Recently, the 2023 annual reports of 20 A-share listed liquor companies have all been released.
2023 is an extraordinary year for the liquor industry, and while the industry has entered a new round of adjustment cycle, liquor companies are facing a situation of inverted prices and high inventories. Under pressure, most wine companies still achieved double growth in revenue and net profit, and the growth rate of revenue and net profit of some wine companies even exceeded 20%.
According to the financial report, the total operating income of the 20 liquor companies in 2023 will be 412.112 billion yuan, a year-on-year increase of 15.65%, which is basically the same as the total revenue growth rate of 15.13% in the previous year; The net profit was 155.146 billion yuan, a year-on-year increase of 18.88%.
Under the growth, the concentration of the liquor industry will continue to increase in 2023, and the revenue threshold of its first-line camp has been raised to 30 billion yuan, and the polarization of the industry will be further intensified. Channel inventory is high, and related enterprises have to increase cost investment and speed up channel inventory clearance.
The scale of revenue increased
From the perspective of revenue scale, Moutai and Wuliangye are still well-deserved industry kings. Among them, Kweichow Moutai is "unbeatable" in terms of revenue scale, achieving annual revenue of 147.694 billion yuan, a year-on-year growth rate of 19.01%; Wuliangye, which ranks second in the industry, has a revenue of 83.272 billion yuan, which also achieved a high growth of 12.58%.
Although there will be no significant change in the top ranking of the liquor industry in 2023, the top three positions in the Yanghe industry are not stable.
Last year, Shanxi Fenjiu and Luzhou Laojiao followed up the pace of Yanghe and moved towards the ranks of 30 billion yuan. If calculated according to the growth rate of Yanghe, Fenjiu and Luzhou Laojiao in 2023, the pattern of the top five A-share liquor listed companies in 2024 will change, and Fenjiu, Luzhou Laojiao and Yanghe will achieve operating income of 38.549 billion yuan, 36.382 billion yuan and 36.451 billion yuan respectively, while Yanghe may decline from the third in the industry to the fourth or even fifth in the industry.
The entry threshold of the head liquor enterprises of liquor enterprises has also been raised, and 10 billion yuan is no longer the threshold stone of the first echelon, and the top five liquor companies have raised the revenue threshold to 30 billion yuan.
The number of listed companies with 10 billion yuan of liquor companies has also expanded to 8. Among them, Gujing Gongjiu will achieve the goal of "rebuilding an ancient well" in 2023, and the scale will exceed 20 billion yuan; Jiangsu regional wine company Jinshiyuan has achieved 10 billion revenues; It is worth mentioning that thanks to the contribution of the pork business, Shunxin's agricultural revenue has exceeded 10 billion yuan.
Among the echelons of 5 billion to 10 billion yuan, there are 4 Shede Liquor, Yingjia Tribute Liquor, Kouzijiao, and Laobai Dry Liquor. Laobai dry wine is just over 5 billion yuan, and Shuijingfang has achieved an income of 4.963 billion yuan, which is only one foot away from 5 billion yuan.
It is worth mentioning that among the 20 liquor companies, only 2 of them, Shunxin Agriculture and Alcoholic Liquor, have negative revenue growth. Among them, Shunxin agriculture has performed poorly in recent years due to the drag of diversified businesses, and the company's liquor business revenue has declined for two consecutive years; The alcoholic liquor was developed too fast because of this, resulting in high inventory last year, and the company also carried out goods control and suspension processing, resulting in a sharp decline in performance last year.
Gross margin differentiation
In 2023, the overall gross profit margin of the liquor industry will show a slight upward trend, according to the Soochow Securities research report, in terms of gross profit margin, the gross profit margin of liquor companies in 2023 will be 82.52%.
In addition to Shanxi Fenjiu, Shede Liquor, Laobai Dry Liquor, Shuijingfang, Jiugui Liquor, Jinhui Liquor, and Huangtai Liquor, 7 gross profit margins declined slightly, and the sales gross profit margins of the remaining 13 were on the rise. Among them, the gross profit margin of Luzhou Laojiao sales was 88.3%, which was close to 91.96% of Kweichow Moutai.
From a gradient point of view, Kweichow Moutai's gross profit margin is above 90%, firmly occupying the first echelon of the industry; The gross profit margin of Luzhou Laojiao and Shuijingfang is in the range of 80%-90%; 10 liquor companies such as Gujing Gongjiu, Yanghe and Fenjiu are between 70% and 80%; The gross profit margin of Golden Seed Liquor is 40.3%, and the gross profit margin of Shunxin Agriculture is 31.8%, which is at the bottom of the industry.
3 are still in the red
The increase in the gross profit margin of many liquor companies can also reflect the increasing profitability of the liquor industry. According to the reporter's statistics, a total of 13 liquor companies have a net profit growth rate above double digits. In 2023, the profit growth rate of the liquor sector will be greater than the revenue growth.
Specifically, Kweichow Moutai's net profit far exceeded the industry's second fifth grain and liquid's 30.211 billion yuan, reaching 74.734 billion yuan. At the same time, the net profit of Yanghe, Shanxi Fenjiu and Luzhou Laojiao exceeded 10 billion yuan, of which Luzhou Laojiao was the highest among the three, reaching 13.246 billion yuan, Shanxi Fenjiu was 10.438 billion yuan, and Yanghe was 10.016 billion yuan, and the latter had the slowest growth rate among the three, only 6.8%.
The net profit losses were Huangtai Liquor, Golden Seed Liquor, and Shunxin Agriculture. Specifically, the net profit of Huangtai Liquor was -15 million yuan, and the net profit of Golden Seed Liquor and Shunxin Agriculture was -22 million yuan and -296 million yuan respectively, and the losses were narrower than that of the previous year.
It is worth mentioning that Shunxin agriculture has been losing money for two consecutive years. In this regard, the company has explained that during the reporting period, the company's liquor business was profitable, and other businesses were affected by changes in the market environment and industry cyclicality, and the sales price of products continued to be sluggish, resulting in a large loss during the reporting period.
Guotai Junan Securities Research Report pointed out that in 2023, the revenue of high-end liquor, sub-high-end and regional liquor companies will increase by 17%, 14% and 14% respectively, and the profit will increase by 18%, 16% and 22% respectively. Affected by the stratification of consumption and the pace of economic recovery, high-end liquor and regional liquor companies showed strong performance certainty during the period, while second- and third-tier liquor companies in the sub-high-end price range were under obvious pressure.
Seven annual targets were not met
Although judging from the financial report data, the overall performance of liquor companies is still growing steadily, according to the annual goals set by various liquor companies in 2023, it is mixed.
Among the 17 listed companies that previously disclosed their 2023 performance targets, Moutai, Wuliangye, and Luzhou Laojiao successfully completed their targets, while Yanghe Shares, Shede Liquor, Kouzijiao, Elite, Rock Shares, and Jinhui Liquor failed to complete their targets.
Among them, the revenue of Yanghe, a leading wine company, will increase by 10.04% year-on-year in 2023, which is not a small gap from the previously set 15% revenue growth target, and the performance completion rate is only 95.69%; Shede Liquor's target of 7.41 billion yuan has a completion rate of 95.56%; The completion rate of Kouzijiao's performance growth target was 98.39%; The profit level of Jinhui Liquor and Elite did not reach the set target.
For 2024, most of the performance targets of the leading wine companies remain unchanged, such as Kweichow Moutai, Wuliangye, Luzhou Laojiao, Shanxi Fenjiu, Gujing Gongjiu, Shuijingfang, etc., and the growth rate will be consistent with that in 2022; Jinshiyuan, which has just exceeded 10 billion yuan, continued to grow aggressively, raising the target to 12.2 billion yuan; Gujing Gongjiu set a revenue target of 24.45 billion yuan, with little change from the previous year.
Of course, there are also some wine companies that lower their targets for 2024, such as Yanghe, which has been sharply lowered and set the 2024 target as "striving for a year-on-year increase of 5%-10% in operating income"; After a sharp decline in performance last year, Alcoholic Liquor said that the goal for this year is to achieve recovery growth; The "net profit of 400 million yuan" target of Jinhui Liquor last year will be left to continue to be completed in 2024, and the revenue will rise to 3 billion yuan.
Heavy marketing
The liquor industry is an industry that emphasizes channels and marketing, and in order to complete the performance indicators, many liquor companies have increased their marketing investment.
According to the financial report, 17 liquor companies will increase their marketing investment in 2023. Among them, Wuliangye will rank first with a marketing expense of 7.796 billion yuan in 2023. The indicators of Gujing Gongjiu and Yanghe also exceeded 5 billion yuan, 5.437 billion yuan and 5.387 billion yuan respectively.
Jinshiyuan and Rock shares also increased their sales expenses significantly last year, with a growth rate of more than 50%. In order to sprint to the goal of 10 billion, Jinshiyuan increased marketing investment, and last year's sales expenses were 2.097 billion yuan, a year-on-year increase of 50.88%; The sales expenses of rock shares were 721 million yuan, a year-on-year increase of 58.98%, which exceeded the revenue.
However, heavy marketing is not necessarily proportional to performance growth, such as Rock shares have the highest sales expense ratio of 44.3%, but still have not completed the annual target, while Alcoholic Liquor's sales expense ratio of 32.2%, ranking second, but the performance in 2023 has declined. For example, the sales expense ratio of Zhongyanghe, the head liquor company, is the highest, reaching 16.26%, and it was once called "advertising wine" in the market.
In 2023, Shanxi Fenjiu, Jiugui Liquor and Golden Seed Liquor will reduce their sales expenses. Among them, Shanxi Fenjiu was 3.216 billion yuan, a year-on-year decrease of 5.49%, and under the condition of reducing marketing, Shanxi Fenjiu's revenue still achieved 31.928 billion yuan, a year-on-year increase of 21.8%, and the net profit also achieved double-digit growth.
Overall, the overall sales expenses of listed wine companies in 2023 are on the rise, which is related to the fierce competition in the industry and the diversification and innovation of brand marketing methods.
In 2023, although some liquor companies have not achieved the set goals, the overall revenue, net profit, gross profit margin, and sales expenses of the liquor industry are still increasing steadily, and the industry concentration is increasing, and polarization is intensifying.
According to the data of the National Bureau of Statistics and the China Liquor Industry Association, in 2023, the output of liquor by enterprises above designated size will be 4.492 million kiloliters, a year-on-year decrease of 2.8%; the operating income was 756.3 billion yuan, a year-on-year increase of 9.7%; The total profit was 232.8 billion yuan, a year-on-year increase of 7.5%.
The total revenue and profit of the 20 listed companies accounted for more than half of the overall industry, reaching 54% and 66.64% respectively. In addition, there is also a trend of differentiation within listed companies. Last year, the top five liquor companies, "Maowu Luyangfen", achieved a total revenue of 326.253 billion yuan, accounting for 79.2% of the 20 listed companies.
Guohai Securities Research Report pointed out that in 2023, the growth rate of liquor performance will be significantly differentiated, with regional sub-high-end leaders> high-end liquors> regional liquor companies > third- and fourth-tier sub-high-end. Among them, high-end wine grew steadily; Wine companies with base markets and product positioning in sub-high-end price bands maintained a high growth rate; After the rapid development in the first two years, the performance of the third- and fourth-tier sub-high-end liquor companies, which relied on investment promotion and distribution to achieve growth, gradually showed pressure, and the report fluctuated greatly from quarter to quarter.