Financial reporter Liu Jian
The 2023 annual report of liquor listed companies disclosed that most liquor companies continued to grow steadily, while the drunkard liquor, which had risen rapidly in previous years, suddenly "lost power", and the revenue and net profit attributable to the parent company in 2023 both fell sharply, especially the net profit attributable to the parent company was nearly halved year-on-year. The company's quarterly report for the first quarter of this year shows that this decline continues. What kind of "ghost" did the drunkard encounter with alcohol? The company said that the intensification of competition in the industry, the sluggish sales of channel customers, and the lack of demand for high-end products are all important reasons.
Net profit in 2023 will be cut in half
According to the annual report of alcoholic liquor, the revenue in 2023 will be about 2.83 billion yuan, a year-on-year decrease of 30.14%; The net profit attributable to the parent company was about 548 million yuan, a year-on-year decrease of 47.77%. The non-net profit was 538 million yuan, a year-on-year decrease of 48.85%, and the net cash flow from operating activities was 51.2392 million yuan, a year-on-year decrease of 87.21%.
You must know that the performance of alcoholic liquor has risen sharply in recent years, and the net profit attributable to the parent company in 2020 and 2021 has soared by 64.15% and 81.75% respectively. Regarding the decline in performance, Jiujiujiu said that it was mainly affected by factors such as changes in the market environment, intensified market competition and the adjustment of the company's sales strategy. In addition, the company also had deficiencies in cost control and operational efficiency, which affected profitability.
At the same time, the first quarter report of 2024 is released, and the important indicators are still not optimistic. The company achieved revenue of 494 million yuan in the first quarter, a year-on-year decrease of 48.8%; the net profit attributable to the parent company was 73.3803 million yuan, a year-on-year decrease of 75.56%; The net cash flow from operating activities was -265 million yuan, a year-on-year decrease of 259.83%.
Jiujiu said that since 2024, the liquor industry as a whole is still in a period of adjustment, the industry squeeze competition has been further intensified, the price of liquor products is under pressure, and the consumer demand for sub-high-end products and above has yet to recover. The company took the initiative to adjust some channel customers and their operating products, which affected the payment collection in the short term. Affected by the market and consumption as a whole, the industry as a whole is in a cycle of inventory depletion, and channel customers are cautious in their willingness to make payments, resulting in less than expected payment.
Poor sales of products in the high-end price range
Jiugui Liquor Co., Ltd. was established in 1997 and listed on the Shenzhen Stock Exchange in 1997, with its registered address in Xiangxi Tujia and Miao Autonomous Prefecture, Hunan Province. Drunkard Liquor is well-known for its unique fragrant liquor, and has three major brand series of "Internal Reference", "Drunkard" and "Xiangquan".
In 2023, the revenue of the company's three major brand series products will all decline sharply. Among them, the Xiangquan series decreased by 68.03% year-on-year; The revenue of the drunkard series was 1.647 billion yuan, although it fell by 27.45%, but the proportion of revenue increased from 56.06% in 2022 to 58.22%; The revenue of the internal reference series was 715 million yuan, a year-on-year decrease of 38.21%, accounting for 25.27% of the revenue.
From the perspective of gross profit margin, although the gross profit margin of the internal reference series and the drunkard series declined slightly year-on-year, the gross profit margin level was still 90.13% and 77.49%.
It is worth noting that the company's high-end price products cannot play an important supporting role in the company's development.
In order to support the transformation of the marketing model of internal reference series products and stabilize the market price, the company will launch the internal reference Jiachen version in the fourth quarter of 2023, and at the same time take the initiative to control and stop the old version of internal reference, cultural and creative products, and exclusive sales products. Due to the fact that in the first quarter of this year, the internal reference Jiachen version is still in the market expansion stage, and the sales support has not been formed, and other internal reference products have not formed large-scale income due to goods control and suspension, resulting in a significant year-on-year decline in the company's high-end product revenue and profit in the first quarter. At present, the market price of internal reference core products is gradually recovering, the market expansion of new products is advancing in an orderly manner, and it is expected that the sales rhythm of internal reference products will return to normal in the second quarter.
Although the sales volume of the company's Xiangquan and other brands in the public price segment increased in the first quarter, the company's new production capacity was affected by the storage period and could not be transformed into finished products in the short term.
Drunkard Liquor also said that in 2024, it will focus on the "1+3+1" core product matrix. Hongtan 18 in Hunan Province deepens the operation of core stores, excavates the group purchase resources of core stores, and promotes the increase of sales, while Hongtan 20 outside the province adopts urban alliance operation to stabilize product prices and protect customer profits. Hongtan serialized operation, the development of Hongtan extended products, the realization of Hongtan mainstream price leap upward, occupy the high-line sub-high-end. Relying on the Jiachen version, the internal reference brand firmly creates 52 degrees internal reference as the only core product in the country; Stabilize the operation model, optimize the value chain, and take the opening of the bottle as the end point of all work.
There were 188 more dealers, and sales did not increase but declined
In 2023, the sales of alcoholic liquor through online channels will be 280 million yuan, and the sales through offline channels will be 2.518 billion yuan. According to the data, 98.88% of the revenue of alcoholic liquor in 2023 comes from the distribution model. In 2023, the sales revenue of alcoholic liquor to the top five dealer customers will be 1.512 billion yuan, accounting for 37.33% of the total annual sales.
The 2023 annual report shows that there are 1,774 alcoholic liquor dealers, an increase of 188 year-on-year, but the increase in dealers has not increased sales, and revenue has declined sharply.
At the end of 2023, the company's finished wine inventory is 5,671 tons, and the base wine inventory is 40,526 tons. The company's current production capacity is about 12,000 tons, and the first phase of the production zone three project can be put into operation in 2024, and the second phase of the production zone three is under construction, and the above projects will add 10,800 tons of production capacity after they are put into operation. At present, the company's dealers are not willing to make payments, the terminal dynamic sales are blocked, and the digestion of production capacity is still a big problem.
The liquor industry attaches great importance to sales channels, and from the perspective of sales expenses, the sales expenses of alcoholic spirits in 2023 will be 912 million yuan, a year-on-year decrease of 10.97%. In the first quarter of this year, the company's sales expenses were 168 million yuan, a year-on-year decrease of 33.26%. It can be seen that the company's investment in marketing is decreasing.
Drunkard Liquor also reminded of the risks it may face: the concentration of the liquor industry continues to increase, and the market share and profits are further concentrated in the head enterprises, which may have the risk of intensified competition; The liquor industry is in a period of adjustment, and there may be a risk of weakening overall demand; There may be a risk that macroeconomic growth will slow down and consumption will not recover as expected.
A few years ago, when the performance of alcoholic liquor soared, it shouted the goal of revenue of more than 10 billion, but at present, it is still not easy, and the performance in 2023 will not advance but retreat, and it will be farther and farther away from this goal.
The overall performance of the liquor industry in 2023 is still outstanding, and the performance of leading companies such as Moutai, Wuliangye, Luzhou Laojiao, and Shanxi Fenjiu continues to increase significantly. However, there are also individual companies that have dragged their feet, in addition to alcoholic wine, Huangtai Liquor, Golden Seed Liquor, and Shunxin Agriculture will all lose money in 2023, with losses of 15.0094 million yuan, 22.0696 million yuan, and 296 million yuan respectively.
The financial reporter contacted the drunkard on the deep reasons for the company's performance decline and the sales of high-end liquor, but did not receive a clear answer.
In the secondary market, the drunkard's liquor, which had a 10-fold increase from 2020 to 2021, has also fallen miserably. On May 6 this year, the drunkard had a rare harvest. As of the close of trading on May 8, the share price of alcoholic liquor was 56.47 yuan/share, which has fallen nearly 8% from the high point of 270 yuan/share in 2021, and the current total market value is 18.349 billion yuan.