Liquor industry: Alcoholic drinks and old wells have long-term potential

Xu Hao Securities High-grade liquor in the brand, culture and price and other aspects of the advantages of leading the last round of liquor consumption upgrades, high-end liquor sales scale and profitability has reached a high level, high-grade liquor sustained high-speed growth after the need to find a new balance point. Starting in the third quarter of 08, the impact of the economic crisis on the liquor industry began to appear, the existing pattern of liquor industry may be loose, we are optimistic about the relative growth of mid-range liquor. We are optimistic about the growth of mid-range liquor market level reasons are: 1 high-end demand decline, the consumption center of gravity down; 2 low quality and safety problems of low-grade liquor, low-grade liquor market atrophy, low-grade liquor consumption upgrade, 3 rural residents income growth and stability, rural liquor consumption upgrade; 4. The main consumption areas of mid-range liquor are concentrated in Central plains,　　Central China region, affected by the economic crisis is small, mid-range wine consumption of regional support strength. Optimistic about the growth of mid-range liquor sales level reasons are: 1 high-grade liquor to be persuaded to control the amount of the strategy for the mid-range wine extrusion incremental space, 2 high-grade liquor prices continuously, freeing up the mid-range liquor price increase space, 3 mid-range liquor with sales distribution mode change, the brand independent operation to enhance the enthusiasm of dealers; 4)　　Mid-range liquor marketing investment intensified, and promote sales growth. Compared to the mid-range liquor market competition in two types of companies, we are more optimistic about regional liquor companies in the mid-range liquor market sales growth.　　In the second to third quarter, liquor consumption off-season and economic crisis on the impact of high-grade liquor led to lower overall valuation level, but the arrival of the fourth quarter consumption season and the consumption environment with the recovery of the economy will enhance the industry valuation level. In the second half of 09, we believe that the liquor industry investment opportunities mainly focus on alcoholic drinks and ancient well gong: 1 The company management changes, performance improvement will be gradually implemented; 2 The company's products are located in the main sales of mid-range liquor market space in the central and Middle China, The company's market share in the main sales region still has a larger space for improvement; 3 the existing capacity, storage and liquor can support sales growth; 4 The company's tax avoidance measures are less, the consumption tax burden is heavier, the liquor consumption tax imposition strictly has little influence on the company performance.　　In addition to the two typical mid-range wine companies, we are optimistic about the national extension of the old cellar tequ of Luzhou's mid-range products. It is expected that alcoholic liquor 09 earnings per share of 0.21 yuan, 2010 earnings per share of 0.32 yuan; Gong is expected to gain 0.22 yuan per share of the 09, 2010 earnings per share of 0.37 yuan. While key data on some of the marketing changes are still being implemented, our forecasts may be somewhat conservative, but do not affect our judgment about the two companies entering a long-term growth phase. Alcoholic drinks and ancient well gong, alcohol because of low income base, the future relative growth of space may be greater, the price elasticity may also be higher. "Short-term-recommended" for alcoholic beverages and ancient well gong respectively. Long-a "investment rating.