Wuliangye can't catch up with Moutai at all|Liquor readjustment (1)

Zebra consumption

2024-05-06 07:39Posted on the official account of Hubei Zebra Consumption

Zebra consumption Yang Wei

In the context of the stock era, the differentiation of the liquor industry has rapidly spread to the head camp.

In 2023, the net profit of Kweichow Moutai, the "King of Wine", will be 74.7 billion yuan, with a growth rate of nearly 20% for two consecutive years; Wuliangye, the second liquor company, had a performance growth rate of 13% last year, underperforming Moutai for several consecutive years.

In fact, 20 years ago, Wuliangye was the boss of liquor. Kweichow Moutai, through the arbitrage space formed by continuous price increases, as well as the scarcity formed by limited production, created the financial attributes of Moutai, step by step, and finally achieved corner overtaking in the adjustment of the liquor industry in 2013, completely surpassing Wuliangye.

In the past 10 years, Kweichow Moutai has become unbeatable by expanding its series of liquor and promoting direct sales, while Wuliangye is relatively mediocre and has completely lost the opportunity to chase Moutai.

After nearly 30 years of market operation, the liquor industry has already formed a relatively stable market pattern. Wuliangye can't catch up with Moutai, but it still sits firmly on the runner-up throne for many years; Yanghe, Fenjiu, and Luzhou Laojiao firmly guard the sub-top pass; Gujing Gongjiu and Jinshiyuan break through "sub-high-end and nationalization"; the remaining second-tier high-end brands are under full pressure; and the liquor players who come from across the border are even more squeezed by this giant-lined and hierarchical market.

The tail players of the liquor market have not yet established a regional and positioning moat, and how can they withstand the deep nationalization of strong brands? A readjustment of the liquor industry is brewing.

Moutai Wuliangye differentiation

Kweichow Moutai (600519. SH), still mythical.

Moutai, the world's only 100-billion-level liquor single product, continues to consolidate its position. The series of liquors continued to blossom in more places, Moutai 1935 was listed only two years ago and became a large single product with a revenue of 10 billion yuan, Moutai Prince Liquor has a single product revenue of more than 4 billion yuan, and the revenue of Han sauce, Guizhou Daqu and Lai Mao single products has exceeded 1 billion yuan, forming a three-dimensional pattern of thousand, 100 and 1 billion large single products.

In terms of channel reform, Kweichow Moutai compressed distribution channels, with i Moutai as the core starting point, and promoted direct sales. Last year, thanks to the strong performance of i Moutai, the company's direct sales channel operating income was 67.233 billion yuan, a year-on-year increase of 36.16%, and it will become the company's main channel in time, and the gross profit margin of the channel is as high as 95.46%, far exceeding the 89.29% of the distribution channel, which has improved profitability.

In 2023, Kweichow Moutai's operating income will be 147.694 billion yuan, a year-on-year increase of 19.01%, and the net profit attributable to the parent company will be 74.734 billion yuan, a year-on-year increase of 19.16%.

In the first quarter of this year, the company continued to maintain a high growth rate on a high base, with operating income and net profit attributable to the parent company of 45.776 billion yuan and 24.065 billion yuan respectively, a year-on-year increase of 18.11% and 15.73% respectively.

Recently, the price of Xunfeng Moutai and Scattered Flower Feitian has fallen, impacting the price system of Moutai, resulting in pressure on both the wholesale price of Moutai and the share price of Kweichow Moutai. However, with the fourth change of leadership in Kweichow Moutai in 6 years, the "old Moutai" Zhang Deqin returned to retake charge of the overall situation, and it is expected that the company will soon return to a stable state and find a new performance point.

In contrast, Wuliangye (000858. SZ) is much more modest.

In 2023, the revenue growth of Wuliangye's Wuliangye products and series of liquor products will be 13.50% and 11.58% respectively, and the revenue growth rates of distribution channels and direct sales channels will be 13.56% and 12.53% respectively, which is particularly decent. The e-commerce business not only failed to achieve a big breakthrough like Moutai, but also caused the "Rashomon incident" with Pinduoduo.

Last year, the company's operating income was 83.272 billion yuan, a year-on-year increase of 12.58%, and the net profit attributable to the parent company was 30.211 billion yuan, a year-on-year increase of 13.19%.

In Q1 2024, the company's operating income and net profit attributable to the parent company will be 34.833 billion yuan and 14.045 billion yuan respectively, a year-on-year increase of 11.86% and 11.98% respectively. It is worth mentioning that in the first quarter of this year, the net cash flow generated by Wuliangye's operating activities was 516 million yuan, a year-on-year decrease of 94.59%.

Wuliangye's performance growth is not only inferior to Moutai, but even inferior to other first-line liquor companies. In 2023, Shanxi Fenjiu (600809. SH) and Luzhou Laojiao's performance growth rates were 28.93% and 27.79% respectively, and 29.95% and 23.20% respectively in the first quarter of this year.

The "two strong" offense and defense are easy to shape

What many people don't know is that in the early years, Moutai stood in the C position.

In the 90s of the last century, the head company in the liquor industry was the boss Wuliangye, the boss of Fen, and the price ceiling drunkard liquor (000799. SZ）。 In 1998, Wuliangye's operating income was equivalent to 4.5 Kweichow Moutai, and its net profit was 3.8 times.

After Kweichow Moutai was listed in 2001, it gradually demonstrated the ability of industrial operation.

In the following 18 years, the price of Moutai was raised 10 times, and the ex-factory price increased from 185 yuan to 969 yuan.

On the other hand, Moutai's capacity expansion is limited, which lays the foundation for the scarcity of products. Together with the value expectation created by the price increase, the financial attributes of Moutai have been formed.

Therefore, in those years, the sales volume of Moutai did not increase significantly, but Kweichow Moutai's performance achieved amazing growth, and its net profit exceeded that of Wuliangye in 2005.

Investor Lin Yuan, in the early years, he had a heavy position in Wuliangye. However, after research, he found that Moutai was more profitable, so he opened a position early to buy, and it was said that it once held a 2% stake in Kweichow Moutai.

In 2013, the liquor market entered a period of adjustment, and almost the entire industry suffered heavy losses, and Wuliangye, the revenue leader, was no exception. Only Moutai grew against the trend, and finally overtook in the corner, completely surpassing Wuliangye.

In 2016, the liquor industry entered a recovery cycle with high-end as the main line, and Kweichow Moutai fell into a growth crisis due to insufficient high-end space. However, with two rounds of change, the "wine king" has rediscovered the driving force for growth.

First, to reduce the dimensionality and attack, to expand the Moutai Prince Liquor, Moutai Welcome Liquor, Lai Mao, Han Sauce, Renjiu, Guizhou Daqu and other series of liquors, and in 2022, Moutai 1935 will be launched.

In 2015, the revenue of Moutai series liquor exceeded 1 billion yuan for the first time, opening a stage of high growth. Last year, the revenue of this sector reached 20.63 billion yuan, a year-on-year increase of nearly three percent, and the gross profit margin was close to 80%. Taken out alone, it can rank sixth among listed liquor companies.

Second, the launch of i Moutai to expand the direct sales channel. The i Moutai APP was officially launched in May 2022 and gained 30 million registered users by the end of the year. Originally, expanding the Moutai series of liquor would weaken the overall profitability of Kweichow Moutai to a certain extent, but because of the help of direct sales channels, the company's gross profit margin is still steadily increasing.

Kweichow Moutai, which has regained momentum, has thrown Wuliangye farther and farther. By 2023, Kweichow Moutai's operating income will be 1.8 times that of Wuliangye, and its net profit will be equivalent to 2.5 Wuliangye. In these years, Wuliangye has almost missed the best time window to chase Moutai.

The liquor industry class is solidified

In fact, the phenomenon of class solidification in the liquor industry has always existed, especially since the market entered the stock era in 2016, which is more serious.

Although Wuliangye is dwarfed in front of Kweichow Moutai, it is still overwhelming to other wine companies.

Wuliangye's revenue of 80 billion yuan and net profit of 30 billion yuan, the market value has exceeded one trillion yuan, and the two dimensions are almost close to Yanghe + Shanxi Fenjiu + Luzhou Laojiao.

Similarly, Yanghe, Shanxi Fenjiu, Luzhou Laojiao (000568. SZ), as well as Langjiu, which has not yet been listed, firmly control several seats in the sub-top camp of the liquor market. For so many years, no one has been able to break through the fence.

In this camp, Yanghe's leading position, although it continues to be challenged by Shanxi Fenjiu and Luzhou Laojiao, has not been completely rewritten. The next two or three years will be more critical, and it is not yet known who will kill the deer.

The second-tier liquor powerhouses are composed of Gujing Gongjiu (000596. SZ) and Jinshiyuan (603369.SH), which have stood out with almost the same "sub-high-end, nationalization" strategy in recent years. In addition, the second stock of soy sauce liquor Zhenjiu Li Du (06979. Shede Liquor (600702.SH), Shuijingfang (600779. SH), alcoholic liquor, etc., although they have encountered overall challenges, they still stick to the second-tier high-end liquor market.

In recent years, the second-tier liquor camp has been relatively stable, and there are internal disadvantages, but there are no outsiders who have sprung up.

Qinghai Spring(600381. SH) is trying to lead Tinghua Liquor to break into the high-end liquor market with its earth-shattering story, brand tonality and marketing model. As a result, it is also the head that breaks the blood flow.

Most of the tail companies in the liquor listing sector are trying to recover. Even with the blessing of China Resources, Golden Seed Liquor (600199. Huangtai Liquor (000995.SZ) "Northwest Moutai" is famous, and there is also the help of Gansu mining tycoon Zhao Mantang, but it still has not been able to get out of the performance quagmire, if it is never able to recover business, how far is it from the next delisting?

The entire liquor industry has contracted even more dramatically. In 2016, there were 1,578 liquor enterprises above designated size in the country, but now the number has dropped to less than 1,000, a decrease of more than one-third in a few years.

There are more than 20 listed liquor companies, which can be regarded as the head camp of the entire liquor industry. The total revenue of this cluster in 2023 will account for about 55% of the liquor industry, and the net profit will account for 68%.

According to the data, in 2023, the output of liquor enterprises above designated size in the country will be 4.492 million kiloliters, a year-on-year decrease of 2.8%, the operating income will be 756.3 billion yuan, a year-on-year increase of 9.7%, and the total profit will be 232.8 billion yuan, a year-on-year increase of 7.5%.

The stock trend is becoming more and more severe, squeezing growth and structural prosperity continue to coexist, some strong brands are surging with deep nationalization, can the weak brands withstand it? The market is concentrating on the dominant brands and head enterprises without scruples, and the liquor industry will once again enter a period of elimination.

A new round of adjustment of the liquor industry has kicked off.

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