Yanghe shares (002304): fixed adjustments pending a return

Company Q3 income profit -20.

6% /-23.

1%, mainly due to the company’s initiative to slow down and sort out the problem. It was caused by the suspension of stocks and destocking in the third quarter. It is expected that the inventory will be digested to a reasonable level by the end of the year.

The company is determined to make adjustments this time. It takes time for in-depth adjustments. We expect to complete the adjustments in the second half of next year.

We look forward to the company speeding up internal issues and returning to the blue classic era.

Reduce EPS 5 for 19-20 years.

48 and 5.

88 yuan (5 last time).

92, 6.

50 yuan), currently corresponding to 19-20 years is 19.

3x, 18x, considering the implementation of share repurchases in the future, it is expected to gradually enter the stage of predictive repair, given 20x 20x, target price of 117 yuan, maintaining the “strongly recommended-A” rating.

Q3 revenue profit growth -20.

6% /-23.

1%, mainly due to the company’s third quarter out of stock destocking.

The company’s revenue for the first three quarters of 19 was 210.

9.8 billion, ten years +0.

63%, net profit attributable to mother 71.

4.6 billion, previously +1.

53%.

Q3 single quarter revenue of 50.

9.9 billion, at least -20.

61%, net profit attributable to mother 15.

6.5 billion, at least -23.

07%, third-quarter revenue and profit were lower than market expectations, mainly due to combing channels in the third quarter, due to the suspension of stocks and destocking.

19Q3 final advance receipt 19.

7.9 billion, ten years -28.

61%, an increase of 200 million from the previous month, and sales of 60 in 19Q3.

200 million, before -27.

39%, operating net cash flow22.

2.9 billion, before -47.

12%, mainly due to the increase in cash paid to employees.

The strength of discount plus roughly Q3 gross profit margin fell, and the increase in expense ratio suppressed net profit margin.

The company’s gross profit margin was 19Q3 73.

94% -2 per year.

57 points, mainly because the company in the third quarter in order to solve the problems left by the dealer history, increase discounts, the cost directly through the discount from the dealer’s wine purchase, thereby affecting the gross profit margin.

19Q3 sales expense ratio 17.

65%, ten years +5.

05%, mainly due to the company’s third quarter sales revenue increase caused by the increase in expense ratio, 19Q3 management expense ratio (including research and development) 8.43%, ten years +1.

51%, taxes and surcharges 13.

25% per year-6.

26%, Q3 net interest margin fell slightly.

93 points to 30.

74%.

The adjustment is still in progress, and preliminary performance is currently available. It is expected that the inventory will be digested to a reasonable level by the end of the year.

The company began to take measures in early June to comprehensively control goods, digest inventory, rationalize prices, help dealers solve problems left over from history, and motivate dealers. The third quarter of the Mid-Autumn Festival peak season continued the policy of controlling goods and destocking.

At present, preliminary results have been achieved, and the company’s total channel inventory has declined. It has been digested from the highest 3-4 months in the past to the current 2 months and is expected to eventually digest to 1-1.

In May, a reasonable inventory range was reached. At the same time, the prices of main products increased, the relationship between manufacturers eased, and dealer confidence was restored.

The repurchase demonstrates the company’s development confidence, further improves the incentive mechanism, and enhances team cohesion.

The company also released a plan for the repurchase of some social public shares. It plans to repurchase shares at a price of 10-15 million U.S. dollars, and the repurchase price does not exceed 135 yuan / share.Shareholding plan.

We believe that the company ‘s move is to demonstrate the company ‘s confidence in future development, and the second is to further improve the company ‘s incentive mechanism, fully mobilize the enthusiasm of core backbones, improve team cohesion, and transform the company ‘s current marketing adjustment into a replacement for the alternative.The basics.
The company decided to adjust, determined to accumulate long-term development, and waited for the business to improve.

The company’s determination to adjust is imperative, and it is necessary to effectively solve the problems in the market. We believe that the company should be given time for deep adjustment and the problems should be thoroughly sorted out. It is expected that the company will gradually complete the adjustment at the end of Ming Dynasty to help the long-term sustainable development in the future.

We believe that Yanghe is still a company with first-class capabilities. The continuous expansion and market operation of the past ten years has become a national sub-high-end liquor brand with the same reputation 天津夜网 as Jiannanchun. Dream Blue has a lot of softness in eastern and central China provinces.As a loyal consumer of taste, the “Yanghe + Shuanggou” dual-brand wine brand allows the company to adopt a more flexible play style in marketing. At the same time, the new chairman of the sales company, Chairman Liu, has a high reputation and the team is still strategic.A visionary and daring first-class team waits for the company’s business to improve.

Investment suggestion: adjust the storage capacity for long-term development, wait for the adjustment to be in place, and maintain the “strong recommendation-A” level.

The company’s three quarterly report decreased. The reason behind it was that the company took the initiative to adjust the channel profit and product structure in the face of historical accumulation issues, waiting for the company’s inventory to be digested, and the channels gradually rationalized.

Taking into account internal adjustments, the EPS for 19-20 is slightly reduced.

48 and 5.

88 yuan (5 last time).

92, 6.

50 yuan), currently corresponding to 19-20 years is 19.

3x, 18x, taking into account the future implementation of share repurchases, it is expected to gradually enter the stage of predictive repair at the end, giving 20x 20x with a target price of 117 yuan, maintaining the “strongly recommended-A” rating.

Risk reminder: industry demand is falling, competition within the province is intensifying, and development outside the province is less than expected