Text | Yang Wanli
In the Chinese liquor industry, Gujing Tribute Liquor, Yingjia Tribute Liquor, Kouzijiao and Golden Seed Liquor are known as the "Four Golden Flowers of Huijiu". In the past few years, the leading position of Huijiu has been occupied by Gujing Gongjiu, while Yingjiagongjiu and Kouzijiao have fierce competition between the second and third positions.
As early as 2017, the revenue scale and net profit scale of Kouzijiao were higher than that of Yingjia Gongjiu, and the difference between the net profit scale and Gujing Gongjiu was less than 40 million yuan. However, starting from 2022, Kouzijiao's revenue and net profit scale will be overtaken by Yingjiagongjiu, and Kouzijiao will lose the "second" position of Huijiu in terms of performance scale. In addition, the gap between the revenue and net profit scale of Kouzijiao and Gujing Gongjiu has further expanded.
Judging from the latest 2023 annual report, Kouzijiao achieved revenue of 5.962 billion yuan last year, a year-on-year increase of 16.1%; The attributable net profit was 1.721 billion yuan, a year-on-year increase of 11.04%, and the performance target for 2023 was not completed - "the overall performance growth target is not less than 18%".
From the perspective of secondary market performance, the total market value of Kouzijiao is lower than that of Gujing Tribute Liquor and Yingjia Tribute Liquor.
As of the close of trading on May 14, the share price of Kouzijiao was 42.65 yuan, with a total market value of 25.59 billion yuan. On the same day, the total market value of Yingjia Gongjiu was 58.6 billion yuan, 2.28 times the total market value of Kouzijiao, and the total market value of Gujing Gongjiu was 138.4 billion yuan, 5.4 times the total market value of Kouzijiao.
In the 2023 annual report, Kouzijiao mentioned that it "strives to become the first group member of the domestic liquor industry". In the future, how will Kouzijiao make efforts to catch up with the gap between performance and market value?
The scale of performance is lagging behind: the "second" of Huijiu has become "third"
Kouzijiao has been engaged in the production and sales of liquor since its establishment.
Judging from the data changes in the past 7 years, the performance gap between Kouzijiao and Gujing Gongjiu has gradually widened, and from 2022 onwards, it will be overtaken by Yingjiagongjiu, sliding from the "second place in Huijiu" to the "third" position.
In 2017, Kouzijiao achieved a revenue of 3.603 billion yuan, which was higher than the revenue scale of Yingjia Gongjiu of 3.138 billion yuan and lower than the revenue of Gujing Gongjiu of 6.968 billion yuan (the revenue gap was about 3.365 billion yuan).
Since then, from 2018 to 2021, the revenue scale of Kouzijiao has been higher than that of Yingjiagongjiu, but the revenue gap with Gujing Gongjiu has widened to 8.241 billion yuan.
In 2022, the revenue scale of Kouzijiao will be surpassed by Yingjiagongjiu, and the revenue gap between the two companies will be 370 million yuan. In the same year, the gap between the revenue scale of Kouzijiao and Gujing Gongjiu widened to 11.578 billion yuan.
By 2023, the revenue gap between Kouzijiao and Yingjia Gongjiu will widen to 758 million yuan, and the revenue gap with Gujing Gongjiu will expand to 14.292 billion yuan.
From the perspective of revenue growth, the year-on-year decline in revenue of Kouzijiao in 2020 will exceed that of Gujing Tribute Liquor and Yingjia Tribute Liquor; From 2021 to 2023, the revenue growth rate of Kouzijiao will be lower than that of Gujing Tribute Liquor and Yingjia Tribute Liquor.
In terms of net profit, in 2017, Kouzijiao achieved an attributable net profit of 1.114 billion yuan, and Gujing Gongjiu achieved an attributable net profit of 1.149 billion yuan, and the net profit data gap between the two companies was about 35 million yuan, and the net profit scale was relatively close. In the same year, Yingjiagong Liquor achieved an attributable net profit of 667 million yuan, a difference of 447 million yuan from the net profit of Kouzijiao.
Since then, from 2018 to 2021, the net profit scale of Kouzijiao has been higher than that of Yingjia Gongjiu, but the gap with the net profit scale of Gujing Gongjiu has widened to 571 million yuan.
In 2022, the net profit scale of Yingjiagong Liquor will exceed that of Kouzijiao, and the gap between the net profit scale of the two companies will be 155 million yuan. In the same year, the gap between the net profit scale of Kouzijiao and Gujing Gongjiu widened to 1.593 billion yuan.
In 2023, the gap between the net profit scale of Kouzijiao and Yingjia Gongjiu will widen to 567 million yuan, and the gap between the net profit scale of Gujing Gongjiu and Gujing Gongjiu will expand to 2.868 billion yuan.
From the perspective of net profit growth, from 2017 to 2023, Kouzijiao has experienced a year-on-year decline in attributable net profit twice, which occurred in 2020 and 2022.
In 2022, the net profit growth rate of Kouzijiao will decline by 10.24% year-on-year, and the net profit growth rate of Yingjia Tribute Liquor and Gujing Tribute Liquor will be positive in the same year. In 2023, the net profit growth rate of Kouzijiao will be 11.04%, which is lower than the net profit growth rate of Yingjia Tribute Liquor and Gujing Tribute Liquor.
At present, there are 20 listed liquor companies in the A-share market. Flush shows that in 2023, Kouzijiao's revenue and net profit will rank 11th and 10th respectively. In 2017, Kouzijiao's revenue and net profit ranked 8th and 6th respectively. It is not difficult to see that the scale of revenue and net profit of Kouzijiao has also declined in the industry.
Why is there a lack of stamina?
In 2023, Kouzijiao's revenue growth rate and net profit growth rate will not reach the 2023 performance target. One of the reasons for the company's profit change in 2023 is the increase in expenses.
In 2023, the sales expenses of Kouzijiao will be 827.3 million yuan, a year-on-year increase of 18.19%; Administrative expenses were 407.4 million yuan, a year-on-year increase of 51.95%. Compared with the same period in 2022, Kouzijiao's sales expenses and management expenses in 2023 will increase by a total of 266.6 million yuan.
The second reason for the change in earnings in 2023 is the year-on-year decline in the amount of the company's contract liabilities.
In 2023, the contract liabilities will be 397.5 million yuan, a year-on-year decrease of 29.42%. In 2021 and 2022, the contract liabilities of Kouzijiao will be 677.4 million yuan and 563.1 million yuan respectively, down 12.01% and 16.87% year-on-year respectively.
The contract liabilities are mainly the payment received from customers in advance, and the increase in the amount of contract liabilities indicates that the dealers are more willing to pay, and vice versa, the weaker the willingness of the company's dealers to pay.
In addition, as of the end of 2023, Kouzijiao's notes receivable and accounts receivable were 445.9 million yuan, which increased significantly to 869.4 million yuan at the end of the first quarter of 2024. Looking at the peers, at the end of the first quarter of this year, the notes receivable and accounts receivable of Gujing Gongjiu and Yingjiagongjiu were 68.61 million yuan and 51.95 million yuan respectively.
There is a view that notes receivable and accounts receivable are items generated by the relaxation of payment policies by wine companies and allowing distributors to take the goods first and then complete the payment, and the higher the above values, the greater the pressure on the performance of wine companies.
In recent years, the competition in Anhui Province, the base camp of Kouzijiao, has been fierce, and the company has opened the road to nationalization.
In the Anhui market, the performance of local enterprises Gujing Gongjiu and Yingjiagongjiu has been strong, and the well-known baijiu Mao, Wu, Jian, Lu, Yang and Fen have intervened one after another, and the market competition has intensified.
In the 2023 annual report, Kouzijiao reminded of the risk, saying, "Market competition risk The liquor market is a fully competitive market, and there are many liquor production enterprises in Anhui Province, including many well-known enterprises, and in recent years, liquor manufacturers in Guizhou, Sichuan, Shanxi and other regions have continued to develop, and the market competition faced by the company has become increasingly fierce." ”
In recent years, "nationalization" has become one of the common directions pursued by liquor enterprises, and expanding the market outside the province means finding new performance growth points.
What is the effect of Kouzijiao in opening up the market outside the province?
From the perspective of income composition, from 2020 to 2023, the proportion of income in Anhui Province will be 80.1%, 82.1%, 82.43%, and 83.81% respectively, and the proportion of income in Anhui Province will increase by 3.71 percentage points in the past four years.
During the same period, the proportion of foreign income in Anhui Province was 19.9%, 17.9%, 17.57% and 16.19% respectively, and the proportion of foreign income in Anhui Province fell by 3.71 percentage points in the past four years.
From the perspective of profit composition, from 2020 to 2023, the proportion of profits in Anhui Province will be 81.07%, 82.81%, 83.08%, and 84.51% respectively, and the total proportion of profits in Anhui Province will increase by 3.44 percentage points in the past four years.
During the same period, the proportion of profits outside Anhui Province was 18.93%, 17.19%, 16.92% and 15.49% respectively, and the proportion of profits outside Anhui Province fell by 3.44 percentage points in the past four years.
Judging from the continuous increase in the proportion of revenue and net profit inside and outside the province, the brand and products of Kouzijiao occupy an advantage in the province, but the expansion of the market outside the province needs to be accelerated.
What are the reasons for the expansion of the market outside the province?
On the one hand, it is related to the sales model of Kouzijiao.
The sales model of Kouzijiao has long adopted the "big business system", and the "big business system" is the marketing activities of the products in the region represented by large dealers. In the 2023 annual report, Kouzijiao said that the company will divide the country into several regions, select agents who have reached a certain strength, act as agents for the company's product sales business in the region, and specifically organize marketing work in the region.
The starting point of Kouzijiao's "big business system" can be traced back to 1998, when Kouzijiao created the "plate in the plate" model, subdividing the catering terminal into four categories of ABCD, influencing opinion leaders through Class A high-end hotel terminals, and then cultivating opinion leaders, so as to influence more consumers and "drive the big market with small plates".
In order to make a rapid breakthrough in the core hotel, Kouzijiao granted a single large distributor the omni-channel distribution right in a certain region, and the dealer had a high degree of autonomy, and the "big business system" of Kouzijiao was formed.
For the "big business system" of Kouzijiao, at the beginning of last year, Guosen Securities analysts mentioned in the research report that in the early stage of the development of Kouzijiao, the big business system will help the company to achieve rapid regional expansion with lower sales expenses. However, in the later stage of the development of Kouzijiao, due to the relatively weak control of the channel by the manufacturer, it is slightly insufficient in terms of new product launch, channel order control, and consumer cultivation.
On the other hand, Kouzijiao mainly focuses on liquor products with aroma and does not belong to the mainstream flavor type of liquor. Judging from public data, the mainstream flavor types of the domestic liquor industry are strong flavor type and sauce flavor type, accounting for more than 75% in total (2022 data), and the flavor liquor market is regarded as the next flashpoint in the industry, but compared with the mainstream flavor types such as strong fragrance and sauce fragrance, consumer awareness of it is not enough.
In the future, we will continue to pay attention to whether Kouzijiao can seize the development opportunities of aromatic liquor, achieve steady growth and achieve performance targets in the Huijiu market and even the national liquor market.