In the midst of the boiling industrial noise, how should a company deal with uncertainty, and how should it ride the wind and waves and move forward steadily?
Shede Liquor (600702. SH), perhaps giving an answer.
According to the annual report data, Shede Liquor will achieve operating income of 7.081 billion yuan in 2023, a year-on-year increase of 16.93%, and net profit attributable to shareholders of listed companies will be 1.771 billion yuan, a year-on-year increase of 5.09%.
In the complex economic and consumption environment last year, this achievement of Shede Liquor Industry can be described as hard-won.
You must know that 2023 is the "year of turning point and differentiation" of the new cycle of China's wine industry.
This is pointed out in the "2023 Annual Report on the Development of China's Liquor Industry" by the China Liquor Industry Association. At the same time, the report predicts that with the further deepening of the industrial structure and industrial cycle, the "Matthew effect" of the liquor industry will continue to intensify, and the pressure and challenges faced by liquor companies will multiply.
For the business answer sheet handed over by Shede Liquor, the capital market naturally gave a positive response.
Zhongtai Securities' research report believes that the annual report of Shede Liquor is in line with expectations, and the quality of cash collection is high, maintaining a "buy" rating.
At the opening of the morning of March 21, the liquor index rose. Shede Liquor rose more than 5%, and other liquor companies such as Luzhou Laojiao (000568. SZ), Jinshiyuan (603369. SH) also rose more than 2%.
01 The secret to continuous growth
Shede Liquor's revenue has continued to grow, which is related to a "strategy".
According to the 2023 annual report, that is the "old wine strategy" - it is the company's continuous promotion of this strategy, the quality of old wine has been further recognized by consumers, resulting in an increase in sales revenue.
"On top of quality, there is only old wine". In 2019, based on multiple leading advantages such as ecological winemaking and altar storage technology, Shede Liquor took the lead in proposing the "old liquor strategy" in the industry.
It can be said that "ecology" + "old wine + science and technology" has built a moat for the product quality of Shede Liquor. The Tai'an workshop, which began in the Ming and Qing dynasties and still has the aroma of wine, the "six old skills" under the blessing of national intangible cultural heritage skills, and the storage method of the original site of the original altar have been integrated and condensed into an important connotation of the value of old wine.
The truth and persistence of Shede Liquor Industry in the "old wine strategy" are reflected in the business operation, which gives it a certain firm strength.
From the perspective of the performance of products in the terminal market, in 2023, the revenue of medium and high-end liquor in Shede Liquor will be 5.655 billion yuan, a year-on-year increase of 15.96%.
The "old wine strategy" has laid the momentum for Shede Liquor's revenue growth in recent years - this is no exaggeration.
In the practical exploration of the implementation of the "old liquor strategy", Shede Liquor has also successfully opened up an effective path for the marketization of old liquor stored in the altar, and has effectively consolidated its industry position as the "market-oriented leader of the old liquor in the jar" by virtue of the advantages of the old liquor reserves and the development of diversified market activities.
Shede Liquor not only saw a gratifying increase in sales of mid-to-high-end liquor, but we also noticed that ordinary liquor also saw double-digit growth.
In 2023, Shede Liquor will achieve sales revenue of 905 million yuan, an increase of 16.11% year-on-year.
Here we have to mention the multi-brand matrix strategy of Shede Liquor. In 2019, Shede Liquor made it clear that the Shede brand was sub-high-end, and the Tuopai brand focused on the mass market. As we all know, in the current consumption of liquor, the growth potential contained in the mass market is no less than that of the high-end.
As a "classic liquor that sells 5 billion bottles", Tuopai adheres to the quality gene of "China's famous liquor", which is of great significance to Shede Liquor Industry to build a solid foundation for development.
According to the 2023 "China's 500 Most Valuable Brands" released by the World Brand Lab, the brand value of "Shede" is 85.527 billion yuan, the brand value of "Tuopai" is 64.575 billion yuan, and the value of dual brands exceeds 150 billion yuan.
02 Maintain strategic focus
Maintaining strategic focus has allowed Shede Liquor to achieve yesterday's results and have the courage to deal with all uncertainties in the future.
In order to consolidate the market leadership position of Tanchu Old Liquor, in 2023, Shede Liquor will continue to increase its efforts in "cost" investment by increasing production and expanding capacity and increasing scientific and technological innovation.
According to the annual report, as of the end of 2023, the inventory amount of Shede Liquor was 4.424 billion yuan.
In this regard, Shede Liquor said that the company took the initiative to invest in the production of semi-finished products of base liquor, which is used for long-term storage and refining of high-quality old liquor, and the increase in inventory amount is in line with the business policy of the old liquor strategy.
Sometimes, however, the market simply misinterprets "inventory" as undigested inventory. In fact, some wine industry analysts believe that "factors such as the recovery of cellar pools, the expansion of production capacity, and the reserve of new wine and old wine are the main reasons for the increase in inventory." In the context of increasing production and expanding capacity, the increase in the inventory amount of wine enterprises will be a normal trend. ”
Linked to Shede Liquor's product commitment to consumers - "Shede wine, every bottle is old wine", we can imagine that it will take a lot of financial, material and time to practice this sentence.
A corresponding fact is that Shede Liquor has built a quality closed loop of "ecology + altar storage + science and technology innovation = a bottle of Shede old wine". Behind this, in 2023, Shede Liquor will continue to increase its "cost" investment by increasing production and capacity, increasing scientific and technological innovation, so as to stabilize the market-oriented leading position of Tanchu old liquor. In 2023, the R&D expenses of Shede Liquor Industry will be 108 million yuan, a year-on-year increase of 42.19%, and the innovative power ranks among the top in the liquor industry.
For Shede Liquor, the "old liquor strategy" is not only a brand show under the industry's old liquor craze, but also an innovation battle to lead the normalization of consumption.
In the past year, Shede Liquor has continued to reach a new level in many important areas such as strengthening strategy, management optimization, brand quality improvement, market expansion, organization construction, and product going overseas.
For example, in an effort to revive Tuopai, Shede Liquor has successively held activities such as the Tuopai Wine Neighbor Festival, Tuopai True Love Season, Tuopai Tide in Beautiful Night, and the British Super Burning Tour.
The return of Tuopai's brand value and industry status will undoubtedly increase the performance of Shede Liquor's "second growth curve" and create more possibilities.
The diversification and refinement of the construction of sales channels, at the same time, have added a strong boost to the revenue of Shede Liquor.
According to the annual report, in 2023, the sales revenue of wholesale agents will grow steadily, reaching 6.128 billion yuan, a year-on-year increase of 16.48%, and 897 new dealers will be added, and the number of dealers will increase by 497 compared with the end of 2022.
The two-wheel drive inside and outside the province has also made the national market of Shede Liquor steadily upward. In 2023, its sales revenue outside the province will be 4.678 billion yuan, a year-on-year increase of 15.65%.
Maintaining strategic focus means that no matter what the environment is, Shede Liquor must practice long-termism and uphold the business philosophy of "steady and steady".
03 Steady traversal of cycles
If planning a strategy and maintaining strategic focus is the first step to strategic success, then the second step should be to implement and finally implement the strategy.
If the strategy cannot be implemented, it will lead to "hot at the top and cold at the bottom", "hot at the target and cold at the result". In this regard, Shede Liquor has maintained a high degree of vigilance and sober-mindedness from beginning to end, and does not dare to slack off.
It is well aware that in order to ride through the cycle steadily, it must have strong resilience and resilience.
In order to become a "world-class liquor company" with leading culture, ecological sustainability and innovation, we must first make ourselves a persistent in the long river of time.
On March 20, on the opening day of the 110th National Sugar and Wine Fair, the third "Old Wine Festival" of Shede Liquor Industry was also opened at the headquarters of Shede Production and Research.
This year's Old Liquor Festival held the completion ceremony of the main body of the Longchi Ecological Brewing Workshop, the Forum on the Value of Old Liquor in the Altar and the Sealing Ceremony of "Shede Spring Brewing in the Year of the Dragon", and released the Tuopai Shede Wine and Tourism Integration Line Product for the first time, linking the C-end.
As the core force influencing the development process of the industry, famous wine companies need to have perseverance and strategic self-confidence, and this is the case with Shede Liquor.
The main project of the above-mentioned Longchi ecological brewing workshop is actually a microcosm of Shede Liquor's advance planning for the next ten years. Looking forward to the future, Shede Liquor's first-mover advantage in the field of old liquor and the accumulation effect of strategic stability are expected to continue to ferment and support its future performance growth in the long run.
Taking "internationalization" as an example, with the empowerment of Fosun, Shede Liquor firmly implements its internationalization strategy, and at the beginning of 2024, Shede will successively land in Germany, Spain, Japan, Singapore and Australia. In the future, it will further explore the development opportunities of the global market and brew a better life for families around the world.
In order to steadily pass through the cycle, it is understood that in 2024, Shede Liquor will firmly adhere to the four strategies of "old wine, multi-brand matrix, rejuvenation, and internationalization" as the direction and guidance for progress.
At the same time, it will unswervingly create a large single product belonging to Shede Liquor, unswervingly promote the high-end product structure, unswervingly promote the process of nationalization, create a high-occupancy base market, and unswervingly promote the brand to internationalization.
In addition to anchoring the "four unswerving", Shede Liquor will also focus on the "four improvements", that is, to enhance product power, brand power, channel power and organizational power.
Looking back at the 2023 annual report now, Shede Liquor's revenue and net profit have reached a new high, which is just a natural result. Because its growth logic has always been in the same vein, it is the result of deepening development and implementation in "drawing a blueprint to the end".