A few days ago, the 2023 financial report data disclosed by Shuijingfang showed that revenue and net profit both increased, and the business goals set at the beginning of the year were completed. In 2024, Shuijingfang has made another dream start, with double-digit net profit growth in the first quarter.
In the Wuka era, the business landscape is unpredictable, and following the rules will only stand still. At present, the competition in the liquor industry is intensifying and tends to be stock competition. Insufficient effective demand for alcohol, overcapacity and high inventory are common problems in the industry.
In such an environment, Shuijingfang adheres to the same strategy and walks out of its own way to break the situation.
The revenue is nearly 5 billion, and the high-end continues to make efforts
On the evening of April 26, Shuijingfang released its 2023 annual report. During the reporting period, Shuijingfang achieved an operating income of 4.953 billion yuan, a year-on-year increase of 6%, and a net profit of 1.269 billion yuan, a year-on-year increase of 4.36%. The net cash flow from operating activities was 1.734 billion yuan, a year-on-year increase of 31.98%.
Shuijingfang has completed the previously formulated business objectives, that is, revenue and net profit growth. In addition, the quarterly report for the first quarter of 2024 disclosed at the same time shows that Shuijingfang's operating income in the first quarter was 933 million yuan, a year-on-year increase of 9.38%, and the net profit was 186 million yuan, a year-on-year increase of 16.82%.
Behind the brilliant performance is the continuous development of Shuijingfang's high-end product line, as well as Shuijingfang's continuous investment in large single products.
The main representative brands of Shuijingfang's high-end products are Shuijingfang brand series, including Jingtai and Zhenzhuo No. 8. According to the data, the revenue of high-end products was nearly 4.7 billion yuan, and the gross profit margin was as high as 84.88%.
Chen Quan, general manager of Shuijingfang High-end Products Division, said: "On the basis of stable fundamentals, the company's adherence to the high-end strategy, as well as the continuous cultivation and investment in brands and high-end flagship products, is an important help for the company to steadily promote the implementation of its long-term strategy and realize the cycle crossing." ”
The research report of Guojin Securities pointed out that the revenue of Shuijingfang's core products, Zhenzhuo No. 8 and Jingtai, will account for more than 80% in 2023, focusing on the high-end price of 300~500 yuan.
With its unique flavor of "sweet and moist", "Shuijingfang Jingtai" has created a new process of "one unique and two fragrant" of strong fragrant liquor, which has gained attention from inside and outside the industry.
Following the comprehensive upgrade of the liquor body and packaging of the well platform in 2022, in 2023, on the one hand, Shuijingfang will continue to promote the new well platform, and on the other hand, it will launch the "Shuijing Fang Jingtai Yipin", which is benchmarked against the price range of 800 yuan to enrich the product matrix of the well platform.
At the same time, on the occasion of the 25th anniversary of the archaeological discovery of the Shuijing Street Distillery Site in 2023, the company will also launch a new ultra-high-end product "Shuijingfang First Fang", which is brewed from the original site of the Shuijing Street Distillery Site, the "First Liquor Workshop in China", paying tribute to the living culture of "China's First Liquor Workshop", so as to enrich the brand matrix and bring consumers more high-quality and unique liquor experiences.
In the first half of 2023, the channel inventory of Shuijingfang Zhenzhuo No. 8 was promoted to become more and more healthy and benign through strategies such as sales and inventory clearance, and in the second half of 2023, the product price of Zhenzhuo No. 8 was increased in a timely and moderate manner, which effectively promoted the good performance of Zhenzhuo No. 8 in the market sales in the second half of the year.
"Nowadays, consumers are paying more and more attention to quality and personalized experience when choosing liquor. For consumers who pursue a high quality of life, famous wine is not only a drink, but also a manifestation of life attitude. Ouyang Qianli, an expert in the liquor industry and founder of Qianli Think Tank, believes that "famous liquor companies like Shuijingfang are meeting the diverse needs of consumers through continuous product innovation and channel breakthroughs, and seizing new growth opportunities in the changing market." ”
Explore your potential
The concentration of the liquor industry continues to increase, and the Matthew effect is becoming more and more obvious. The number of liquor enterprises above designated size continued to decrease, and profits were further concentrated in the head enterprises. At present, famous and high-quality wine enterprises continue to grow, the living space of small and medium-sized wine enterprises is constantly squeezed, regional wine enterprises are growing rapidly, and the industry as a whole is showing a trend of structural differentiation.
In such a competitive situation, overcapacity and high inventory have become common problems in the industry. The backlog of social inventory will also have a series of chain reactions, such as the price of products inverted, and wineries and distributors are miserable.
In order to ensure the healthy operation of the supply and marketing chain, Shuijingfang took the initiative to reduce social inventory and had the courage to undertake, so that the business was healthy and benign throughout the year.
In the first quarter of 2023, Shuijingfang's main task is to reduce social inventory and stabilize the value chain, which led to a significant year-on-year decline in performance in the first quarter; since the second quarter, dealer inventory has returned to a healthy level, and store inventory has also decreased significantly, returning to normal levels; in the third and fourth quarters, operating income has returned to double-digit growth.
Shuijingfang not only grasps the current development, but also based on the long-term and long-term investment for the future. Based in the Chengdu production area, Shuijingfang works closely with the government, industry organizations and upstream and downstream enterprises in the industrial chain, and works with all parties to deeply explore and make full use of the unique geographical, ecological, historical and cultural advantages of the Chengdu (Qionglai) production area, and actively advocates and practices the innovative and diversified development model of the whole industrial chain.
The construction of Shuijingfang Qionglai whole industry chain base enables Shuijingfang to realize the integrated operation of the whole industrial chain from raw material procurement to brewing and packaging, and provides important support for Shuijingfang to reduce costs and optimize efficiency.
It is reported that the main project of the Qionglai Whole Industry Chain Base Project (Phase I) has been completed and has been officially put into operation. Shuijingfang will also continue to solidly promote the construction of the second phase of the project to further improve the supply chain capacity and long-term wine storage scale.
Shuijingfang also focuses its resources on the field of channel expansion, and constantly excavates the depth and breadth of channels.
As in the case of Vintage No. 8. Throughout the year, Shuijingfang actively adopted the strategy of key cities and maintained a good market share in the top 15 key cities. At the same time, the company continued to expand its distribution network, strengthened its product penetration rate, and added about 9,000 new effective stores throughout the year.
In addition, Shuijingfang has launched a variety of e-commerce exclusive products in the e-commerce channel, such as "Small Water Well", "Water Well Banquet", and "Treasure Series (Kirin Pixiu) Gift Box", aiming to allow more consumers to taste more high-end and high-quality liquor in the price range of about 200 to 300 yuan, and strengthen the attention to the middle and low price bands, and set up a full-time "Emperor Huang Bottle Tianhao Chen" team to achieve business strengthening.
Jiang Leifeng, acting general manager of Shuijingfang, said that steady and healthy growth is the product of sticking to a long-term strategy and focusing on key areas. Growth doesn't happen in isolation, it's about the environment, partners, consumers, and stakeholders. In the future, on the basis of sticking to the long-term strategy, Shuijingfang will adapt to market dynamics and constantly review strategies and tactics in order to create more value with stakeholders.