ten years.79%, on the basis of the continuous negative growth of 6 consecutive quarters at the end of the second quarter, achieved a small increase.Company Q3 received a sales rebate of 228.39 million, net operating cash flow was 32.28 ppm, operating cash flow net / net profit ratio from 246 in 19Q2.72% fell to 28 in 19Q3.79%, compared with 108 in the third quarter of last year.67%. The adjustment of the payment policy has an impact on advance receipts and cash flow indicators.According to the relevant information of the wine said, the company notified in mid-June that dealers were required to complete the third and fourth quarters of Moutai 53 degrees (with a cup) before June 30, and canceled the original third-quarter payment plan.Therefore, the company’s Q2-Q3 advance receipts and cash flow changes were within expectations. (3) Increase in gross profit margin and net profit margin The company’s gross profit margin and net profit margin continued to increase steadily on a high base, and profitability increased.The company’s gross profit margin for the first three quarters of 2019 was 91.49%, an increase of 0 a year.37PCT, presumably related to the company’s increase in the release of high unit price non-standard wine.The company’s sales expense ratio for the first three quarters of 20194.29%, down by 1 every year.16PCT, indicating that the company’s marketing performance has improved. Considering that the direct sales share will increase in the second half of the year, it is expected that with the release of marketing resources, the sales rate will be gradually stabilized; management + research and development rate6.79%, a decrease of 0 every year.25PCT, management efficiency has been further improved.The increase in gross profit margin and the decline in the period rate drove the company’s net profit margin to increase.33PCT to 53.19%. (IV) The volume of direct sales in the third quarter was obvious, and the proportion of direct sales increased significantly from the first three quarters of 2019. From the first three quarters of 2019, the percentage of direct sales was lower than last year’s average, mainly due to the impact in the first half of the year.In the first half of 2019, the company’s direct headquarters accounted for 4.06%, lower than 7 in the first half of 2018.72%; In the first three quarters of 2019, the company’s direct sales accounted for 5.10%, down from 7 in the first three quarters of 2018.41%; The ratio of direct construction ten years ago in 2018 was 5.95%. In 19Q3, the volume of direct sales was obvious. The proportion of direct sales increased slightly for many years, and the chain ratio increased significantly.In the third quarter of 2019, the company’s direct sales accounted for 7.01%, reaching the highest level in all quarters since 2018, which was 19Q1 and 5 Q2.05, 2.86% has improved significantly. The number of dealers continues to decrease, and the corresponding response is expected to be increased direct sales.According to our calculations, the company reduced 122 domestic Moutai liquor dealers in the first three quarters of 北京夜生活网 2019, of which Q1 decreased by 39, Q2 decreased by 60, and Q3 decreased by 23; in the first three quarters, the company reduced 494 series of liquor dealers and added 30 Family.In 2018, the company reduced 437 Moutai distributors. At the Moutai Distributor Conference on December 28, 2018, Li Baofang said that Moutai will launch Moutai 3 in 2019.1 Nominally, the distribution contract will be based on the planned volume and stock in 2017, insisting on “not increasing or decreasing”, totaling about 1.Around 7 with 1 remaining.4 Will be used partly to increase the proportion of direct and self-employed.The company plans to launch Moutai 2 in 2018.8 for the first time, actual placement 3.In 25 months, the actual amount of investment in 2019 is expected to exceed the planned amount. In the first half of the year, the promotion 天津夜网 of direct sales was not strong, and in the second half of the year, it seriously paid attention to its volume and price policies.In April 2019, the company took out 600 tons of additional public public offering mall stores, which was called the test of direct channel expansion.On May 5, Guizhou Moutai Group Marketing Company was unveiled.At the company’s 2018 annual shareholder meeting at the end of May, the company stated that the supply of Moutai and series wines in Moutai’s directly-operated stores will increase by about 1,000 tons per year, and consider increasing the number of directly-operated stores.In July, the company selected three national e-commerce platforms to supply 400 tons of Moutai.As the gross profit of direct sales is higher than that of distribution, the increase in the percentage of direct sales improves the company’s profit. However, the determination of the sales price of this company and the group sales company will be higher than the current replacement of dealers, which will increase the company’s profit.At the distribution price, this portion of profits will be digested by the Group. 3.Investment proposal is expected to achieve a total operating income of 903 in 2019-2021.00, 1050.64, 1216.43 ppm, an increase of 16 each year.97, 16.35, 15.78%, achieving net profit attributable to mother 426.86, 503.36, 585.26 trillion, an increase of 21 each year.25, 17.92, 16.27%, corresponding to an EPS of 33 in 2019-2021.98, 40.07, 46.59 yuan, the current multiple of PE corresponding to 35, 30, 25 times, maintaining the “recommended” level. 4.Risks indicate food safety risks; the risk of weak downstream demand; direct sales are less than expected risks.

## Recent Comments