Author: Taylor, Editor: Xiaoichi Mei
On the evening of April 25, Yingjia Gongjiu released its annual performance report, with an operating income of about 6.72 billion yuan in 2023, an increase of 22.07% year-on-year, and a net profit attributable to shareholders of listed companies of about 2.288 billion yuan, an increase of 34.17% year-on-year; at the same time, the company also disclosed a quarterly report, with revenue of about 2.325 billion yuan in the first quarter of 2024, an increase of 21.33% year-on-year, and net profit attributable to shareholders of listed companies of about 913 million yuan, an increase of 30.43% year-on-year;
Yingjia Gongjiu, as the second oldest Huijiu, is a dark horse that has rushed out in recent years.
Since 2017, at the 2024 pledge mobilization meeting of Yingjia Tribute Liquor, General Manager Yang Zhaobing once again put forward the goal of impacting 10 billion: "2024 is a very important year for Yingjia Tribute Liquor Sales Company to hit 10 billion. ”
Although Yingjiagongjiu's performance is remarkable, as a regional second-tier liquor brand, there is still a question mark over whether it can continue its high growth.
Looking back at the development process of Yingjiagong Liquor, unlike the dark horse posture in recent years, as early as 2016 to 2020, the industry recovery period has seen obvious sluggish growth, and the scale of operating income has only increased from 3.038 billion to 3.452 billion in 4 years, basically in a state of stagnancy.
In stark contrast, the expansion of first-line head brands in the context of consumption upgrading, at that time, Yingjia Tribute Liquor, which was dominated by low-end brands, missed out on the market.
The real outbreak node of Yingjia Gongjiu is in 2021, the volume of mid-to-high-end products based on the cave series has made its performance grow rapidly, and in 2022, the revenue and net profit level will surpass that of Kouzijiao, and sit on the second place of Huijiu, second only to the leading Gujing Gongjiu.
At the same time, the share price of Yingjiagong Liquor also ushered in a wave of surge. According to Wind data, in 2021, when the liquor sector only rose by 13.01%, Yingjiagong Liquor rose by as much as 102.21%, significantly outperforming the sector.
Not only that, but the performance of Yingjiagong Liquor in 2022 and 2023 is also good. Although the growth momentum of Yingjiagong wine is very strong, the position of the second in the province still has not stood firm. On the one hand, the scale of performance with Kouzijiao has not increased significantly.
More critically, the two major factors that promote the growth of Yingjiagong liquor, the price increase and the consumption upgrade of the price band in the province are also facing great uncertainty.
If 2022 is a year of industry differentiation, and the performance growth rate of the first-line head liquor brands can still hold up, then 2023 is the real test moment, the cold of the industry has begun to be transmitted to the head of the first-line liquor brands, the performance growth rate has declined, and the phenomenon of terminal and guide price inversion is becoming more and more serious.
As one of the most competitive markets in China, Huijiu market has always had the saying that "the east does not enter Anhui", there are not only "four golden flowers" and other small and medium-sized brands in the province, but also "Mao Wulu" high-end brand and Yanghe shares, Jinshiyuan, Shanxi Fenjiu and other high-end strength of the invasion, the competition has tended to be saturated.
From the perspective of the competitive pattern of the Huijiu market, the real estate liquor brand represented by the "Four Golden Flowers" still occupies an absolute advantage. According to research by Huatai Securities, the proportion of Huijiu brand sales in Anhui has continued to increase, from about 60% in 2018 to about 66% in 2021.
But the problem is that at present, Huijiu local liquor has a high market share, and there is not much room for further improvement.
Regarding the market size of Yingjiagong Liquor in Anhui, Chairman Ni Yongpei once responded that the revenue ceiling in the province is about 10 billion, which is more than 1 times the growth space of 4.17 billion in 2022.
In view of the solidified competitive landscape in the Anhui market, Yingjiagongjiu can only expand its revenue by seizing the market share of other brands, and it is still unknown whether it can do as Ni Yongpei expected.
More importantly, before the consumption upgrade dividend in Anhui Province gradually faded, the current mainstream price band is 200 to 300 yuan, in the downturn of the market environment to upgrade to more than 300 yuan difficulty is increasing, only a few key cities in Hefei can be upgraded to more than 300 yuan, which means that the stock game will continue to heat up.
Therefore, in order to achieve the goal of 10 billion, Yingjia Gongjiu is destined to not work only by relying on this road in the province, and accelerating the development of markets outside the province is a must. However, the company's market development outside the province has not been smooth, compared with the growth rate in the province has slowed down significantly, since 2021, the growth rate of the market outside the province is only about 10%, which is lower than the growth rate of more than 25% in the province.
The price increase is also an important factor in the growth of Yingjiagong liquor. According to Ping An Securities research, the company's unit price will reach 98,000 yuan/thousand liters in 2022, an increase of 24% compared with 2020. Since the second half of 2023, first-tier liquor brands such as Kweichow Moutai, Luzhou Laojiao, and Shede Liquor have adjusted the prices of their main products.
However, in the current weak market environment, only the first-tier liquor companies with strong brand power are more capable of raising prices, and the second-tier liquor brands, including Yingjiagong Liquor, do not have much room for price increases, and there is a high probability that they will not launch price increase measures before the industry recovers.
In addition, the inventory problem of Yingjiagong wine is also a major concern.
In 2021-2022, even if the revenue growth is fast, the capacity utilization rate will only increase to 67.63%, and more than 30% of the production capacity is still idle.
Under such circumstances, Yingjiagongjiu is still spending 6.2 billion yuan to expand production, which is more than 3 times the net profit of 1.703 billion yuan in 2022. It is expected that 40,000 tons of new production capacity will be added after the completion of the plant in 2027, and the current total production capacity of 80,000 tons will increase to 120,000 tons, while the company's actual production capacity in 2022 will only be 54,100 tons.
It should be noted that in recent years, the inventory of Yingjiagong Liquor has also risen year after year, from 2.098 billion to 4.01 billion from 2017 to 2022, an increase of nearly double, higher than the growth rate of 75.43% of revenue in the same period, and the proportion of total assets exceeded 40%, which is obviously high in the industry.
On the one hand, the capacity utilization rate is insufficient, and on the other hand, it has spent a lot of money to expand production capacity, which shows the anxiety of Yingjiagongjiu who is unwilling to be left off the table in this round of industry knockout.
In recent years, the overall production capacity of the liquor industry has shrunk year by year. According to official statistics, the production capacity of liquor enterprises above designated size in 2023 will be 4.49 million kiloliters, a decrease of 33% compared with 2022, and only one-third of the production capacity scale in 2016.
The obvious decline in production capacity in 2023 indicates that the industry knockout competition is entering an accelerated stage, and in stark contrast, the first-tier leading wine companies are still expanding production with the intention of expanding market share.
According to 21st Century reports, in 2022 alone, eight wine companies, including Kweichow Moutai, Wuliangye, Shanxi Fenjiu, and Luzhou Laojiao, announced expansion plans, with an investment of more than 57 billion yuan and an estimated new production capacity of more than 330,000 tons.
In addition to the uncertainty of the expansion of production, the impact on Yingjia Gongjiu is also the reduction of the shareholder Yingjia Foundation, which is also a place where the market has been more controversial about the company in recent years.
Since 2016, Yingjia Gongjiu and the Group have donated funds and shares to the Yingjia Foundation for many times, of which Yingjia Group donated 5% (40 million shares) and 2.44% (19.5 million shares) of the total share capital in January 2019 and December 2023 respectively.
After accepting the donation in 2019, Yingjia Foundation became the second largest shareholder of Yingjia Gongjiu, and since then it has begun to reduce its holdings one after another, and its shareholding has dropped to 1.69% by the end of 2020, and further reduced to 0.57% in the third quarter of 2023, still in the sixth largest shareholder position.
After the donation transfer in December 2023, Yingjia Foundation will once again become the company's second largest shareholder, and at a time near the high stock price, if the shareholding reduction plan is implemented again, it may not only have an impact on the stock price, but also affect the market's future development expectations for the company.
At present, although Yingjiagong Liquor has made certain achievements, it is still the first choice when the market has not fully recovered and the involution in the province has intensified. If we forcibly sprint to 10 billion, we can only go to the road of relying on marketing for market, but it is still debatable how much effect the weakness of brand power can achieve in the end.
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