Image source: Zheng Tanjun in Chengdu, Sichuan Province, December 2022
Entering December, liquor companies have also entered a performance sprint period, driving sales through various Spring Festival activities.
For example, on December 10, Shede Liquor announced the launch of Jiachen Dragon Year Shede Zodiac Liquor. According to the information on the official channels of Shede Liquor, the suggested retail price of 54% vol and 500ml/bottle of Shede Dragon Year Zodiac Liquor is 698 yuan, with a limited sales of 100,000 bottles.
In addition to making efforts on the product side, Shede Liquor Industry has also made continuous efforts in channels and C-end consumers. For example, it is expected to complete the construction of more than 30,000 terminal stores in more than 300 cities across the country.
Behind the preemptive New Year offensive, it is not difficult to see the anxiety of Shede Liquor Industry for performance development. According to the financial report, from 2018 to 2022 and in the first three quarters of this year, the attributable net profit of Shede Liquor increased by 138.05%, 48.61%, 14.42%, 114.35%, 35.31% and 7.93% year-on-year respectively. In recent years, the slowdown in the performance growth of Shede Liquor has been very obvious.
In the fiercely competitive liquor industry, what kind of new story can Shede Liquor tell in the industry?
01
The growth rate of performance has slowed down
There is a famous saying in the capital market: money is always the smartest. In fact, since the beginning of this year, investors have been very sensitive to the fluctuations in the stock price of Shede Liquor. This trend has been particularly pronounced since the beginning of December.
On December 14th, an investor asked Shede Liquor: "Every day in the bottom of the plate, isn't the company worried that the stock market will be unfavorable to the downstream?" On December 8th, an investor asked that Shede Liquor has continued to fall sharply, how is the company's operation in the third and fourth quarters? On December 5th, some investors bluntly said that the company's stock price has fallen to the low area of nearly three years.
Wind data shows that as of the close of trading on December 15, 2023, the share price of Shede Liquor was 89.24 yuan / share, and at the close of trading on July 21, 2021, the share price of Shede Liquor was as high as 251.13 yuan / share, and the stock price fell to almost one-third of two years ago, no wonder investors have emotions.
On December 14, Shede Liquor responded to investors that the stock price is affected by multiple factors such as macroeconomy, market environment, and investor expectations, and the company will continue to maintain good communication with the capital market while doing a good job in production and operation.
In fact, behind the stock price changes, it also reflects some unsatisfactory performance development of Shede Liquor in recent years.
In fact, it is not difficult to find that the big fluctuations in the stock price of Shede Liquor began in 2020. On December 31, 2020, Yuyuan Co., Ltd., a subsidiary of Fosun Group, announced that according to the company's development strategy, the company successfully bid for 70% of the equity of Sichuan Tuopai Shede Group (hereinafter referred to as "Shede Group") at a price of 4.53 billion yuan, and Shede Group holds 29.95% of the equity of Shede Liquor. Since then, Shede Liquor has gradually bid farewell to the "Sky Ocean System" and ushered in the era of the "Fosun System".
According to the financial report, in 2021, on the basis of adhering to the dual brand strategy of "Shede" and "Tuopai", Shede Liquor will sort out and improve the company's product system, focusing on creating strategic products such as taste Shede, wisdom Shede, collection Shede, Shezhidao, Tuopai Qujiu, Tuopai Special T68, Tuopai Liuliang, etc. In addition, the company continues to strengthen its brand building efforts. The hot dramas "Little Shede" and "Beautiful Days" we are chasing all have product placement advertisements for Shede Liquor.
This year is also a year of rapid progress in the performance of Shede Liquor. In 2021, the operating income of Shede Liquor was 4.969 billion yuan, a year-on-year increase of 83.8%, and the net profit attributable to shareholders of listed companies was 1.246 billion yuan, a year-on-year increase of 114.35%. You must know that in 2020, the growth rate of attributable net profit of Shede Liquor will only be 14.42%.
However, the "honeymoon bonus" on both sides does not seem to last long. In 2022, the operating income of Shede Liquor will be 6.056 billion yuan, a year-on-year increase of 21.86%, and the net profit attributable to shareholders of listed companies will be 1.685 billion yuan, with a growth rate of 35.31%.
This year, the slowdown in the performance growth of Shede Liquor has become more obvious. According to the financial report, in the first three quarters of this year, the operating income of Shede Liquor was 5.245 billion yuan, a year-on-year increase of 13.62%, and the net profit attributable to shareholders of listed companies was 1.295 billion yuan, a year-on-year increase of only 7.93%.
The rapid decline in performance growth has also made investors full of questions: what happened to Shede Liquor?
02
The road to premiumization is difficult
To explore the performance development of Shede Liquor, it is necessary to analyze the company's development strategy and the market environment it faces.
As one of the "Six Golden Flowers of Sichuan Liquor", Shede Liquor is an important representative of strong aromatic liquor. In 1996, Shede Liquor became the third listed company in the liquor industry.
The core brands of Shede Liquor include "Shede" and "Tuopai". According to the company's introduction, the company focuses on the mid-to-high-end liquor market, and plans to build "Shede" into the first brand of old liquor and the leader of the sub-high-end price range. At the same time, the company is committed to building "Tuopai" into the most cost-effective popular liquor brand. In addition, the company is also cultivating ultra-high-end liquor brands "Tianzihu", "Reluctant" and "Swallowing" and mid-range liquor brands "Intoxicated".
According to the information of the official mall of Shede members, the price of a bottle of 53 degrees 500ml sauce flavor Tianzihu is 12,999 yuan, and the price of a bottle of 53 degrees 750ml swallow is 2,980 yuan. In the Shede brand series, the price of a bottle of 52 degrees 500ml collection for 10 years is 1299 yuan.
With such a high price, the explorers were a little shocked. So, what is the current competitive landscape of the domestic mid-to-high-end liquor market?
As we all know, in the current large industry environment, the overall consumption structure is facing a certain degree of adjustment, and the industry leading effect is becoming more and more obvious. Consumers are also more inclined to choose big brands when buying high-end liquor.
According to the data, the total revenue of Maowulu's high-end wine in 2021 reached 155.99 billion yuan, with a total sales volume of more than 76,000 tons, while other brand products that focus on the high-end market (Qinghualang, Dream Blue M9, Handicraft Class, Junpin Xi Wine, Qinghua 30, etc.) have a revenue of about 15 billion yuan. At present, in the high-end wine market, Mao Wulu accounts for ninety percent of the share, which has become an indisputable fact.
According to the data, the current market share of the three high-end brands Mao Wulu in high-end liquor is 57%, 30% and 7% respectively, accounting for 94% in total, forming an oligopoly pattern. Among them, Moutai occupies the ultra-high-end price band of more than 2,000 yuan, and Wulu shares the price band of 1,000 yuan with a few other high-end products.
In this context, it can be said that it is even more difficult for Shede Liquor to seize the mid-to-high-end market or even the high-end market.
According to the financial report, in 2021, the operating income of high-end liquor in Shede Liquor Industry will be 3.874 billion yuan, a year-on-year increase of 81.94%. By 2022, the company's operating income of medium and high-end liquor will be 4.877 billion yuan, and the revenue growth rate has dropped sharply to 25.88%. In the first three quarters of this year, the sales revenue of high-end liquor in Shede Liquor Industry was 4.15 billion yuan, and the revenue growth rate further decreased to 10.62%.
It can be seen with the naked eye that in the mid-to-high-end market, Shede Liquor is falling downward at the same high speed after experiencing an extremely fast sprint upward.
03
Low-grade wine "can't hold up"
It seems to realize that the road to high-end is difficult, and Shede Liquor has also begun to "roll" ordinary wine. In the first three quarters of this year, the sales revenue of ordinary liquor of Shede Liquor was 693 million yuan, a year-on-year increase of 22.94%. This performance growth rate is more than twice that of mid-to-high-end wines.
However, the development strategy of Shede Liquor for mid-to-high-end liquor and ordinary liquor does not seem to be very clear. In 2022, the output of ordinary liquor of Shede Liquor Industry will be 25,800 kiloliters, a year-on-year decrease of 8.4%, and the sales volume will be 26,400 kiloliters, a year-on-year decrease of 4.11%. The main representative brand of ordinary liquor in Shede Liquor Industry is Tuopai Daqu. Even in 2022, when production and sales are showing a downward trend, the operating income of ordinary liquor of Shede Liquor will increase by 10.92% year-on-year.
At the high point of Shede Liquor's performance in 2021, the company's operating income of low-grade liquor increased by 218.66% year-on-year, exceeding the 81.94% of mid-to-high-end liquor.
So, can ordinary wine become the "magic weapon" for Shede Liquor to break through?
Judging from the current fundamentals, it seems that it is still difficult. In the first three quarters of this year, the sales revenue of Shede Liquor from medium and high-end liquor was 4.15 billion yuan. In comparison, the sales revenue of ordinary liquor was only 693 million yuan, accounting for 85.69% and 14.31% respectively. Judging from the performance contribution of the two, the performance of Shede Liquor Industry still properly relies on medium and high-end liquor.
It is difficult for the high-end to break through, and the low-end cannot support it, and Shede Liquor is also facing various challenges that come with it. First and foremost is the change in dealers.
In the first three quarters of this year, there were 610 new distributors of Shede Liquor's liquor products, 215 distributors withdrew, and a total of 2,553 distributors at the end of the reporting period, an increase of 395 from the end of 2022.
In 2022, there will be 135 new distributors in Shede Liquor Province, a decrease of 279, and 661 new distributors outside the province, a decrease of 611. In 2022, Shede Liquor will have a total of 796 new distributors, a decrease of 890.
Distributors are one of the most important sources of performance contribution for liquor companies. Behind the large fluctuations of dealers, it often means that the performance of enterprises may change accordingly. According to the data, in the first three quarters of this year, the sales revenue of Shede Liquor from wholesale agents was 4.545 billion yuan, and the income from the company's e-commerce sales was only 298 million yuan, accounting for 93.84% and 6.16% respectively.
And the main reason for dealers to "choose to leave" may be that they can't make money. According to media reports, if the impact of factors such as the manufacturer's year-end rebate is not calculated, 70% of the dealers operating the terminal profit of the large single product of famous wine are almost "zero", only 20% of the dealers report "slight profit", and the remaining 10% of the dealers say that they are selling at a loss. In the "unprofitable" survival dilemma, some dealers can only seek other ways out. It is reported that a large-scale distributor in Guangdong has almost given up all the agency rights of famous liquor since this year, and turned to a nationwide transfer operation.
At present, the leading effect of the industry is becoming more and more obvious, coupled with the environment of consumption structure adjustment, it is still difficult for Shede Liquor to seize the mid-to-high-end market with Mao Wulu. In this context, the resources brought by the Fosun system can only be "temporary thirst quenching". If you want to reproduce the rapid growth of performance, you also need to study the future development direction.
Author丨Zhang Yu
来源丨征探财经(ID:teccj6)