Dear friends, good morning, good noon and good evening
Yanghe's study came to an end, and then I started the study of Moutai.
I plan to spend about 2 years studying the liquor industry.
The more you study, the more you feel ignorant, the more you know that you still need to know more knowledge, even common sense. Fortunately, I don't demand too much from myself, just asking for the joy of an inch of progress. As for the unexpected arrival, I dare not say, no matter when he comes, whether it will come. Just do it now.
Moutai's prospectus can be downloaded directly on the Juchao Information Network. Very convenient.
The prospectus, at the beginning, talked about the major shareholders before Moutai's listing.
In the rearview mirror, in 1999, 1.478 million shares were obtained, with a shareholding ratio of 0.54%. It's a real investment.
However, we can never look back and see how it was then. Instead, it should be translated to that time. Think from the perspective of that time.
In 1999, Moutai's net assets were 248,306,300. With 1.478 million, buy 0.54% of the shares. 0.54% of 248.3063 million is equal to 1.3409 million, and it is also super cost-effective to buy high-quality assets at a premium of 9%.
Shanghai Jieqiang is also a shareholder of Yanghe.
The joint stock company leases the group's land, about 220,000 square meters, with an annual rent of 2.06 million. What is the rental level? One square meter is 9.36 yuan a year.
The joint stock company leased the group office building, wine warehouse, workshop office building, etc., 84,000 square meters. The annual rent is 4.39 million. $52 a square year.
The company issued 65 million public shares and reduced 6.5 million state-owned shares (6500 + 650 = 71.5 million shares), the company's equity structure chart:
Moutai has 2 holding subsidiaries. One is Moutai liquor sales company, and the other is Moutai liquor import and export company. Moutai Wine Sales Company, the company only owns 95% of the shares, the other 5% is owned by the group.
The sales company sells Moutai wine. Import and export companies are for expanding overseas markets.
Next, let's look at the analysis of the market situation of liquor in 2001
In 2001, there were 37,000 liquor enterprises. There are 4,870 independently accounted for at or above the township level. The output of liquor is 5 million tons, with an output value of 35 billion yuan. (an average of 7,000 yuan a ton, 3.5 yuan a catty) The market has changed from a seller's market to a buyer's market.
Baijiu is labor-intensive. The technical content is not high. However, the level of industrialization has increased, and the level of mechanization has increased.
Famous wines dominate the market. Famous wines account for about 10% of wine production. With the upgrading of consumption, the demand for wine grade has developed from low to high.
Baijiu is characterized by low industry barriers. The production cost is low, and there are a large number of substitutes for liquor. Intangible assets such as product quality and brand are the most important assets of an enterprise.
Joining the WTO will not have an impact on the liquor market. The main thing is that Chinese habits of drinking baijiu will not change easily. And joining the WTO can expand overseas markets.
The advantages of Moutai are the brand sound, good quality of wine, strong technology and excellent quality management. The improvement of living standards and the demand for high-quality liquor. State support.
The disadvantage is that it is located in Guizhou, the transportation is inconvenient, the infrastructure is not good, and the process needs to be stored for 5 years to leave the factory.
Moutai has 53 degrees, 43 degrees, 38 degrees, 33 degrees Kweichow Moutai wine and 80, 50, 30, 15 years old "Kweichow Moutai wine", "Moutai prince wine" and other products.
This table shows that the high Moutai wine is 161.1 yuan per catty. The low degree is 126.4 yuan.
In 2000, the annual production capacity of Moutai wine was more than 4,000 tons, and the supply of products exceeded the demand. Build specialty stores and counters in key cities. In Shandong, Henan, Liaoning, Jiangsu, Guizhou. This is the key market of Moutai.
Export foreign exchange earnings are more than 10 million US dollars.
The process of Moutai wine is complex, and the selection of materials is exquisite. It must be sorghum and wheat around the town of Maotai. The water is the water of the Chishui River.
The craftsmanship of Moutai wine is both ancient and scientific, and it is a strange flower of the mainland ethnic winemaking industry.
Moutai liquor is a high-grain liquor, about five kilograms of grain make one kilogram of wine, of which sorghum accounts for 2.4 kilograms and wheat accounts for 2.6 kilograms.
Let's take a look at the risks of going public on page P23.
1. The trademark of Moutai is owned by the group. Moutai needs to pay annually with the group to use the trademarks "Kweichow Moutai", "Moutai", "Guizhou", "Moutai Queen", "Handi Moutai Wine", "Moutai MOUTAI", "Moutai Prince", and "Moutai Immortal". The amount is not less than 1% of sales and not more than 2% of sales.
2. The group has old wine resources in hand, and needs to buy with the group, worried about the price increase of the group. Signed an agreement to acquire all old wines by 2005.
3. The group is a major shareholder, which may harm the interests of minority shareholders.
4. The trademark "Feitian" belongs to Guizhou Grain and Oil Import and Export Company. Although the agreement has been signed and can be used, there will be hidden dangers if it is not allowed to be used one day.
5. The product structure is relatively single, the main product is "Kweichow Moutai", the strategy is to increase market share, and increase the development of low-grade wine, develop health wine, and expand the business scope.
6. There are too many fake and shoddy products, and counterfeiting needs to be combated. Establish fidelity channels such as specialty stores.
7. Human resource risk, located in remote Guizhou, it is difficult to attract better talents.
8. Raw materials and price risk. The strategy is to implement the "company + farmer" and "order farming" model.
9. Brand risk. Building a good brand takes time, and ruining a good brand can be instantaneous. Therefore, it is more necessary to maintain well.
10. Risks in the use of funds raised by listing. Due to the long production cycle of Moutai, the investment income is uncertain.
11. Rely on major customers. The sales of the five largest dealers account for approximately 13% of the company's total sales.
12. Natural environmental risks. Moutai wine can only be produced in Moutai Town, so the local environment is very important.
13. Economic cycle risk.
14. Security risks. Wine is a flammable item, fire safety should be done.
15. Flooding natural disaster risk.
16. Industrial policy risks.
17. Risk of decline in return on equity. (This is obviously a numerical risk)
18. Stock market risk. (Think of investing in stocks as part of buying a company)
Moutai puts quality management in a very important position. I think that Moutai can be so sought after because of its quality. Quality control, one by the instrument, the other by the tongue of an excellent sommelier.
Good quality has created numerous awards for Moutai at home and abroad.
There are 2 core technologies of Moutai, one is the traditional production process. The second is the blending technology of its Moutai wine. Coupled with the unique geographical climate of Moutai Town. This is an insurmountable technical barrier for other imitators.
In 20 years, Moutai Prince Wine was launched. Moutai welcome wine is currently being developed. Moutai wine, prince wine, welcome wine, the three form high, medium and low three grades of liquor.
It is also developing Moutai microcomputer blending technology to improve the blending rate and production volume with the help of science and technology.
Next, let's look at the problem of intra-industry competition.
Intra-industry competition is the group company, Kweichow Moutai Distillery Technology Development Company, Xijiu, Beer Co., Ltd. among the affiliated enterprises. There may be competition among these few.
The group has already transferred the production packaging to the joint-stock company, and there is no competition
Technology development companies and Xijiu companies produce a series of fragrant liquor, and the market is positioned for ordinary consumers. Hemoutai is positioned as a sauce-fragrant liquor for mid-to-high-end consumers. There is no direct competition with them.
Beer and liquor are not in direct competition.
Related Party Transactions
1. In 2000, the comprehensive service fee of the group was 2.03 million yuan per year.
2. In 2000, the land lease fee was 2.06 million.
3. In 2000, the housing lease was 4.39 million.
4. In 2000, 343.13 tons of old wine were purchased and 63.2 million yuan were paid. Thereafter, the price rose by 4% per year. The average per catty of old wine is 92.1 yuan.
Old wine agreements are exclusive and can only be sold to joint stock companies, not to other companies. The Group must supply the old liquor of the joint-stock company at all times.
5. In 2000, the patent transfer fee was 1.02 million.
6. Pay trademark royalties every year, 2% of sales in 2000. A total of 14.37 million was paid.
7. Xijiu supplies sauce base wine and strong fragrant base wine to Prince Wine. Sauce base wine 5000 yuan / ton (tax included), strong aroma base wine 3000 yuan / ton (tax included).
8. Related party transactions with dealers.
Among these related party transactions, the most influential is the purchase of old wine.
After listing, the joint stock company will purchase the remaining old liquor of the group in batches using the funds raised. The annual price per 500 grams is 95.78, 99.61, 103.6/107.74. It is indeed based on the price requirement of 4% annual growth. These will cost around 880 million yuan.
Let's take a look at the resumes of these executives of Moutai.
I'm more concerned about their annual salary. In 2000, Yuan Renguo's annual salary was 134,000. Such an annual salary is in charge of a company with an annual revenue of 1.14 billion yuan and an annual profit of 250 million yuan.
Looking at the annual salary of that group of people, it is not high. The annual salary of core technical personnel is only 36,200. Although it was the level of 2000.
Moutai Group is a state-owned enterprise in Guizhou Province, and there are no executives involved in share restructuring and equity incentives.
Next a bunch of board rules, just skip. Let's take a look at Moutai's financial statements.
Let's take a look at the income statement first
Simplify the balance sheet
Moutai's balance sheet is excellent, basically cash. There is nothing to receivable, there is a large amount of pre-collection. It shows that the wine sold is all paid before the goods, and there is a small part of interest-bearing liabilities. It may be to borrow money from local banks.
Next, let's take a look at the cash flow statement. Moutai's cash flow portrait is "+ - -". Cow type.
The next prospectus also gave us a very intimate summary of the performance of the three years.
Looking at this growth, it is very gratifying.
The majority of the company's commodity is still Moutai wine. It accounted for 98.24% of revenue. Prince wine and other alcoholic revenue, accounting for 1.76%.
This interest-bearing liability of the company. Borrowed 3 banks. Borrowing time is concentrated in the fourth quarter. Why borrow this 129 million? Moutai cash is 460 million. On the following page p144, it is said that it is the purchase of raw materials, raw materials and money borrowed for capital turnover.
In May 2001, the state implemented a compound tax increase on liquor. That is, on the basis of the original ad valorem taxation, and then the ad valorem taxation. However, for high-end liquor, the tax of 0.5 yuan per catty is not much.
However, the policy that the purchase of wine can be deducted by the production enterprises of the purchased wine can be deducted from the consumption tax paid by the purchased wine. It should still have an impact on Moutai. After all, you have to buy old wine from the group. Prince Wine and Xi Jiu buy base wine.
This will reduce Moutai's net profit by about 9 million in total.
The prospectus also gives a very intimate forecast for next year's performance. (The detailed forecasting process is available in the appendix.) In 01, the revenue was 1.39 billion yuan, and the net profit was 330 million.
Moutai's development strategy: based on the industry, the funds raised are mainly invested in the production technology transformation and marketing team construction of Moutai. Based on the main business, the development of Moutai wine and series wine. Caution (these 2 words are well said) involves related industries.
The development goal is to achieve sales revenue of 2.9 billion yuan by 2005.
Market development and marketing network construction. It also thinks of reducing the launch of Feitian (mainly Feitian goods are not owned by Moutai) and increasing the promotion of the golden wheel. Waiting for the opportunity to acquire the Feitian trademark.
At present (01) Moutai production scale of 4000 tons / year, strive to 05, Moutai wine 10,000 tons / year, series wine 5000 tons / year.
Moutai issued 7,150 shares at an issue price of 31.39 yuan. Raised 2.24 billion yuan. After deducting the income from the issuance of state-owned treasury shares and the issuance expenses, the actual funds raised were 1.996 billion yuan.
These funds are mainly used for the technical transformation and expansion of Moutai wine, the reconstruction and expansion project of medium and low wine, the reconstruction and expansion project of 2200 tons of koji making, the supporting project of storage facilities, the expansion and supporting project of Moutai series wine, the acquisition of Xijiu sauce aroma assets and supporting technical transformation, the acquisition of the group's old wine and so on. These are expected to cost 1.937 billion. The rest of the money serves as liquidity.
In 2000, the national liquor production and sales volume was 5 million tons. Moutai sold a total of 3,440 tons, less than one-thousandth of the total production and sales.
The liquor industry is a key support industry in Guizhou Province. At the same time, liquor needs food, which also contributes to the development of the old revolutionary area.
Moutai believes that the low degree of liquor is a trend, so the technical transformation project of medium and low Moutai is very necessary.
Next, it is demonstrated that after raising funds, these projects are imminent and need to be done.
One of the things that attracted me was a saying of Moutai Prince Wine. The group of people who like Prince Wine are waiting for the income to increase, and they are the direct customers of Moutai. Moutai has always focused on the production and sales of Moutai.
Moutai wine is a high-end product in baijiu, the price is not low, which invisibly sets up consumption barriers for most consumers.
The launch of Moutai Prince Wine continues the traditional style of Kweichow Moutai wine sauce and elegant taste, has formed an extension of the quality of Kweichow Moutai wine, can win a considerable number of Moutai wine admirers, and by the group of radiation effect, for the sauce fragrant wine to win more consumers and preferences, the time is ripe, the group is very likely to become the direct consumers of Moutai, thereby striving for potential consumer groups for Moutai.
These should be the better wine companies on the market in 2001. The boss of that meeting is Wuliangye.
Then there is the valuation, how the stock price of Moutai was obtained. I'll skip that part.
Then there is a major contract. It is basically the trademark, land rent, office building rent, old wine purchase and other agreements mentioned above. To use Feitian's trademark, one condition is to exchange wine for the right to use the trademark. Another is short-term borrowing, which is mostly used to buy raw materials and capital turnover.
Let's look at the appendix of the Moutai prospectus. This is also searchable on the Great Tide Information Network.
This appendix is a note to Moutai's financial statements.
Moutai is going public, and it needs to re-audit the financial statements and prepare them in accordance with the standards of the joint-stock company.
First, let's look at the provision for bad debts. This is a relatively strict provision. According to this provision method, the profit in 99 years was reduced by 900,000 yuan.
The type of tax payable by the company.
Then look at the notes to the balance sheet.
Monetary funds, mostly bank deposits. Notes receivable are bankers' acceptances, safe. Accounts receivable are 50 million, not much, and most of them are within one year. The main reason is to help dealers tide over difficult times. Other receivables were 0.1 billion.
The advance payment is also not more than 20 million, mainly for base wine and packaging materials.
Inventory 510 million. It's all treasure.
The main reasons for the large inventory balance are that:
(1) According to the characteristics of the company's product production process, the self-made semi-finished products produced in that year must be stored for a long time (at least three years), so the number of self-made semi-finished products rolled over is large.
(2) Our company's production cycle is from October to September of the following year, so at the end of the current year, we must reserve a large number of raw and auxiliary materials for the next year's production.
(3) The beginning of the following year is our company's sales season, so at the end of this year, we must purchase a large number of packaging materials for the next year's packaging production.
From this passage, we can see. Bulk purchases of raw materials in the fourth quarter. So money is needed at this time. At the end of the year, it is also necessary to purchase packaging materials in large quantities to cope with the sales of the Spring Festival. So money is also needed. Just right, there was more short-term borrowing in the fourth quarter.
It is interesting here, and the wine altar is listed as a long-term amortization fee. The reason is that the amount of wine is less than the fixed assets, but the use is large, and it is included in the long-term amortization expense. Amortized monthly at $5 per ton of inventory at the end of the month.
The advance receivables were 385 million, and the customer was worried that he could not buy alcohol, so he paid first.
In terms of cracking down on counterfeiting, Moutai pays real money to fight counterfeiting. It is also the strong anti-counterfeiting efforts that stabilize the brand of Moutai wine on the market. At the same time, it is also a silent advertisement. Only good products, everyone wants to imitate, all want to fake.
The gross profit margin of 20-year Moutai was 82.23%. Not bad, not bad. It will be higher later.
Next, I talked about some related party transactions, which have been discussed before, and I will talk about them again.
Next, let's look at Moutai's 01 profit budget.
Moutai makes a budget at the beginning of each year, and Mr. Tang said that basically according to this budget, the profit of the year can be calculated. So Moutai is a clear card. In 01, Moutai's revenue increased by 25%, and the net profit margin increased by 30.59%. The detailed argumentation process is set out in the appendix.
The following table intuitively shows that Wuliangye's revenue that year was 3.55 times that of Moutai. The net profit is 3 times that of Moutai. Among these companies, Moutai has the highest gross profit margin. Luzhou Old Cellar is second.
This is followed by the demonstration process of the project for the use of the raised funds.
Page P126 contains the production process of medium and low Moutai wine. This is a comprehensive reduction of factory Moutai wine and round wine, and stored for 6 months after packaging the factory.
Well, let me briefly sort out the study notes of the prospectus.
1. Why should Moutai go public?
Moutai went public to solve the problem of funding. Use funds to build marketing network construction, purchase liquor, carry out technological transformation, productive transformation and expansion, and so on. These are all important aspects that help the development of Moutai.
The listing of Moutai has increased its popularity. The brand is further enhanced.
After listing, Moutai's assets are clearer and can be subject to public scrutiny. There will be more transparency on the financial side. I think that's the most critical point.
2. How much money is raised by Moutai's listing.
71.5 million shares were issued at a price of 31.39 yuan. The funds raised amounted to 2.24 billion yuan, and after deducting expenses, it was actually 1.996 billion yuan.
3. Liquor market situation
In 2001, there were 37,000 liquor enterprises. There are 4,870 independently accounted for at or above the township level. The output of liquor is 5 million tons, with an output value of 35 billion yuan. (an average of 7,000 yuan a ton, 3.5 yuan a catty) The market has changed from a seller's market to a buyer's market.
Baijiu is labor-intensive. The technical content is not high. However, the level of industrialization has increased, and the level of mechanization has increased.
Famous wines dominate the market. Famous wines account for about 10% of wine production. With the upgrading of consumption, the demand for wine grade has developed from low to high.
Baijiu is characterized by low industry barriers. The production cost is low, and there are a large number of substitutes for liquor. Intangible assets such as product quality and brand are the most important assets of an enterprise.
4. What are the advantages of Moutai
a. Brand advantage, the title of national wine.
b. The core technology of Moutai has 2, one is the traditional production process. The second is the blending technology of its Moutai wine. Coupled with the unique geographical climate of Moutai Town. This is an insurmountable technical barrier for other imitators.
c. Moutai attaches importance to quality. After reading the entire prospectus, Moutai attaches great importance to its quality. It is Moutai's strict requirements for quality and the pursuit of quality that create the myth of Moutai.
5. What are the risks of Moutai?
a. Trademarks belong to the Group.
b. Old wine resources are in the hands of the group
c. The majority shareholder of the group may harm the interests of minority shareholders
d. Feitian trademark is also not in the joint-stock company, in Guizhou Province Grain and Oil Import and Export Company. (This last purchase was also a twist and turn.) In 04, I bought a foreign flying sky for use. The domestic Feitian trademark is very tortuous. Grain and oil companies and some wineries put up flying signs, disrupting the market. Later, he also used the Feitian trademark as a mortgage. The loan is not repaid, and the creditor wants the trademark right to Feitian. It wasn't until 11 years that I really owned the trademark rights to Feitian)
e. Single product structure.
Wait a minute.
6. Competitor situation
Wuliangye, fragrant boss. In 00, Wuliangye's revenue was 3.55 times that of Moutai. The net profit is 3 times that of Moutai. Among these companies, Moutai's gross profit margin reached 82.33%. Luzhou Laojiao followed with 67.62% and Wuliangye with 51.16%.
7. Upstream of Moutai
Moutai wine produces 2.6 kilograms of wheat + 2.5 kilograms of sorghum to produce 1 kilogram of wine. Moutai's grain is all local food. Guizhou is poor, and those farmers are happy to sign a contract with Moutai to supply Moutai grain. Moutai also gives them the attribute of driving them to increase their economic income. Raw materials are hardly a problem.
8. Moutai market conditions
The scarcity of Moutai. In the 21st century, China's economy has grown by leaps and bounds, and the people's living standards have greatly improved. Business, self-drinking, banqueting. High-end liquor has a lot of room for development.
Teacher Tang summarized why Moutai's revenue will continue to increase.
1. It is human nature to be thrifty from luxury to thrift, and to be thrifty to luxury.
2. The addiction of alcohol, increase the experience threshold, that is, in the long run, to achieve the same degree of slight drunkenness, the required amount will increase slightly.
3. In the comparison between you and me in social communication, the return etiquette needs to ensure that the specifications are ≥ the specifications of the invitation, and the round-trip alternately.
4. The selection of wine is always based on the most important guest taste. Usually the most important guest of honor is often the highest level of consumption or will consciously use the wine bureau to improve their consumption specifications, which is also human nature.
5. Consumption upgrades brought about by income increase.
6. 100% determined long-term inflation in the era of fiat currency.
9. If you went back to 2001, would you buy Moutai?
After listing, Moutai has a total of 250 million shares, at 31.39 yuan per share. The market capitalization is 7,847.5 million. The net profit for 01 is forecast to be 330 million. According to a 20% increase. The profit in 04 was 570 million. Give a 30x P/E ratio of 17.1 billion. Then it was cut to 8.55 billion.
From the perspective of the time, it was worth buying.
Well, the prospectus is here, thank you friends for their patience and encouragement all the time. Arch the day and meet a better self