The market value has evaporated by more than 60 billion! Performance is falling, inventories are rising, and the drunkard's wine "bubble" is bursting?

As a major "dark horse" in the liquor industry, Drunkard Wine has achieved extremely bright performance from 2019 to 2021, especially in terms of stock prices, in just three years, Drunkard Wine has climbed from the lowest 13 yuan / share to the highest 275.59 yuan / share, and the stock price has risen as much as 20 times, which is enough to "stand out".

However, since entering 2022, the share price of Drunkard Liquor has begun to fall, which is very different from its previous performance.

As of the close on June 7, Drunkard Wine closed at 86.45 yuan / share, and the stock price has plummeted by more than 40% in four months; If calculated from the highest point of 275.59 yuan / share, the share price of Drunkard Wine has fallen by about 70%, and the market value has evaporated by more than 60 billion.

As the liquor industry enters a downward cycle, the stock prices of major wine companies have been adjusted, so it is reasonable for the stock price of alcoholic liquor to recover; However, according to Kanjian Finance, compared with other wine companies, the stock price of alcoholic liquor has fallen significantly more and its performance is weaker. Why is the once "dark horse" of the industry now in a situation of endless falls? Behind the continued decline in stock prices, is there anything wrong with the fundamentals of alcoholic alcohol?

Booms and setbacks

In the 90s of the 20th century, there were four "business cards" in Xiangxi, Hunan - Shen Congwen's book, Song Zuying's song, Huang Yongyu's painting, and drunkard's wine.

The predecessor of Drunkard Wine is the first brewery in Xiangxi Prefecture, Jishou Distillery, which was first established in 1956. Subject to the era and regional factors, the main products of Jishou Distillery at that time were only sweet potato roast and dried potato wine, compared with large distilleries such as Fenjiu and Wuliangye, Jishou Distillery was just a little-known small distillery.

In 1970, Jishou Distillery welcomed the "soul figure" Wang Xibing. Under the leadership of Wang Xibing, Jishou Distillery developed rapidly and soon rose to become the largest distillery in Hunan, at that time, the distillery's main brand "Xiangquan" wine was quite popular in Hunan, but due to the lack of historical heritage, "Xiangquan" was still difficult to compete with Moutai and Wuliangye.

In 1978, Jishou Distillery waited for a second "key figure" - Huang Yongyu. As a well-known artist from Xiangxi, Huang Yongyu designed a packaging with great cultural characteristics of Xiangxi for Jishou Distillery - Drunkard Picture, and the "Drunkard" brand was also born. Unexpectedly, the drunkard liquor under the new packaging quickly exploded after its launch, and the distillery also began to enter the reform, restructured into Hunan Xiangquan Group Co., Ltd. in 1996, and the drunkard liquor was successfully listed on the A-share market in 1997.

In 1998, Drunkard Liquor ushered in the "peak moment" since the establishment of the distillery - at that time, each bottle of Drunkard Liquor sold for more than 300 yuan, crushing Feitian Maotai, Wuliangye, Jiannanchun and other high-end liquors; With the explosion of drunkard wine, the net profit of the distillery surpassed Moutai, becoming the second in the industry after Wuliangye; However, the glory of the drunkard wine is also coming to an end, and everyone did not wait for the drunkard wine to successfully surpass Wuliangye, but waited for a long struggle and suffering.

At the end of 2000, Wang Xibing, who had been in charge of Drunkard Wine for more than 20 years, resigned, and Drunkard Wine ushered in the "darkest moment" of fifteen years. During this period, Drunkard Wine was put on the "ST" hat three times because of consecutive losses, and then experienced the "plasticizer" incident and the "disappearance of 100 million yuan funds" cases. In addition, the major shareholders of Drunkard Wine have also changed frequently, from Xiangquan Group to Chenggong Group, and then to Huafu Group and COFCO Group, and more than ten chairmen have changed in just 15 years.

The turning point in drunkard wine came in 2015. The previous year, with the merger of Huafu Group, the parent company of China Sugar, into COFCO Group, COFCO became the actual controller of Drunkard Wine; After entering the drunkard wine, COFCO quickly carried out a series of reforms on drunkard wine, first drastically reducing the number of drunkard liquor items, and then further optimizing and upgrading the brand, focusing on the three major brands of internal ginseng, drunkard and Xiangquan.

"Foam" pierced?

In 2015, after COFCO took over, the alcoholic liquor began to recover rapidly after a series of reforms.

According to the financial report, in 2014, the revenue of drunkard liquor was only 388.5 million, and the net profit was a loss of 97.48 million; and in 2022, 8 years later, the revenue of drunkard liquor has climbed to 4.05 billion, more than 10 times that of 2014, and the net profit has also increased to 1.049 billion, which is a world away from that year.

With the recovery of performance, the share price of Drunkard Wine also began to recover. In terms of a long cycle, the stock price of alcoholic liquor began to stop falling and stabilize in 2014, followed by a slow recovery in the following 4 years, and began to usher in an explosive period after 2019. According to statistics, in just three years, the stock price of Drunkard Liquor has climbed from the lowest 13 yuan / share to the highest 275.59 yuan / share, and the stock price has risen as much as 20 times, and the strong stock price performance is enough to make it "stand out" in the entire liquor sector.

It is undeniable that in the past few years, both the performance and the stock price of Drunkard Wine are "perfect", but it is somewhat similar to Shanxi Fenjiu - behind the high growth performance of Drunkard Wine over the years, it is actually done by greatly increasing dealers and letting dealers press goods, according to statistics, the distributors of Drunkard Wine in 2019 were only 528, but by 2022 it surged to 1586.

On April 28, Drunkard Wine disclosed its results for the first quarter of this year. According to the financial report, the revenue of alcoholic liquor in the first quarter was 964.6 million, down 42.87% year-on-year; The net profit was 300 million, down 42.38% year-on-year, and both revenue and net profit declined. With the disclosure of this financial report, the high-growth "bubble" blown by alcoholic liquor over the years has also been officially pierced, and problems such as high inventory, difficult to digest products, and serious pressure by distributors have also begun to slowly emerge.

According to the financial report, from 2019 to 2022, the inventory of Drunkard Liquor Company climbed from 3,460 tons to 7,375 tons, and the inventory more than doubled in 3 years; From the inventory data, the inventory of alcoholic liquor in 2022 is 1.417 billion, which is a new high in recent years, and in the long cycle, the inventory of alcoholic liquor in 2018 was only 820 million, and then increased to 930 million, 1.027 billion, 1.269 billion and 1.417 billion respectively year by year, and the inventory showed a trend of higher year by year.

In addition, according to media reports, in 2022, in addition to the Xiangquan series, the production volume of alcoholic ginseng, alcoholic ginseng, and other series is significantly greater than the sales volume. Taking the internal reference series as an example, the annual production volume reached 1580 tons, and the sales volume reached 1147 tons; The ending inventory reached 1,347 tons, which has exceeded the annual sales volume; Affected by factors such as high inventory and serious pressure by distributors, the product price of alcoholic liquor is gradually out of control, and the price of the inner ginseng wine distributor channel with a factory price of more than 1,000 yuan is only about 800 yuan per bottle.

And the high-growth "bubble" was pierced by the share price of alcoholic liquor.

In the past two years, the stock price of Drunkard Liquor has fallen endlessly, as of the close of June 7, Drunkard Liquor closed at 86.45 yuan / share, and the stock price has plummeted by more than 40% in the past four months; If compared with the highest point of 275.59 yuan / share on September 27, 2021, the share price of Drunkard Wine has fallen by about 70%, and the market value has evaporated by more than 60 billion.

High-end is the key to breaking the game?

In fact, the problems faced by alcoholic liquor today are common throughout the liquor industry.

Because the sales of liquor generally adopt the distributor model, if you want to expand, the first step of wine companies often chooses to greatly expand distributors, the second step is to set the performance of distributors and supply them, but if these products cannot be sold in the end, distributors will have the phenomenon of pressing goods, and as the pressure is increasing, wine companies will eventually be eaten back - light product prices are out of control, more serious is that distributors no longer cooperate, wine companies inventory more and more.

From this point of view, the key to solving the problem of alcoholic liquor is to sell the product, and if you want to sell liquor, making the product high-end is a key step.

In fact, since 2018, drunkard liquor has been preparing for high-end. At that time, more than 30 large distributors of high-end liquor across the country jointly funded the establishment of Hunan Neiseng Liquor Sales Co., Ltd., which was completely independent of Drunkard Liquor Co., Ltd. in terms of equity relationship, and exclusively sold Neijiu brand; In 2019, Neiseng Liquor started the process of nationalization, playing the slogan of "one of the four independent brands of high-end liquor in China", and the products were directly benchmarked against "Mao Wulu".

In terms of price, Neiseng wine is directly on par with Feitian Moutai, in 2021 alone, Neiseng wine has adjusted its price four times, of which since January 20, 2021, 52 degrees 500ml Neiseng wine began to implement the recommended price system of drunkard wine, the recommended price of group purchase is 1350 yuan / bottle, and the retail recommended price is 1499 yuan / bottle, and the price has soared.

However, it is obviously not so easy to achieve premiumization. In essence, drunkard wine belongs to the Futu type wine, which is a subdivided aroma type, compared with the sauce aroma of Kweichow Moutai and the strong aroma of Wuliangye, it is far from the consumer group and consumer recognition; In addition, although drunkard wine used to be a "business card" in Xiangxi, Hunan Province, the local recognition in Hunan is not high, and the provincial market share of drunkard liquor in 2022 is only 7.5%, which is far from the market share of more than 40% of Fenjiu.

Looking back now, the high-end of alcoholic liquor lacks the support of market recognition, and blindly increasing prices will only make the product more and more difficult to sell, and eventually lead to the emergence of the "dilemma" situation of dealers pressing goods seriously and their own inventory is high. Of course, in order to enhance product awareness, Drunkard Liquor does not hesitate to increase its investment in advertising, according to the financial report, the sales expenses of Drunkard Liquor in 2022 will be as high as 1.024 billion, and its total operating cost will only be 2.642 billion, accounting for 38.8% of sales expenses.

However, any high-end liquor can not be made through advertising, it needs to be completed through a long period of cultural accumulation, which shows that drunkard liquor wants to get out of the predicament through high-end, and it may take a long time to accumulate.