The 20 listed wine companies in A-share have all handed over the report cards of the first three quarters. Guizhou Moutai and Wuliangye continue to sit in the top two positions in the industry, but the report card of Yanghe shares, the third runner-up in the industry, is not very good.
Last week, Yanghe co., Ltd. released the third quarter report, the first three quarters of the revenue of 21.942 billion yuan, an increase of 16.01% year-on-year; the net profit attributable to the mother of 7.213 billion yuan, an increase of 0.37% year-on-year. It can be seen that after Zhang Liandong took office, Yanghe began to bid farewell to low growth and strived to open up the catch-up gap.
However, taking out the third quarter performance of Yanghe Shares and looking at it separately is somewhat insufficient. In the third quarter of this year, Yanghe shares revenue of 6.4 billion yuan, an increase of 16.66% year-on-year, and net profit attributable to the mother of 1.551 billion yuan, down 13.1% year-on-year. At the same time, Yanghe shares deducted non-net profit of 1.682 billion yuan in the third quarter, up 22.95% year-on-year. This part of the non-recurring profit and loss deducted, that is, the investment loss of 160 million yuan.
Yanghe has always been a famous "investment big man" in the liquor circle, and its investment has brought it nearly 7 billion yuan since 2015. Some investors believe that the short-term investment failure of Yanghe shares is not important, and the signs of recovery of the main business have been very obvious.
But the market is not buying it. Since the beginning of this year, Yanghe shares have been down all the way, the latest stock price of 186.1 yuan, compared with the high point at the beginning of the year fell by nearly 30%, the latest market value of 280.5 billion. The ranking of "the third oldest liquor market value" has long been guaranteed, and it has been surpassed by Luzhou Laojiao (338.7 billion) and Shanxi Fenjiu (349.8 billion).
The market also questioned whether Yanghe Shares, which has lost its investment advantages, can still sit in the third place position in the industry?
Invest in mines
Since 2015, Yanghe has begun to invest in the harvest period. From 2015 to 2020, the investment income brought by Yanghe shares, including wealth management products and fair value changes, reached 6.876 billion yuan.
Yanghe shares' substantial investment income has smoothed out the change in its profits. In 2020, Yanghe shares suffered from the double impact of the epidemic and channel rectification, and the net profit attributable to the mother still maintained a growth of 1.35%, which benefited from the investment income of more than 2.4 billion yuan in that year. After deducting this part of the impact, yanghe shares deducted non-net profit in the same year fell sharply by 13.79%.
Yanghe shares' investment income this year decreased, mainly due to the floating loss of BOC Securities. In 2013, Yanghe co., Ltd. participated in the capital increase and share expansion of BOC Securities and entered the list of shareholders. In February 2020, on the eve of the IPO of BOC Securities, Yanghe held a total of 78.9474 million shares, accounting for 3.16% of the total share capital, which was diluted to 2.84% after listing and has been held so far. Since the beginning of this year, BOC Securities has fallen by 51.9%, and the latest market value is only 36.8 billion, which has also brought floating losses to Yanghe shares.
But overall, this investment in Yanghe shares is still profitable. In 2013, Yanghe co., Ltd. participated in the capital increase at a price of 4.8 yuan, with a cumulative investment of 380 million yuan, calculated by the current market value of BOC Securities, and its holding part corresponds to a market value of 1.045 billion yuan, which is still a cost-effective transaction.
However, Yanghe Shares' large amount of trust and financial management has also laid an untime bomb for its financial security. In 2019 and 2020, Yanghe invested 10.4 billion yuan and 12.1 billion yuan respectively to purchase trust wealth management products. With the frequent explosion of trust products, some investors have questioned: After purchasing so many trust products, is there a hidden danger of financial thunderstorms in Yanghe shares?
At present, the trust products purchased by Yanghe Shares have recovered the principal, but the real estate trust products it holds are very risky. By the end of 2020, Yanghe co., Ltd. had purchased 11 Evergrande-related trust products, 2 Baoneng-related trust products, and a total of 42 trust products including Wanda and Sunac, with a total amount of about 5 billion yuan. At present, Yanghe shares still have 4 Evergrande-related trust products that have not matured, with a total amount of 560 million.
Yanghe seems to have ambitions to expand the scale of investment. In August this year, Yanghe shares transferred 10% of the Yunfeng Xincheng Fund held by minsheng Trust for 1.28 billion yuan, becoming a limited partner of Yunfeng Xincheng.
Subsequently, Yanghe shares also reported the news of joining the Minsheng Trust. The official website of the Beijing Banking and Insurance Regulatory Bureau disclosed that It has approved Wuhan Central Business District Co., Ltd. to transfer its 5.9455% equity interest in Minsheng Trust to Yanghe Shares. Once the transaction is completed, Yanghe will become the fourth largest shareholder of Minsheng Trust.
Compared with the "dark thunder" of the investment business that has not yet erupted, the performance pressure of Yanghe shares is more worrying.
Performance concerns
The major shareholder of Yanghe shares is Jiangsu Yanghe Group, with a shareholding ratio of 34.16%, after penetration, it is Suqian State-owned Assets Supervision and Administration Commission, and the second largest shareholder is the high-level shareholding platform Blue Alliance, with a shareholding ratio of 19.55%.
Compared with the 20 liquor listed companies in A-share, from the perspective of revenue scale, Guizhou Moutai, Wuliangye and Yanghe accounted for the top three respectively. However, from the perspective of revenue growth, the third place of Yanghe shares is in jeopardy: the revenue growth rate of Yanghe shares in the first three quarters of this year is only 16.01%, and among the 20 listed liquor companies, it only surpasses Guizhou Moutai, Laobai Dry Wine, Huangtai Liquor and Shunxin Agriculture.
Guizhou Moutai revenue has exceeded 77 billion, and there is no comparison with Yanghe shares that have just crossed the 20 billion revenue threshold, while Huangtai, Niulanshan and Laobaigan are only 0.4 billion, 11.6 billion and 2.77 billion respectively.
From the perspective of profitability, the net profit scale attributable to Yanghe shares ranks third, second only to Moutai and Wuliangye, but the growth rate is also at the end of the industry.
Yanghe's performance growth rate is weaker than the industry, which is determined by history.
In the early stage of Yanghe's development, with its in-depth distribution model, it won the reputation of "Moutai has a brand premium, Yanghe has a channel premium", and in 2011, it entered the "10 billion club" in one fell swoop, and its sales iron army resisted the subsequent blow of the liquor bear market.
However, the in-depth distribution model is "cheng also Xiao He defeat Xiao He" for Yanghe shares.
Under the in-depth distribution model, distributors are only responsible for capital and logistics, market development, operation, etc. are responsible for wine companies, and distributors are positioned as distributors mainly responsible for logistics, and the profit difference is small.
In the period of downturn in the liquor market, under the deep distribution model, distributors can ensure stable income, so a stable channel is formed; but after the liquor industry marches towards high-end, this model greatly weakens the sales motivation of distributors due to the compression of dealers' profits. The impact of this is that the phenomenon of Yanghe shares channel pressure is serious.
In May 2019, Yanghe took the initiative to expose the problem of channel inventory, proposing to reorganize the dealer team, establish a new type of manufacturer relationship, thicken channel profits, and clear channel inventory.
So, what is the status of Yanghe shares rectification?
In the past three years, the production volume of Yanghe shares has been declining, and it has only resumed production this year. In 2018-2020, production fell from 211,600 tons to 161,500 tons, a decline of more than 24%. In the first half of this year, the production volume of Yanghe shares reached 86,100 tons, an increase of 27.39% year-on-year.
In the first three quarters of 2021, Yanghe's new contract liabilities were -2.672 billion, -613 million and 994 million, respectively. The contractual liabilities of liquor companies generally refer to the prepaid accounts of distributors. From this point of view, in the first half of this year, Yanghe shares have been digesting last year's dealer orders, until the second half of the year to start the expansion of new orders.
The capacity utilization rate of Yanghe shares has always been at a disadvantage among the leading players in the industry. In 2020, the capacity utilization rate of liquor in Guizhou Moutai, Wuliangye, Luzhou Laojiao and Shanxi Fenjiu was 118% (Moutai Liquor), 92%, 100% and 75% (Company Headquarters), respectively. In the same period, the capacity utilization rate of Yanghe's Yanghe brand was 55%, and the capacity utilization rate of Shuanggou brand was 39%.
In the first half of this year, although the output of Yanghe shares has increased, the capacity utilization rate is still not high. The design annual production capacity of Yanghe brand is 222,500 tons, and the design annual production capacity of Shuanggou brand is 97,000 tons, and the actual production capacity in the first half of this year is 64,100 tons and 21,100 tons, respectively.
With low capacity utilization, the fixed costs that need to be apportioned will become higher, which in turn will affect the profit level of enterprises. At the same time, it also shows that Yanghe shares are still far from the growth ceiling.
Yanghe's production cuts and control capacity have not improved its high inventory. From 2018 to the end of the third quarter of this year, the inventory of Yanghe shares was 13.89 billion, 14.43 billion, 14.85 billion and 14.99 billion, respectively.
The pain points are hard to understand
Yanghe shares are still in the process of adjustment and transformation, and the lack of core high-end brands has always been its difficult pain point.
Yanghe launched the "Dream Blue M6+" in 2019 with the price of 800+, and in 2020, it launched the Dream Blue Diamond Edition at a price of 700+. However, the price brackets of the two have not been opened, the market positioning basically overlaps, and the recognition of high-end products is diluted.
It can be corroborated that in the first half of this year, the revenue of high-grade liquor in Yanghe Co., Ltd. was 12.55 billion yuan, an increase of 16.48% year-on-year, and the revenue of ordinary liquor was 2.6 billion yuan, an increase of 19.18% year-on-year.
In the same period, the profit growth of ordinary liquor of Yanghe shares was also more obvious. In the first half of this year, the gross profit margin of high-grade liquor in Yanghe Co., Ltd. reached 81.98%, an increase of 0.13% year-on-year, while the gross profit margin of ordinary liquor was 44.36%, an increase of 7.83% year-on-year.
Based on the sub-high-end market, Yanghe is facing great pressure. On the one hand, there is a possibility of dimensionality reduction and attack of Moutai and Wuliangye, on the other hand, the second-tier echelons of Luzhou Laojiao and Shanxi Fenjiu are competing for the "third place" market.
Moreover, the regional advantage of Yanghe shares is shrinking.
Before 2018, the main market of Yanghe shares was in Jiangsu Province, and the revenue accounted for more than half. However, since 2017, its provincial sales have been impacted by other liquor brands. Since 2017, the gross profit margin of Yanghe Co., Ltd. outside the province has begun to exceed the provincial market, and the proportion of revenue has been increasing. In 2020, the gross profit margin of Yanghe Co., Ltd. in the market outside the province reached 76.7%, but the gross profit margin of the provincial market was only 71.41%.
In the first half of this year, the gross profit margin of Yanghe Shares in the province rebounded to 74%, and the revenue increased by 16.27% year-on-year to 7.227 billion, but it was still inferior to the market outside the province, and the revenue of the market outside the province increased by 17.54% to 7.929 billion yuan in the same period, accounting for 52.32% of the total revenue, and the gross profit margin was 76.92%, which was also higher than the provincial market.
The importance of Jiangsu Province to Yanghe is not only a base camp, Jiangsu liquor consumption is biased towards high-end products, and the net profit is greater than that of markets outside the province.
The main shocker facing the market in Yanghe Jiangsu Province is the present world. In 2019 and 2020, the revenue of the Jiangsu market accounted for 93.62% and 93.55% of the total revenue, respectively. In the first quarter of this year, jiangsu market revenue was 1.64 billion yuan, accounting for 92.72%. Although there is still a big gap compared with Yanghe shares, the gap is narrowing. In 2015, the revenue volume of the market in Jiangsu Province was less than a quarter of Yanghe's, and in 2020, it has reached more than 51% of Yanghe's scale.
It is worth mentioning that the force of this world happens to be the sub-high-end liquor market where Yanghe shares are located. In 2020, the revenue of special A+ products of more than 300 yuan has reached 3.069 billion, accounting for more than 60% of all liquor businesses.