In 2023, only 5 listed liquor companies in China will achieve a net profit attributable to the parent company of more than 10 billion yuan, and Yanghe Co., Ltd. (002304) is one of the top 5, and its market value also ranks fifth.
The net profit exceeded 10 billion
Yanghe divides the products into medium and high-end liquor and ordinary liquor according to the ex-factory price, and the factory price of medium and high-end liquor is greater than 100 yuan/500ml, which mainly represents Dream Blue (handicraft class, M9, M6+ and Crystal Dream), Su Wine, Sky Blue, Treasure Fang (Emperor Fang and Shengfang), Sea Blue, etc. Ordinary liquor points out that the factory price is less than 100 yuan/500ml, and the main representatives are Yanghe Daqu, Shuanggou Daqu, etc.
Last year, the revenue of medium and high-end liquor was 28.54 billion yuan, an increase of 8.8 percent, and the revenue of ordinary liquor was 3.95 billion yuan, an increase of 20.7 percent. The gross profit margin of medium and high-end liquor is higher, more than 80%, and the gross profit margin of ordinary liquor is about 46%.
Yanghe Co., Ltd. achieved annual revenue of 32.1 billion yuan, an increase of 10%, and a net profit attributable to the parent company of 10.02 billion yuan, an increase of 6.8%, exceeding 10 billion yuan for the first time.
At the same time as the release of the annual report, Yanghe also announced the financial report for the first quarter of 2024, with a revenue of 16.26 billion yuan, an increase of 8%, about half of last year, and a net profit attributable to the parent company of 6.06 billion yuan, an increase of 5.2%, an increase of about 60% of last year. The first quarter coincides with the Spring Festival, which is the peak sales season. Let's take a look at the 2023 annual report.
Liquor sales fell by 15%, prices increased by 30%
It's worth noting that profit growth is slower than revenue growth, which seems rare. The leading wine companies either have revenue and profit growth at the same time, or profit growth significantly exceeds revenue growth. Why is Yanghe shares like this?
In 2023, Yanghe will complete the sales volume of 166,200 tons of liquor, a decrease of about 15% from 195,300 tons in 2022. Yanghe's sales volume is unstable, reaching 210,000 tons in 2018, falling back to 156,000 tons in 2020 and falling again in 2023.
From the perspective of cost delivery, Yanghe did his best. Last year, Yanghe's sales expenses were 5.39 billion yuan, an increase of 29 percent, and mainly spent on advertising and promotion, an increase of 43 percent to 3.46 billion yuan. In addition, efforts have also been increased in e-commerce channels, with expenses of nearly 70% to 57.39 million yuan.
However, Yanghe's move did not boost sales. The reason why revenue is still growing by double digits is because of price increases.
According to the data, last year, Yanghe's liquor income was 32.39 billion yuan, that is, about 195,000 yuan per ton of liquor, equivalent to about 98 yuan per 500ml. In 2022, the revenue of Yanghe tons of liquor will be 150,000 yuan, equivalent to about 75 yuan per 500ml.
In other words, Yanghe raised the overall price of liquor by about 30% last year. This price increase is still very large, and the sales volume is declining, but the total revenue is still growing, and the "price to make up the volume" has been realized. However, it is also the excessive increase in sales expenses that has affected the company's profit growth.
The author also further counted the average price of liquor in Yanghe for a total of 6 years from 2018 to 2023, and the data shows that the price has been raised every year, with a single-digit increase in two years. Overall, the average price in 2023 is almost double that of 2018.
Dividend rate increased to 70%
According to the profit distribution plan approved by the board of directors of the company, Yanghe shares plan to distribute cash dividends of 4.66 yuan per share to all shareholders, with a cumulative dividend of more than 7 billion yuan and a dividend rate of more than 70%.
This dividend rate exceeds the 60% dividend level for 4 consecutive years from 2019 to 2022, and is also the highest dividend rate after listing. Since 2015, the dividend rate of Yanghe shares has exceeded 50%, which is a relatively generous one among listed wine companies.
Yanghe is a local listed state-owned enterprise, and the Suqian State-owned Assets Supervision and Administration Commission of Jiangsu Province holds 34.2% of the shares of Yanghe through Yanghe Group, and will receive 2.4 billion yuan in cash according to the share ratio.
In addition, according to the annual report, the remuneration of Chairman Zhang Liandong and President Zhong Yu is about 1.98 million yuan, and it is completely the same. Chen Taiqing, chairman of the board of supervisors, and 10 other people, including the person in charge of finance, have a salary of more than one million yuan, ranging from 1.3 million to 1.4 million yuan. The remuneration of the secretary of the board of directors and two supervisors is less than one million yuan.
The annual report disclosed that among the current senior executives, only directors Zheng Bujun and Wang Kai held 45,000 shares and 2,400 shares respectively. According to the 2015 annual report, at that time, there were 6 executives who directly held more than 300,000 shares and had a net worth of tens of millions of yuan or even more than 100 million.
141 people share equity worth 26.5 billion yuan
In addition, the Blue Alliance, which currently holds 17.59% of the shares of Yanghe, has a total of 141 natural persons holding shares, and according to the total market value of Yanghe shares of 150.7 billion yuan, the market value of the Blue Alliance is about 26.5 billion yuan, and the per capita market value is 188 million yuan.
Of course, their respective shareholding ratios are different, for example, the highest is Zhang Yubai and Yang Tingdong (former chairman and vice chairman of Yanghe Co., Ltd., stepped down in 2012), both of them hold 16.86%, and their net worth is about 4.47 billion yuan.
The current chairman and general manager of the Blue Alliance is Cong Xuenian, the former financial director and secretary of the board of directors of Yanghe Co., Ltd., and also holds about 5% of the shares in the Blue Alliance, with a market value of about 1.33 billion yuan. In addition, the 2022 annual report disclosed that Cong Xuenian also directly held about 2.78 million shares of Yanghe, with the latest market value of about 280 million yuan.
As of the end of 2023, Yanghe has a total of 20,500 employees, with an average profit of about 490,000 yuan, an average income of 1.61 million yuan, and an average salary of about 170,000 yuan last year, a decrease of about 3,000 yuan compared with 2022.
As of April 29, Yanghe's share price fell 4.2%, with a total market value of 144.4 billion yuan, ranking fifth among liquor companies.
Note: The remuneration mentioned in this article includes wages and bonuses, employee benefits, five insurances and one housing fund, enterprise annuity, supplementary retirement benefits, etc., and is pre-tax.