King’s Luck reported that FY20 sales grew by 5.1% yoy to Rmb5.1bn and net profit rose by 7.5% yoy to Rmb1.57bn, in line with our estimates. We expect the upgraded version of Guoyuan4, to be launched in May, to receive good feedback and gain market share in the price range of above Rmb500 per bottle. We now expect the Company’s sales to grow by 30–40% yoy in 1Q21, and 24% yoy in FY21F, with net profit up by 20% yoy in FY21F, driven by the continual consumption upgrade in Jiangsu province and further expansion in outside markets. Reiterate Add with a new DCF-based TP of Rmb62.
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