Source: Finance Associated Press
On the evening of April 29, the news of Kweichow Moutai's "change of commander" was settled.
According to the announcement of Kweichow Moutai, according to the relevant documents of the Guizhou Provincial People's Government, Zhang Deqin is recommended as a director and chairman of Kweichow Moutai, and it is recommended that Ding Xiongjun no longer serve as the chairman and director of the company.
It is worth noting that it was disclosed in the announcement that from April 2024, Zhang Deqin has served as Secretary of the Party Committee and Chairman of Moutai Group, and Secretary of the Party Committee of Kweichow Moutai Co., Ltd. If there is no accident in the future, Zhang Deqin will become the chairman of Moutai Shuangliu.
This is the fourth time in six years that Kweichow Moutai has changed its head, and observers who have studied Kweichow Moutai for many years say that the company's frequent change of head is a good thing for the stable development of a company, because it may affect the company's strategic stability.
When the first three chairmen changed, the liquor industry in which Kweichow Moutai was located was in an upward period. Nowadays, the liquor industry has entered a period of deep adjustment, and the recent instability of the wholesale price of Feitian Moutai channel has also become the focus of the market. Can the newly appointed chairman maintain a good wine price?
During Ding Xiongjun's tenure, Moutai tested diversification
When Ding Xiongjun landed in Moutai, it can be said that he was ordered to be in danger. The two chairmen of Moutai had an accident, and Moutai at that time was forced to stand on the cusp of public opinion and accept the spotlight. In the capital market, Moutai's share price was also at a low point that year.
Source: Kweichow Moutai public account
In the past three years at the helm of Moutai, Ding Xiongjun has made many changes in all aspects of Moutai, the most important of which can be summarized into three items, i Moutai, price increase and series of liquors.
The first is the launch of the "i Moutai" APP, as an important part of Moutai's channel reform, "i Moutai" has greatly promoted the growth of Moutai's performance.
According to the latest data, the number of users of "i Moutai" has exceeded 65 million, and the number of daily active users has reached 7 million recently.
Judging from the financial report data, i Moutai has a more intuitive role in boosting corporate performance. In 2021, Moutai's operating income will be 106.1 billion yuan, of which the direct sales channel will be about 24 billion yuan, that is, direct sales will account for about 22%.
By 2023, Kweichow Moutai's revenue will be 147.7 billion yuan, and the revenue from direct sales channels will be about 67.2 billion yuan, accounting for about 45%. Since the direct sales channel is sold at the market guide price higher than the ex-factory price, it is equivalent to a disguised price increase in the direct sales channel, which boosts the performance development of Moutai.
It is worth noting that the relationship between Moutai dealers and Moutai has always been quite delicate, it is not only a community of interests, but also a game of interests.
Similar to "i Moutai", Ding Xiongjun promoted Moutai's price increase during his tenure.
On October 31, 2023, the Central Financial Work Conference released a blockbuster signal: activate the capital market and better support the expansion of domestic demand. On the night of the same day, Kweichow Moutai issued an announcement in response, saying that it would raise the price of some products, including Feitian, by 20%.
This timing is quite clever, and the price increase will inevitably significantly improve Moutai's performance, at that time, some industry insiders said that Moutai is basically scheduled to make a profit of more than 100 billion yuan in 2025. So much so that some small shareholders of Moutai used "a sudden jingle in the middle of the night, and 10,000 taels of gold flew in." Describe the late-night price hike.
In addition, Ding Xiongjun also took the series of liquors as a key layout in Moutai, and launched a series of liquors such as 1935, which brought new sales increments to Moutai. In 2021, the revenue of Moutai series liquor was about 12.6 billion yuan, and by 2023, this figure will increase to 20.6 billion yuan, an increase of more than 60%.
It is worth noting that the launch of non-standard Moutai not only enriches Moutai's product line, but also thickens the company's profits.
Taking Xunfeng Moutai launched at the end of last year as an example, the price is 1498 yuan/375ml, if converted according to this, it is equivalent to 1997 yuan to buy a 500ml bottle of Feitian Moutai, which is an increase of 30% compared with the recommended retail price of 1499 yuan for Feitian Moutai.
Moreover, non-standard products are often sold through Moutai's direct sales platform, which further improves Moutai's profitability. In 2023, the average selling price of Kweichow Moutai's direct sales will reach 4.3002 million yuan/ton, with a gross profit margin of 95.46%, while the average selling price of distribution channels will be 1.3877 million yuan/ton, with a gross profit margin of 89.29%.
In addition, Ding Xiongjun has been creative in the rejuvenation of the brand, and has successively launched products such as Moutai ice cream, sauce latte, and Moutai chocolate, although the revenue contribution is not high, but it also provides ideas for Chinese liquor to cultivate future consumers.
It is reported that after leaving office, Ding Xiongjun will be appointed director of the Guizhou Market Supervision and Administration Bureau.
Zhang Deqin: 10 years after the return of the "old Moutai people".
After May 2018, in the eyes of the outside world, the chairman of Kweichow Moutai was replaced like a flower.
Prior to that, the chairman of Kweichow Moutai was Yuan Renguo, who had been at the helm of Kweichow Moutai for 18 years. Under Yuan Renguo's tenure, Kweichow Moutai has developed a huge dealer network system, whether it is a special dealer or a Moutai liquor store, it has played an important role on the road to Kweichow Moutai becoming stronger and bigger, but with the Feitian Moutai brand premium ability is getting higher and higher, when the product is in the situation of long-term shortage of supply caused by the joint control of the manufacturer, the price chaos of Moutai also starts from the dealer, and even price rent-seeking, the manufacturer's price is out of control, etc.
On May 6, 2018, Li Baofang replaced Yuan Renguo and officially became the new chairman of the company. In the early days of Li Baofang's tenure, it coincided with the recovery of the entire liquor industry, and Kweichow Moutai, as the leader of the liquor industry, received additional attention from the market due to the soaring price of its main product Moutai.
At a time when the price of Moutai is soaring, Kweichow Moutai has launched a huge round of anti-corruption actions, and at the same time, Moutai's own marketing system has also kicked off a prelude to change. In this change, a large number of illegal Moutai distributors were cleared out, and at the same time, a number of executives were also investigated on suspicion of accepting bribes, including Yuan Renguo.
Under Li Baofang's iron-fisted reform, Kweichow Moutai's direct sales channels began to expand. He is also attaching importance to the development of a series of liquors, trying to break the dominance of Moutai.
In March 2020, Li Baofang stepped down and was replaced by Gao Weidong, but he served for no more than two years. However, in the eyes of the outside world, Gao Weidong did not leave too deep a mark on the development of Moutai Group. Later, Gao Weidong was also sentenced to life for accepting bribes of hundreds of millions of yuan.
During Ding Xiongjun's tenure as chairman of Moutai Group, the time was two years and eight months. It can be said that after Ding Xiongjun took office, he continued the direct sales channels of the Li Baofang era and expanded the development of Moutai series liquor.
In the past six years, the chairman of Kweichow Moutai has changed four times. From Li Baofang to Gao Weidong to Ding Xiongjun, these were not born in the wine industry, but were parachuted into Moutai as officials.
Zhang Deqin, who is currently replacing Ding Xiongjun, has not only been in the liquor industry for many years, but also an old Moutai person.
According to public information, Zhang Deqin, born in September 1972, is a native of Renhuai City, Guizhou Province, and holds an MBA from China Europe International Business School. He graduated from Guizhou University of Technology in July 1995 and joined Kweichow Moutai Liquor Company that year. In May 2010, he was appointed as the assistant to the general manager of Kweichow Moutai Distillery, and the chairman, general manager and deputy secretary of the Party Committee of Xijiu Company.
Source: Kweichow Moutai public account
From December 2011 to August 2018, Zhang Deqin served as a member of the Party Committee and Deputy General Manager of Kweichow Moutai Distillery (Group) Co., Ltd., and Secretary of the Party Committee and Chairman of the Board of Directors of Kweichow Moutai Distillery (Group) Xijiu Co., Ltd.
From June 2019 to July 2019, Zhang Deqin briefly left the wine industry before returning to the wine industry. After returning, his identity has changed to the head of Guizhou Xijiu Investment Holding Group Co., Ltd.
"Zhang Deqin is a very strong leader with a strong style and strong courage to implement enterprise reforms. Xiao Zhuqing, a liquor marketing expert, believes.
It is understood that when Zhang Deqin was at the helm of Xijiu, he put forward the cultural positioning of "gentleman's product", and cleaned up and slimmed down the product line of Xijiu. In 2010 alone, Zhang Deqin cut off four licensed products of Xijiu, including Moutai liquid, which Moutai Group granted to Xijiu to use the word "Moutai". On the other hand, in terms of brand marketing, Xijiu invested 300 million yuan and then appeared on CCTV advertising after more than 20 years, which launched the brand awareness of Xijiu in the national market and carried out a preliminary network layout.
In 2010, Xijiu's annual target was 1 billion yuan, but in mid-2010, Xijiu only completed 270 million yuan. Under a series of measures after Zhang Deqin took office, Xijiu successfully exceeded the 1 billion mark at the end of 2010. As of the end of April 2018, Xijiu has completed sales of more than 2.1 billion yuan, achieving a strong growth of 101% year-on-year, and profit increased by 162% year-on-year.
Even when the eight regulations swept the liquor industry and the performance of many liquor companies was cut in half, the sales of liquor rose instead of falling. In 2013, the sales volume of Xijiu increased by nearly 20%, achieving annual sales of 2.68 billion yuan. In the same year, the production capacity of Xijiu sauce flavor base wine jumped to 17,000 tons, a year-on-year increase of 83.83%.
According to media reports, during his tenure, Zhang Deqin planned that Xijiu would re-enter the top ten liquor in China in 2015, and build Xijiu into a 10-billion-level company in 2016, becoming the second largest brand of sauce fragrance in the country. However, these goals have not been achieved. In 2019, Zhang Deqin was transferred to Guizhou Modern Logistics Industry Group as a member of the Party Committee and deputy general manager.
It is worth mentioning that Xijiu Holdings is a group company formed after the spin-off of Xijiu from Moutai Group, and is wholly owned by the State-owned Assets Supervision and Administration Commission of Guizhou Province. Before taking up the position of chairman of Moutai Group, he was the secretary of the Party Committee and Chairman of Guizhou Xijiu Investment Holding Group Co., Ltd., and the Secretary of the Party Committee and Chairman of Guizhou Xijiu Co., Ltd.
Downward pressure on wine prices
At the time of Ding Xiongjun's resignation, Kweichow Moutai began to face the challenge of pressure on wine prices. Zhang Deqin is at the helm of 100 billion Moutai this time, can he lead Moutai to achieve better development?
Xiao Zhuqing said that the recent instability of the transaction price in the Moutai market may be a major factor contributing to the change of the company's head.
Since 2023, the entire liquor industry has entered a period of deep adjustment, with weak market demand and slowing down sales. Recently, the wholesale price in the Moutai channel, represented by Feitian in 2024 (loose bottles), has fallen below 2,600 yuan, which has attracted market attention.
Since 2023, the entire liquor industry has entered a period of deep adjustment, with weak market demand and slowing down sales. Recently, the wholesale price in the Moutai channel, represented by Feitian in 2024 (bulk bottles), fell below 2,600 yuan.
The liquor industry is a cyclical industry that has gone through several cycles in history. The last round of recovery of the liquor industry began in 2015 and lasted until 2022.
Since the second half of 2022, domestic alcohol consumption has been weak. At that time, the industry judged that the liquor industry and the liquor market had entered a new round of adjustment.
On the other hand, Moutai itself, since 2015, the price of Feitian Moutai in the market has been rising, which once drove the price of other liquors up. Compared with other liquors, the price of Feitian Moutai is strong, and in 2023, the wholesale price in the channel will still be stable above 2,700 yuan per bottle.
Has the price of Feitian Moutai risen to the end today? Historically, Feitian Moutai has encountered the phenomenon of wine not being sold and the price being upside down. Moutai has been affected by market price fluctuations.
At present, it is not only the price of Feitian Moutai that is under pressure, but also the series of high-end liquor Moutai Moutai 1935 launched by Kweichow Moutai during the period of Ding Xiongjun's leadership, which was affected by external factors after its listing in 2022, resulting in poor market sales, which made dealers feel pressure.
Moutai launched Moutai 1935 in the hope of competing with other famous wines in the 1,000-yuan price band, and Wuliangye's Puwu and Luzhou Laojiao's Guojiao 1573 are both at the level of the 1,000-yuan price band. According to previous official data, the ex-factory price of Moutai 1935 is 798 yuan/bottle, but after the listing, Moutai 1935 is actually divided into planned and unplanned, the latter's price is 1088 yuan/bottle, so it also raises the purchase price of Moutai 1935.
In 2023, due to the weak domestic liquor consumption, the market price of Moutai 1935 will gradually fall, and on the e-commerce platform, Moutai 1935 with a price of about 900 yuan is not a minority.
Some dealers believe that it is not impossible to pull a thousand-yuan single product with the brand of Moutai, but under the current situation, this action is a bit rushed.
Recently, a number of market participants said that the price of some liquor products within Moutai is unstable, or it is related to the external environment, and the social purchasing power is insufficient.
However, in a recent research report, Everbright Securities believes that the wholesale price of Moutai is a synchronous indicator reflecting the relationship between supply and demand, rather than a forward-looking indicator. Although the pace of demand recovery cannot be predicted, Moutai has sufficient means to adjust the relationship between volume and price. The company can still reduce the requirements for volume increase by optimizing channels and product structure, so as to effectively alleviate the pressure on the supply side on prices.
However, in this round of liquor industry adjustment, there is still suspense about whether Moutai itself can withstand the industry adjustment cycle.
Some private equity investors in Moutai said that they are even more dissatisfied with the performance of Moutai's share price, and now the dividend rate has not been raised, and the special dividend is not necessarily, and the performance is relatively transparent, which cannot give market expectations and surprises.
Looking back at the share price of Kweichow Moutai, the closing price on February 10, 2021 once reached 2,601 yuan per share, a record high. Now, as of April 29, 2024, the closing price has shrunk to 1,704 yuan per share.
Source: WeChat public account "Caizhi Headlines" is synthesized from: CCTV, Blue Whale Finance, China Business Network, Beijing Daily, Finance Associated Press, etc
Editor-in-charge: Bai Jing
Proofreading: Fenghua
Review: Gong Zimo
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