Shanxi Fenjiu (600809) 2019 Interim Report Review: Significantly Outperformed Product Strategy

Shanxi Fenjiu (600809) 2019 Interim Report Review: Significantly Outperformed Product Strategy

Performance accelerated quarter-on-quarter, and the tax rate dropped to achieve revenue of 63 in the first half of 2019.

800 million increase by 22.

3%, net profit attributable to mother 11.

900 million with an increase of 26.

3%, of which Q2 income is 23.

200 million with an increase of 26.

3%, net profit attributable to mother 3.

100 million increased by 38%, the performance accelerated significantly over the previous quarter, exceeding market expectations.

19H1 gross margin 71.

5%, +1 each time.

8pcts, mainly due to the company’s core categories to maintain structural upgrades and correct price increases.

Consumption tax rate decreased by 2.

5% to 13.

5%, sales expense ratio 21.

6% increased by 3.

6pcts, due to the increase in budget, expansion of markets outside the province, initial market expansion and terminal expansion, advertising costs and market expansion costs increased by 38% and 189%, respectively, and the management expense ratio was 5.

1% increase with 0.

3%, net profit 19.

8% down with 0.


19H1 period-end advance payment 14.

800 million with an increase of 80.

6%, an increase of 2 from Q1.

800 million, stable payment situation.

The initial sales in 19H1 were 7.5 billion yuan, an increase of 86%, and net operating cash flow was 16.

900 million yuan increased significantly compared with the same period last year, and cash flow performance was positive.

The company plans to ensure that its operating income will increase by more than 20% in 2019.

Mid-to-high-end wines are growing at a positive rate, shaping the high-end international image of the products.

300 million US dollars, of which the growth rate of blue and white is over 50%. The 苏州夜网论坛 two-step price increase on May 17 and July 1 is conducive to profit optimization. The sales of Laobaifen and Bfenfen have achieved steady growth of nearly 20%.

8 trillion, 2 trillion income from the preparation of wine.

The company promotes the strategy of grasping intermediate products on both ends, and promotes the development of mid-range old Baifen with Qinghuafen and Bofen. Qinghuafen strives for the high-end track, insists on holding high, and develops core terminal construction and layout.The liquor market still has room for capacity, and it will continue to continue to promote product upgrades and deep distribution of channels.

In accordance with the “international Fen” communication positioning, the brand promotion internationalization continued to be launched. The Blue and White Fen appeared at the 2019 Ministry of Foreign Affairs Global Promotion Conference. The Brussels “International Spirits Competition” created a high-end brand image.

The growth rate outside the province was positive. The number of dealers in the company continued to deepen at the end of the reporting period. The number of company dealers reached 2,261, and 93 dealers were gradually adjusted and reduced.

Revenue in the province in 2019H1 31.

500 million with a 9 increase.

8% accounted for 57%, and the market revenue outside the province was 31.

The 700 million yuan increased by 49% and accounted for 51%, which further increased 4pcts compared with Q1.

The company uses Qinghuafen as its core product, relying on the consumption upgrade in the province and the focus of the advantaged market outside the province, to drive the continuous optimization of the product structure. In 2019, it will be transformed into a base market (Shanxi), and three major sectors (Beijing, Tianjin, Hebei, Henan,Shaanxi and Mongolia), 3 small market segments (East China, Two Lakes, and Southeast), and 13 regional opportunities for out-of-provincial markets, classified and built, and intensive cultivation produced significant results. Profit forecast and estimation: The company’s product price increase and market promotion will enhance the brand image and competitiveness. It will be cultivated inside and outside the province and there is still room for coordinated development with China Resources.

Maintain the original forecast of EPS for 2019-2021 is 2.



46 yuan, corresponding to 31/25/20 times PE, one-year target assessment of 80.


1 yuan, maintain “Buy” rating.

Risk Warning: Dividing the Prosperity of the Liquor Industry; Growth of High-end Liquor Slows Down; Regional Expansion Less Than Expected