Liquor Pattern Changes: In The First Half Of The Year, The Growth Of Maotai And The Fifth Five Year Plan Slowed Down, And The Secondary High-End Competed For The C Position

With the Mid Autumn Festival and National Day approaching, the liquor industry has entered the traditional sales peak season, and the liquor industry has entered the key stage of payment preparation dynamic sales. In the first half of the year, the total profit of the liquor making industry exceeded 100 billion yuan for the first time. In the second half of the year, the liquor industry will still maintain structural prosperity.

According to the latest data released by China Light Industry Information Center, from January to July, China's liquor making industry continued the "long" trend in the first half of the year. The total operating revenue of wine making enterprises above Designated Size in China reached 531.5 billion yuan, an increase of 17% year-on-year; The total profit reached 120.3 billion yuan, a year-on-year increase of 28%.

These two data once again reached the peak of the prosperity value of the brewing industry since the founding of the people's Republic of China. In line with the general upward movement of liquor product structure, the Ministry of industry and information technology announced that from January to July, liquor production of liquor making enterprises above Designated Size in China reached 4.08 million kiloliters, up 9% year-on-year, but still recovering growth.

Looking at the 19 listed companies in the liquor industry, according to the financial reports released, in the first half of the year, only JINZI and Huangtai liquor companies suffered losses, and the growth rate of revenue and net profit of most companies has greatly exceeded that of the same period in 2019 before the outbreak of the epidemic. Liquor "pacesetters" have left the impact of the epidemic far behind, and the liquor industry has become one of the first industries out of the trough, running all the way to create a number of new records.

Liquor is not only the profit champion in the liquor making industry, but also plays an important role in the consumer industry. Its high scenery benefits from the value promotion brought by consumption upgrading. On September 9, the National Bureau of statistics released data that in August, the national consumer price rose 0.8% year-on-year, with an expected 1%. Among them, 1% in urban areas and 0.3% in rural areas; From January to August, the average consumer price of China's residents increased by 0.6% over the same period last year.

Consumption upgrading brings more market space for medium and high-end liquor. According to the published semi annual report, Yanghe shares, Shanxi Fenjiu, shede liquor, Shuijingfang, Jiugui Liquor and other second and third line liquor enterprises compete for the second high-end price band, and their performance has reached new highs, and they are fighting for the C position, and black horses are frequent. However, the growth rate of the first-line liquor companies represented by Guizhou Maotai is slowing down in the fierce market competition.

At the beginning of the 14th five year plan, the rank and pattern of liquor industry have been changing in the first half of the year.

Total profit of liquor listed companies reached a new high

According to the Ministry of industry and information technology, from January to June, the total operating revenue of wine making enterprises above Designated Size in China reached 469.1 billion yuan, up 19% year on year; The total profit reached 108.4 billion yuan, up 29% year on year.

In the first half of the year, the total profit of the brewing industry exceeded 100 billion yuan for the first time, and the growth rate of both revenue and profit has exceeded the growth rate of the same period in 2019. This means that the brewing industry has entered a new high-quality development stage at the beginning of the 14th five year plan.

According to the "guidelines for the development of China's liquor industry during the 14th five year plan" issued by the China Liquor Association, the sales revenue of China's liquor industry will reach 1418 billion yuan by 2025, 70% higher than that at the end of the 13th five year plan, with an average annual growth rate of 11%; The profit was 334 billion yuan, an increase of 86% over the end of the 13th five year plan and an average annual increase of 13%.

According to the annual average growth target of 13%, in the first half of this year, the total profit growth rate of Enterprises above designated scale in the national brewing industry has far exceeded the established growth rate.

Liquor making industry is the main creator of the profitability of liquor making industry.

In terms of revenue in the first half of the year, the total revenue of 19 liquor listed companies was close to 160 billion yuan, accounting for about 1 / 3 of the total revenue of the liquor making industry. However, according to the calculation of 21st century economic reporter, in the first half of this year, the total profits of 19 liquor listed companies were as high as 80 billion yuan, accounting for 80% of the total profits of enterprises in the whole liquor making industry! Among them, Guizhou Maotai alone accounts for more than 30% of the total profit of the brewing industry.

The high growth rate brought by the expansion of consumption is the direct driving force for the continuous production of high benefits in the brewing industry.

According to the national economic operation data released by the National Bureau of statistics, the per capita disposable income was 17642 yuan and the consumption expenditure was 11471 yuan in the first half of the year. Among them, the consumption expenditure of food, tobacco and alcohol by residents nationwide was 3536 yuan, accounting for 30.8%, with a year-on-year increase of 14%. The consumption of food, tobacco and alcohol of urban and rural residents were 4378 yuan and 2446 yuan respectively, up 12% and 18% year on year. In liquor consumption expenditure, liquor is the main part of traditional consumption.

The growth rate of secondary high-end liquor exceeded that before the epidemic

In the first half of the year, the share prices of the listed liquor companies such as shede liquor, Jiugui Liquor and Shuijingfang were far higher than those of Maotai and Wuliangye in Guizhou Province. The share prices and the performance of the second and third tier liquor companies which increased the proportion of high-end liquor went out of the same two curves.

According to the financial report, Jiugui Liquor achieved a revenue of 1.7 billion yuan in the first half of the year, an increase of 137% over the same period of last year, and a net profit of 500 million yuan, a year-on-year increase of 176%. In the first half of the year, the net profits of Shuijingfang, shede and highland barley wine increased by about three times, to 380 million yuan, 730 million yuan and 75 million yuan respectively. The revenue of Shanxi Fenjiu exceeded 10 billion yuan for the first time in the first half of the year, with a year-on-year increase of more than 75%.

Sorted out, among the 19 liquor listed companies, the performance growth of Yanghe shares, Shanxi Fenjiu, Shuijingfang, shede liquor, Jiugui Liquor, Jinhui liquor, Yingjia gongjiu, Jinshiyuan and Yilite not only increased significantly on a year-on-year basis, but also far exceeded that in the same period in 2019.

Although the growth rate of Kouzijiao in the first half of the year has exceeded that in the same period of 2019, its revenue and net profit have not yet recovered to the pre epidemic level. In the first half of last year when the epidemic happened, the revenue of Shunxin agriculture increased year on year, but in the first half of this year, the company's net profit even declined for two consecutive years. Laobaigan liquor's performance growth in the first half of this year is not as fast as that in the same period of 2019, and its revenue and net profit are still in recovery.

Why many liquor enterprises in the second and third tier experienced the epidemic, but their performance rose sharply and reached a record high?

Shuijingfang said in the semi annual report that since the first half of the year, the overall situation of macroeconomic recovery at home and abroad has improved. With the effective control of the domestic epidemic situation and the intensive introduction of consumption stimulus policies, the liquor industry has achieved a restorative development. From the perspective of the industry, "Matthew effect" is continuing, and the trend of the whole industry to concentrate on famous liquor and high-end liquor is becoming more and more obvious. The top famous liquor enterprises have expanded their production capacity, and the high-end brand and product upgrading and innovation have become one of the main trends in the liquor industry, which brings sustainable growth space for the secondary high-end and high-end liquor.

In the context of consumption upgrading, the market price of Feitian Maotai liquor remains high, which also brings growth opportunities for medium and high-end products with a price of 1000 yuan or less.

The reporter of 21st century economic report noted that the rapid growth of the second and third tier liquor enterprises showed the following characteristics:

First, the proportion of medium and high-end liquor increased. In the first half of the year, the revenue of medium and high-grade liquor of Yanghe shares and Luzhou Laojiao were 12.5 billion yuan and 8.2 billion yuan respectively, accounting for 83% and 89% of the company's liquor revenue. In the first half of the year, the original liquor series of Gujing tribute wine sold 5 billion yuan, accounting for 73% of the company's liquor revenue. The revenue of Shuijingfang series liquor in the first half of the year was 1.78 billion yuan, accounting for 96% of the company's revenue.

It is precisely because of the rapid growth of high-end liquor that many second and third line liquor enterprises develop rapidly. In the first half of the year, the internal reference liquor of Jiugui Liquor increased by 86%, the series of Jiugui Liquor increased by 170%, and the medium and high-grade liquor of shede liquor industry increased by 149%.

Second, the proportion of medium and high-end liquor revenue increased, which also improved the company's gross profit margin. Financial report shows that in the first half of the year, the overall gross profit margin of Luzhou Laojiao was 86%, increased by 4%. Among them, the gross profit rate of medium and high-grade products, mainly Guojiao 1573, exceeded 90%, an increase of 2%. The gross profit rate of Jiugui Liquor also increased to 80%, of which the gross profit rate of domestic reference series was as high as 92.58%.

The growth rate of "Mao Zedong and the Fifth Five Year Plan" slowed down

In contrast, in the fierce market competition, the performance growth of Maotai and Wuliangye in Guizhou is relatively slow, which is not as fast as that in the same period in 2019.

According to the semi annual report, in the first half of the year, Guizhou Maotai achieved revenue and net profit of 49 billion yuan and 24.6 billion yuan respectively, up 11.7% and 9% year on year. Since June, the stock price of Maotai in Guizhou has been falling from 2200 yuan per share to more than 1500 yuan, and it did not rise slowly until the end of August.

In fact, after the first quarter of Guizhou Maotai's net profit attributable to listed companies increased by a single digit year-on-year, the company's revenue and net profit have returned to double-digit growth track in the second quarter of this year.

In the first quarter of this year, the net profit of Maotai in Guizhou increased by 6.5%, mainly due to the sharp increase of consumption tax paid by the company. In the second quarter of this year, the company realized a net profit of 10.7 billion yuan, a year-on-year increase of 12.6%, and a revenue of 21.8 billion yuan, a year-on-year increase of 11.5%.

However, after consulting the financial report, the reporter of 21st century economic report found that in the second quarter of this year, the year-on-year growth rate of revenue and net profit of Maotai in Guizhou exceeded the growth rate of the same period in 2020, but the year-on-year growth rate of net profit was less than that of 26% in the same period of 2019.

According to this year's business target disclosed in the annual report of 2020 of Guizhou Maotai at the beginning of the year, the total business income increased by only about 10.5% compared with the previous year.

The slow growth of performance is related to the 100 billion yuan revenue volume of Maotai in Guizhou, and is also directly related to the environmental constraints on its production capacity and the lack of expectations for the price increase of its main product, Feitian Maotai liquor, with a volume of 500 ml. According to the semi annual report, the company's direct sales revenue has increased to 10 billion yuan in the first half of the year, accounting for 20% of the total revenue. Although Maotai in Guizhou continues to increase its direct sales channels, the growth rate brought about by structural improvement and channel adjustment is far less than the overall volume or price increase.

The semi annual report shows that in the first half of the year, Wuliangye, the leading enterprise of Luzhou flavor liquor, grew by 19% in revenue and 22% in net profit. Back in the first half of 2019, the company's performance growth was 26.7% and 31% respectively.

In the first half of this year, Wuliangye's East China and West China markets, which Wuliangye relies most on, were dragged down by the growth rate. In the first half of the year, Wuliangye's liquor revenue totaled 34.1 billion yuan, a year-on-year increase of 21%. The company's eastern and western regions are 9.9 billion yuan in revenue, but the year-on-year growth is only 15% and - 7%. The southern region increased 73% year on year. Wuliangye explained that the regions with larger growth rate were due to the relatively large impact of the epidemic on the markets in the southern, northern and central regions in the same period of last year, and the operating revenue base was relatively low.

The mode of competition has changed

With more fierce competition, the industry structure and ranking are changing.

Take the liquor listed companies with a revenue scale of 2 billion yuan as an example, including shede liquor industry, Kouzijiao, Yingjia gongjiu, Shuijingfang, Jiugui Liquor, Laobaigan liquor, etc. There is little difference in the scale of revenue, but the level of profit is very different, and the rate of sales expenses is very different. In the first half of the year, Shuijingfang closed with a revenue of 1.8 billion yuan and a performance of 380 million yuan, with a sales expense of 580 million yuan and a sales expense rate of more than 30%. In the second quarter, due to its large investment, it even suffered losses. In the first half of the year, Jiugui Liquor achieved a net profit of 500 million yuan with a sales expense rate of 21%. In the first half of the year, shede achieved revenue of nearly 2.4 billion yuan, but the sales expense rate was only 14%.

Shanxi Fenjiu finished the counter attack in the first half of the year, and its revenue was in the fourth place, surpassing Luzhou Laojiao. Although its net profit ranked fifth after Luzhou Laojiao and before Gujing gongjiu, the net profit gap between Luzhou Laojiao and Luzhou Laojiao was narrowed to 700 million yuan.

Under the condition that the output of liquor is still recovering, there is more competition among liquor enterprises. Taking Anhui Province as an example, Anhui Province is neither the largest liquor producing province nor the largest liquor consumption market. However, it is dominated by four local listed companies such as Gujing gongjiu, Kouzijiao, Yingjia gongjiu and jinzhongjiu. The competition between regional liquor enterprises and foreign invaders is extremely fierce.

Gujing gongjiu, the overlord of Huizhou liquor, analyzed in the semi annual report that since entering the 21st century, the development of China's liquor industry can be roughly divided into three stages.

Before 2012, benefited from the rapid development of macro-economy, the rapid growth of urban and rural residents' income and the continuous rise of liquor demand, liquor production and sales continued to grow at a high speed, and the liquor industry showed a booming supply and demand. During this period, national liquor brands and local regional famous liquor enterprises developed rapidly. Under the background of the increase of liquor market volume and price, the sales revenue and total profit of liquor enterprises have been growing rapidly.

From the second half of 2012 to 2016, China's macro-economy has entered a period of adjustment again. The state has successively launched a series of policies to restrict the consumption of high-end liquor with public funds, such as "eight regulations" and "six prohibitions". Business consumption and government consumption and other consumption scenarios are limited, consumption demand is rapidly declining in the short term, and liquor industry has entered a period of deep adjustment. After 2012, liquor production growth and revenue growth slowed down simultaneously.

Since the second half of 2016, the liquor industry began to recover, and the consumption demand of end users increased, driving the overall income and profit growth of the liquor industry. Since 2017, medium and high-end liquor has recovered. Gujing gongjiu believes that in the future, the promotion of secondary high-end liquor is the main driving force for the development of liquor industry, benefiting from the upgrading of consumption and the change of consumption concept. From the national market point of view, the competitive advantage of enterprises comes from the influence of their own brands, product styles and marketing operation mode. In a single regional market, the competitive advantage of an enterprise depends on its brand influence, regional consumers' recognition and comprehensive marketing ability.

Shuijingfang believes that in the face of industry stock competition and sales growth pressure, the competition among wine enterprises has entered the stage of brand competition; On the consumer side, major wine companies began to pay more attention to the cultivation of consumers. Brand experience and consumer loyalty have gradually evolved from "good means" to "core advantages". At the same time, liquor channel mode is further deepening to fine and complex. With the upgrading of consumption, consumer demand is increasingly diversified. However, the company expects that Luzhou flavor liquor will remain the largest market share in the next five years.

In an interview with 21st century economic reporter, song Shuyu, assistant director of China liquor industry, pointed out that the recovery period since the gradual recovery of liquor industry in 2016 is a V-shaped one. The first characteristic of the recovery period is that the production and sales volume of liquor have decreased year by year, reflecting the changes of market supply and demand and consumption demand; Second, the sales revenue of products realized the V-shaped reversal in the middle of the 13th five year plan, but the sales revenue per unit product increased year by year, and the market bargaining power of liquor products was gradually improved; Third, the profit level is increasing year by year, which shows the high-quality development process of liquor industry from quantitative change to qualitative change, and also reflects consumers' pursuit of rational and healthy consumption demands.

He said that China's liquor industry is gradually shifting from product centered to market and consumption centered, in order to adapt to the rapid transformation of market structure, and has achieved phased results under the new trends of supply side reform, consumption upgrading and Internet +. "Only by" brand force + product force + channel integration force "can we win in the market," he said.