Strong sales momentum continuing in 2021
■ Fen Wine held a shareholders meeting for its FY20 results at its headquarters, in FenYang, Shanxi province, and shared its future development strategy.
■ The upgraded version of the Qinghua30 Fuxing has been well accepted by the market and is gradually replacing the old version, with a higher retail price. We think sales of the premium and above brand, the Qinghua series, has maintained strong momentum in 2Q21F
■ We now expect the Company’s sales to grow by 35% yoy in FY21F, with net profit up by 44% yoy, driven by strong demand for Qinghua products in new markets and better retail channel penetration for the Bo Feng brand.
■ Reiterate Add with a higher TP of Rmb528. The FY20 annual dividend will be Rmb2 per share plus a four-for-10-share bonus issue, which should be executed in Jul.