scratch1| The only revenue and net profit of a 10 billion liquor company have "double dropped". When will Jiugui Liquor emerge from the "trough"?

April is coming to an end.Scratch1The financial report disclosure of A-share liquor listed companies is also coming to an end. According to the author, as of April 29, 16 liquor listed companies with a market capitalization of more than 10 billion yuan have all disclosed their 2023 annual reports, the overall performance has increased, and the performance of the well-known liquor companies in the head is better.

The author is concerned that among the listed liquor companies with a market capitalization of more than 10 billion yuan, the only company with a decline in both revenue and net profit is Jiugui Liquor (000799). In 2023, alcoholic liquor suffered the biggest decline in performance in recent years, with net profit nearly halved compared with the same period last year.

From the perspective of product structure, the sales income of high, middle and low-end products of alcoholic liquor has declined in an all-round way, which is caused by the great pressure of channel inventory and the reduced enthusiasm of dealers to take goods, which once led to a serious price upside-down phenomenon in the channel. Drunkards reduce market supply by stopping product orders.

In addition, alcoholic wine also disclosed the first quarterly report of 2024, the company's performance decline increased, net profit fell by more than 70% compared with the same period last year. In the current period, the total inventory of alcoholic liquor reached a new high, and the contract debt further reduced, reflecting that the channel is more cautious in taking goods.

The only "double drop" of revenue and net profit of 10 billion wine enterprises.

At present, there are 16 listed liquor companies with a market capitalization of more than 10 billion yuan in the A-share market, and most of them achieved positive growth last year. Under the background of de-inventory in the liquor industry, the development toughness of first-line liquor listed companies is strong, and the market concentration continues to improve.

There were five wine companies with net profits of more than 10 billion yuan last year. Guizhou Moutai (600519) maintained a strong growth trend, and its net profit was higher than that of the other four companies combined. The net profits of Shanxi Fenjiu (600809) and Yanghe shares (002304) entered the 10 billion camp, among which the performance of Shanxi Fenjiu increased even more. Therefore, Shanxi Fenjiu is also optimistic for the market, ranking third in total market capitalization.

Among the wine enterprises with net profits ranging from 1 billion yuan to 5 billion yuan, the performance of Gujing tribute wine (000596), this world margin (603369) and Yingjiagong wine (603198) all maintained a rapid growth rate, of which the revenue of Gujing tribute wine exceeded 20 billion yuan for the first time and 10 billion yuan for the first time.

The performance growth of liquor enterprises whose net profit is less than 1 billion yuan varies, and the net profit of some liquor enterprises has declined or even lost money, among which the performance of alcoholic spirit has declined the most. At the same time, the only listed liquor company with a market capitalization of more than 10 billion yuan has suffered a decline in both revenue and net profit.

According to the financial report in 2023, the revenue of alcoholic liquor is 28.Scratch1.3 billion yuan, down 30.14% from the same period last year; net profit was 548 million yuan, down 47.77% from the same period last year. It was also the biggest drop in performance since 2015.

Since Cofco joined the government in 2014, alcoholic liquor has started a "wild run" pace, with rapid growth for eight consecutive years, and has been known as "alcoholic speed". In 2023, the performance of alcoholic liquor suddenly changed, and the sales revenue of its high, middle and low-end products fell across the board.

According to the data, the sales revenue of the internal reference series mainly focused on the high-end market was 715 million yuan, down 38.21% from the same period last year; the sales revenue of the sub-high-end alcoholic series was 1.647 billion yuan, down 27.45% from the same period last year; and the sales revenue of the Xiangquan series, which focuses on the mass market, was 70.55 million yuan, down 68.03% from the same period last year.

The author is concerned that the overall decline in sales of all kinds of alcoholic liquor products reflects the reduced enthusiasm of dealers to take goods, behind which is the great pressure of sales channels to go to inventory. In 2023, the wholesale price of Jiugui wine decreased greatly, even lower than the ex-factory price of the product, resulting in a serious price upside down in the channel.

In this regard, alcoholic liquor by stopping the supply of products to maintain market sales order, maintain the basic price line of products. Last July, alcoholic liquor stopped accepting 52 orders for the sale of 500ml internal ginseng wine, and last October, alcoholic liquor stopped accepting sales orders for alcoholic products.

In the past few years, the performance of alcoholic liquor has grown rapidly, and the number of dealers has also increased rapidly. The number of alcoholic liquor dealers increased from 520 in 2019 to 1250 by 2021 and 1586 by 2022.

As end-market sales slow, a large amount of inventory is overstocked in distribution channels, and dealers are forced to reduce prices to eliminate inventory. In 2023, the number of alcoholic wine dealers continued to increase to 1774, but the company's sales fell sharply. This reflects that alcoholic liquor has lost its effect in the way of expanding dealers to drive performance growth.

The peak is faced with the "trough" of alcoholic wine as soon as he takes office.

The first quarter is often the peak season for liquor sales, especially around the Spring Festival, and most liquor listed companies also got off to a good start in the first quarter of this year. However, after a series of adjustments in 2023, the decline in performance has increased, and dealers have been more cautious about taking goods.

According to the first quarterly report of this year, the revenue of alcoholic liquor was 494 million yuan, down 48.80% from the same period last year, and the net profit was 73.38 million yuan, down 75.56% from the same period last year. In addition, the enthusiasm for taking goods through the channel is not high, and the current contract debt is 235 million yuan, down 36.05% from the same period last year and 17.53% from the previous month. The company's inventory reached an all-time high of 1.59 billion yuan.

What is intriguing is that in the 2023 financial results, alcoholic wine did not explain the decline in performance, but spent a lot of space on the reasons for this in this year's first quarterly report.

Jiugui Liquor said in the first quarterly report that since 2024, the liquor industry as a whole is still in a period of adjustment, squeezing competition in the industry has further intensified, liquor product prices are under pressure, and channel customer confidence is still in the repair stage. Consumer demand for sub-high-end products still needs to be restored.

The performance in the first quarter fell short of expectations, and alcoholic wine gave three major reasons: first, the transformation of the marketing mode is in a critical stage, and the mobile sales of the products are gradually improving, but it still takes time to support the company's sales revenue; second, the company takes the initiative to adjust and optimize channel customers, superimposed with the operational caution of some channel customers, resulting in lower-than-expected payback. Third, the new high-end price products are in the market introduction stage, Volkswagen price series products are affected by production capacity, short-term sales support has not yet been formed.

In response to the third point above, Jiujiu further explained that in the first quarter, the internal reference Jiachen version was still in the market expansion stage and did not form sales support, coupled with the fact that other internal reference products did not form scale income due to control and suspension of goods, resulting in a sharp decline in revenue and profits of high-end products in the first quarter compared with the same period last year.

In addition, although the sales volume of Xiangquan and other Volkswagen price range products has increased, the company's new production capacity is affected by the wine storage period and cannot be converted into finished products in the short term. At present, Volkswagen price range products are still restricted by production capacity. Effective sales revenue and profit supplement have not yet been formed.

The author notes that alcoholic liquor is speeding up production capacity construction. By the end of 2023, the total production capacity of Jiugui Liquor is about 12000 tons. The first phase of the production zone 3 project can be put into production in 2024, and the second phase project of the production zone 3 zone is under construction. After the above project is put into production, the production capacity will be increased by 10800 tons.

Just when the development of alcoholic wine encountered major difficulties, the company ushered in a new chairman. On February 23, Jiujiu announced that the ninth board of directors elected Gao Feng as chairman of the company. In fact, the market had expected this for a long time, and Gao Feng was appointed chairman of Cofco Wine Investment Co., Ltd in December 2023. According to the usual practice, Gao Feng will also serve as chairman of alcoholic liquor.

Judging from his resume, Gao Feng has worked in the functional departments of China Cereals, Oils and foodstuffs Import and Export (Group) Co., Ltd., Cofco Real Estate (Group) Co., Ltd., Cofco Trading Co., Ltd., and Cofco Group Co., Ltd., and has no experience in liquor industry or management. It remains to be seen how to lead alcoholic spirits out of the "trough".