Since reaching its peak in September 2021, the share price of Drunkard Wine has begun a volatile downward path, and the cumulative decline has exceeded 60% so far, along with the stock price, as well as the company's performance.
In the first half of this year, the consumer market recovered, according to the incomplete statistics of the reporter of "International Finance News", most liquor listed companies achieved a rise in performance, while Shuijingfang and drunkard wine became a rare "bad student" in the first half of the year, and the latter had the first negative growth in interim results in seven years.
(Liu Xingyu, watchmaking)
Net profit attributable to owners fell by 41.23%
Recently, Drunkard Wine released a half-year report, during the reporting period, the company achieved operating income of 1.541 billion yuan, a year-on-year decrease of 39.24%; The net profit attributable to the parent was 422 million yuan, a year-on-year decrease of 41.23%.
Among the 21 listed liquor companies, Drunkard Liquor had the highest revenue decline, and the decline in net profit attributable to the parent was second only to Shuijingfang. Shuijingfang achieved an operating income of 1.527 billion yuan in the first half of the year, a year-on-year decrease of 26.38%; The net profit attributable to the parent was 203 million yuan, a year-on-year decrease of 45.15%.
This is also the first time since 2017 that the interim performance of Drunkard Liquor has declined.
In fact, since COFCO became the majority shareholder of Drunkard Liquor in 2015, the company has grown rapidly. In 2015, the revenue of Drunkard Wine was only 601 million yuan, and the company's revenue has exceeded the 3 billion yuan mark in 2021 and reached 4.05 billion yuan in 2022.
In the first half of this year, the growth of alcoholic liquor performance stopped sharply, and the reflection on the business side was more intuitive.
The liquor products of Drunkard Liquor mainly include internal reference series, Drunkard series, Xiangquan series and other series, and the sales volume in the first half of the year decreased significantly, respectively 450 tons, 3019 tons, 597 tons, 1373 tons, down 21.23%, 28.83%, 80.9%, 21.36% year-on-year.
It is not difficult to see that the sales of the product line of alcoholic liquor have fallen across the board, and the overall "can't sell".
Corresponding to revenue, the drunkard series achieved revenue of 846 million yuan in the first half of the year, down 42.46% year-on-year, accounting for 54.88% of the total revenue; The revenue of the internal reference series was 441 million yuan, down 31.67% year-on-year, accounting for 28.64%; The Xiangquan series and other series decreased by 76.69% and 17.15% respectively year-on-year.
From the perspective of gross profit, the gross profit margin of the ginseng and alcoholic series in the first half of the year declined, the former gross profit margin was 90.85%, down 1.55 percentage points year-on-year; the latter's gross profit margin was 79%, down 0.55 percentage points year-on-year.
In fact, in the first quarter of this year, the performance of alcoholic liquor has declined, with revenue of 965 million yuan in the quarter, down 42.87% year-on-year; The net profit attributable to the parent was 300 million yuan, down 42.38% from the same period last year. At that time, Drunkard Wine said that the main reason for the decline was, on the one hand, the high performance base in the same period of the previous year; On the other hand, the company took the initiative to carry out expense reform this year, and the focus of expense investment shifted from the channel end to the terminal, strengthening terminal sales, which led to fluctuations in performance to a certain extent in the short term.
Haitong Securities said in a research report in May that drunkard liquor is facing the problem of declining wholesale prices and destocking in the short term. In addition, the company's channel reform since 2022 has caused a lack of dealer confidence and delayed payments, which has also affected short-term performance.
Inventories are high
Drunkard Wine currently seems to be caught in an unsolvable cycle, channel reform is one of the reasons for the decline in the performance of Drunkard Liquor, and channel reform may be to solve the problem of high inventory of the company.
The "2023 China Liquor Market Mid-term Research Report" released by the China Liquor Industry Association pointed out that since the beginning of this year, the channel inventory of liquor enterprises has been high and sales are slow, and destocking has become the primary task of the industry, and major liquor companies are facing greater pressure.
Drunkard liquor is no exception.
The financial report shows that from 2020 to 2022, the inventory of finished wine of alcoholic liquor climbed from 2993 tons to 7375 tons, and the inventory more than doubled in 2 years, of which the internal reference series increased from 632 tons to 1347 tons, and the alcoholic series increased from 1368 tons to 5150 tons.
In the first half of this year, the company's finished wine inventory was 5,708 tons, and the inventory was still greater than the current sales volume under the condition that the production of the internal reference series and the alcoholic series was halved. In particular, the internal reference series sold 450 tons in the first half of the year and the inventory was 1344 tons.
In addition, while the inventory is increasing, the number of distributors of the company has also shown explosive growth in recent years.
At the end of 2019, the number of dealers of alcoholic liquor was 528, and 235 to 763 were added at the end of 2020; By 2022, the number of dealers of alcoholic liquor will reach 1586. In the first half of 2023, the number of dealers of alcoholic liquor was 1,774, an increase of 188 from the end of 2022.
With the increase of distributors, coupled with the pressure of inventory, it is inevitable that there will be goods channeling and upside down in the market.
At the 2022 results briefing held in May this year, deputy general manager Wang Zhe said that the company is comprehensively controlling market channeling and low prices, and there is no plan to increase prices.
At the Liquor Innovation Trend Conference held in July, it further stated that all liquor distributors in China or all trading companies and merchants selling baijiu have changed their mentality towards selling baijiu in the past six months to one year. The reason behind this is that the price problem causes the dealer to have no profit, and thus no confidence in the future.
Since last year, Drunkard Wine has made a series of reforms to address the inventory problem. This year's interim report shows that under the premise of keeping the overall cost investment ratio unchanged, the company drives the effective linkage of the B end and the C end through bottle opening and code scanning activities, which not only stabilizes product prices, but also increases consumer demand for bottle opening, and further promotes channel inventory digestion.
One problem is that while drunkard liquor carries out channel reform, it will also affect the interests of distributors.
Haitong Securities Research Report pointed out that the implementation of channel reform by drunkards has shifted 70%-80% of channel fees to consumer sales and incentive activities, making dealers lack confidence and delaying payments.
In the first half of the year, the contract liabilities of alcoholic liquor were 448 million yuan, compared with 558 million yuan in the same period last year, down 19.5% year-on-year, and the contract liabilities in the same period of 2021 were 872 million yuan.
In June 2022, Wang Hao, chairman of Drunkard Wine, said at the shareholders' meeting, "According to our established strategy, the future 10 billion (sales revenue) is by no means a dream." ”
According to the current performance, the "tens of billions of dreams" of drunkard wine are obstructed and long.
Trainee reporter: Liu Xingyu
Editor: Zuo Yu
Responsible editor: Bi Dandan