On April 11, Changyu A (hereinafter referred to as Changyu) released its 2023 annual report: the company achieved a total revenue of 4.385 billion yuan, an increase of 11.89% over the same period in 2022, and a net profit attributable to shareholders of listed companies of 532 million yuan, an increase of 24.2% over 2022.
In 2023, known as the "most difficult year", Changyu grew against the trend, stabilized the fundamentals of China's wine industry, and created a "good vintage"!
This report card of Changyu has further consolidated the market share of leading enterprises and injected upward confidence into the Chinese wine industry at an absolutely difficult time.
01
The total profit accounts for 333% of the industry, and the revenue and profit have increased!
According to Changyu's annual report, the total revenue during the reporting period was 4.385 billion yuan, compared with 3.918 billion yuan last year, a significant increase.
Changyu's 2023 annual report
As we all know, the wine consumption market environment in 2023 will be much more difficult than in 2022.
In 2022, China's wine market showed a relatively stable trend. Affected by the epidemic policy, the import volume and import value of imported wine have declined, thus providing a broader development space for domestic wine.
However, entering the beginning of 2023, the sudden relaxation of epidemic prevention policies has led to an almost stagnation of business activities across the country, and the originally expected Spring Festival peak season sales have not brought satisfactory results to the first quarter. In addition, according to the WBO's market survey for the whole of 2023, the consumption environment is not optimistic. It can be seen that in the wine adjustment period, Changyu can achieve such excellent results, which is indeed commendable.
From the perspective of the data of the entire wine industry, Changyu's growth performance is more intuitive and worth considering.
At present, the total revenue of wine enterprises above designated size in 2023 has not yet been fully announced. However, according to the estimated data released by the China Wine Industry Association, in 2024, there will be 1,885 domestic wine production licenses, but only 104 production enterprises above designated size (with an annual main business revenue of more than 20 million), and the total profit is expected to be 224 million yuan.
The total profit of Changyu reached 747 million yuan. In terms of total profits, Changyu accounts for 333% of the entire Chinese wine industry. At a time when the entire wine industry is mostly in a state of loss, Changyu Company has performed more prominently in terms of profits.
Looking at the imported wine data in 2023, the data comparison is even more shocking.
According to customs data, from January to December 2023, the import volume of bottled wine was about 155 million liters, a year-on-year decrease of 29.54%, and the import value was about 7.268 billion yuan, a year-on-year decrease of 17.81%, with a double decline in volume.
In 2023, the wine import value will be 7.268 billion yuan, and Changyu's total revenue will be 4.385 billion yuan, which already accounts for 60% of the bottled wine import value. In 2022, the import value of bottled wine will be 9.56 billion yuan, and Changyu's total revenue will be 3.918 billion yuan, accounting for 40%. In just one year, the gap has narrowed by two percent.
This shows that in the situation of imported wines, Changyu Company is still growing, further expanding its domestic market share.
02
The reform of the business department has achieved remarkable results, and it has adhered to the established strategy unswervingly
Changyu's ability to achieve growth against the trend is inseparable from the company's internal reforms and the strategy formulated and adhered to a few years ago.
In 2022, Changyu began to promote the business division system, and established a total of 7 business divisions, including Longyu Sales Division, Winery Wine Sales Division, Cabernet Sales Division, Brandy Sales Division, Imported Wine Sales Division, Online Sales Division and Tourism Division, clarifying and improving the division of responsibilities and rights of each business division, significantly improving the efficiency of front-line organization and command of the market, improving the coordination with production units and technical systems, and making the track clearer.
It is worth mentioning that the brandy sales division will achieve a total revenue of 1.153 billion yuan in 2023, a year-on-year increase of 16.35%.
Changyu's overseas business also ran smoothly overall, with revenue and net profit reaching record highs for the Ducal de Dio Winery in Spain and the Magic Lion Winery in Chile.
Secondly, the development strategy of "focusing on mid-to-high-end, high-quality, and large-scale single products" that Changyu has always adhered to has also been further deepened. The product structure is focused on the mid-to-high-end, and the price of a single bottle in each category has increased, such as Longyu, other winery wines, Cabernet and table wines, brandies, imported wines, etc.
Judging from the annual report, the sales volume of Changyu wine was 65,000 tons, an increase of 0.21% year-on-year, and the tonnage price was 47,800 yuan/ton, an increase of 10% compared with 43,300 yuan/ton last year. It can be seen that Changyu Company has achieved remarkable results in focusing on high-end products.
In 2023, Changyu Cabernet will hold more than 87,000 banquets, reaching more than 20 million people. If each of these more than 20 million people affects 10 people, it will cover nearly 200 million people. This volume accounts for just half of our country's 400 million middle-income people, and it is also an important result of its insistence on focusing on the strategy of large single products and banquet promotion tactics.
From the perspective of channel contribution, the direct sales business directly facing enterprise customers, group purchase customers and individual consumers achieved a revenue of 660 million yuan, accounting for 15.05% of the total sales revenue, which is a direct reflection of Changyu's continuous circle marketing activities, and also adheres to the tactical implementation of "asking for sales from terminals and growing from cultivating consumers", which reflects the effectiveness of Changyu's continuous deepening of channel reform.
WBO believes that Changyu clarifies the specific work plans such as the development path, target assessment, tracking and scheduling, and summary and improvement of relevant business units, so that circle marketing can begin to effectively empower indicator growth and brand promotion. At the same time, adhere to the "three focus" strategy and promote the upgrading of product structure, reflecting the full determination to implement the market strategy in recent years.
03
We will continue to improve quality and continue to promote digital transformation
According to the annual report, the total domestic revenue in 2023 will be 3.76 billion yuan, an increase of 13.27% year-on-year, and the foreign revenue will be 623 million yuan, an increase of 4.19% year-on-year. This also shows that the recognition of Changyu in the domestic and foreign wine markets is further improving.
In the past year, Changyu's high-end strategic brand, Longyu, has become a frequent guest on the wine lists of some high-end restaurants around the world and Michelin-listed restaurants, and has also been recognized by many catering leaders. Today, through Changyu's channel advantages and Longyu's own excellent quality, it has entered 50 countries around the world. Jesses Robinson, one of the world's top three wine critics, scored the second highest score in the world in 2023 in a blind tasting of king-quality wines from all over the world, second only to Château Lafite.
In 2023, Changyu won 227 awards such as Grand Gold Award and Gold Award in various well-known competitions at home and abroad, far surpassing its international and domestic counterparts. In addition, for the first time, it also ranked first in the list of "2023 World's Strongest Wine & Champagne Brands" released by BrandFinance, a global authoritative brand value evaluation agency.
At ProWein, the world's largest wine and spirits trade fair held in Düsseldorf, Germany, China's leading wine company Changyu appeared at the exhibition with a large independent booth, and its star brands such as Longyu, Keya, Effieburg, Cabernet, and Golden Ice Valley attracted attention from all over the world with their unique oriental charm and Changyu style.
Mr. Frank Kämmer MS, Mr. Stefan Neumann MS, Mr. Maximilian Steiner, "Austria's Best Sommelier" and other celebrities came to the Changyu booth to praise the unique flavor of Chinese wines and brandy.
Mr. Frank Kämmer MS, Mr. Maximilian Steiner, "Austria's Best Sommelier", Mr. Zhou Hongjiang, Chairman of Changyu Company, Mr. Sun Jian, General Manager of Changyu Co., Ltd., and Mr. Lenz Moser, European Affairs Representative of Longyu Winery (from left to right)
Experts have said that Keya 15 Year Old XO has subverted their perception of conventional brandy, and they believe that Keya definitely has the quality comparable to the world's top cognacs, but it is not a replica of cognac, but a real Chinese wine.
In the 2024 MUNDUS VINI World Wine Competition and the 2024 Berlin Wine Competition, Changyu won a total of 26 medals, including 1 Grand Gold Medal and 17 Gold Medals.
It can be seen from this that the 11 major brands of Changyu have continued to concentrate on cultivating internal strength, and the product quality has been continuously improved, and they have an extremely important place on the international stage with "Chinese terroir, Changyu style, and world quality".
Changyu's digital transformation is also continuing. The one-item-one-code traceability system, Changyu member mini-program, smart retail mall, and i-Changyu store service mini-program are all progressing in an orderly manner. In traditional e-commerce such as JD.com, Tmall, and Pinduoduo, as well as emerging e-commerce companies such as Douyin and Kuaishou, as well as in private domain business, all of them have achieved the first place in the wine category. The construction of the consumer data platform (CDP) launched this year can realize the global insight of consumer data, and accurately guide product research and development, marketing promotion and brand communication, and digital marketing will reach a higher level in the future.
WBO believes that the quality of Changyu's domestic wines and brandies has been internationally recognized, which is crucial to Changyu's performance growth, and also plays a positive role in promoting Chinese wines to the world. The continuous promotion of digitalization will also make Changyu more focused on precise operation and market positioning, and further promote Changyu's continuous growth.
04
The first quarter of 2024 continues to be a difficult year for the wine industry
Judging from the terminal market situation in the first quarter of this year, the current wine consumption market is still obviously weak, and the signs of recovery are not clear, and even many wine merchants believe that the first quarter of 2024 is the most "weak" start in recent years.
From the perspective of imported wine data, the General Administration of Customs recently announced the wine import data from January to February 2024, with an import volume of 36.9355 million liters and an import value of 168 million US dollars (about 1.209 billion yuan at the current exchange rate), down 8.73% and 14.43% year-on-year respectively, which is the lowest level in the same period in recent years.
In addition, the liquor market has also fallen into a "cold period", the price of liquor giant Moutai products has fallen, taking Feitian as an example, the terminal price of "loose Mao" market has fallen to 2,500 yuan, and some liquor merchants said that it may continue to decline.
WBO also learned from the terminal market that many wine merchants said that the performance in the first quarter had a decline of about 20%-30%, and the dynamic sales data was the worst in 10 years, and some wine merchants have lowered their sales targets in the second few quarters of this year.
It can be seen that in the first quarter of 2024, not only the situation of the wine industry is still difficult, but the situation of the entire wine market is not optimistic. Changyu's achievements in 2023 are certainly gratifying, but on the whole, the wine industry has not fully recovered, and the entire industry still needs to hold on and wait during the adjustment period.