Can the reduction and price adjustment alleviate the anxiety of Wuliangye?
China Science and Technology Investment" Zhang Ting He Ziyan.
In November this year, Kweichow Moutai (600519SH), Luzhou Laojiao (000568SZ), Yanghe shares (002304SZ) after the ex-factory price of some products was raised, Wuliangye (000858SZ) has become the focus on whether to follow up on price increases. A few days ago, Wuliangye finally ushered in the news of price adjustment.
On December 18, Zeng Congqin, chairman of Wuliangye, mentioned at the conference on joint construction and sharing that Wuliangye will take the opportunity to appropriately adjust the ex-factory price of the eighth generation of Wuliangye, and at the same time appropriately reduce the amount of investment, so as to accelerate the reasonable return to brand value. On the eve of the dealer conference, Wuliangye confirmed the news that the contract volume of the eighth generation Wuliangye will be reduced by about 20% next year.
Combined with the news of the reduction of the eighth generation of Wuliangye next year, the outside world generally believes that "opportunistic adjustment" is "opportunistic price increase". Focusing on Wuliangye's performance this year, the growth rate of revenue and net profit has slowed down, inventory backlog, inversion, and stock price downturn, ......Despite being the second largest in the industry, Moutai continued to distance itself from the front, and Yanghe shares desperately caught up, and Wuliangye's anxiety was difficult to hide.
Inventories are high
On December 19, the reporter checked Wuliangye Tmall *** and found that the price of the eighth generation Wuliangye had not changed from the 18th. Among them, the eighth generation of Wuliangye (52 degrees, 500ml) is 1070 yuan after the coupon**, and the double bottle activity** is 2130 yuan, and the discount is 1065 yuan per bottle. For the same product, the activity price of Wuliangye in Jingdong is 1050 yuan per bottle. The reporter checked Jingdong ** business, seven fresh supermarket, Pinduoduo 10 billion subsidies and other official authorized channels, the product also exists 989 yuan, 858 yuan per bottle.
At present, the official suggested retail price of the eighth generation Wuliangye is 1,499 yuan, while the transaction price in the end market is much lower than this level. The lower terminal transaction** reflects the lack of dynamic sales caused by overcapacity and weakening consumer demand in the liquor market in recent years.
In addition to the cold on the first day, the lack of dynamic sales of Wuliangye is also reflected in its high inventory. The performance report shows that in the first half of this year, the book value of Wuliangye's liquor inventory was 201.9 billion yuan, a year-on-year increase of 8712%。Flush data shows that the inventory at the end of the third quarter of this year was 1562.7 billion yuan, a year-on-year increase of 445%, accounting for 116%；At the end of the first quarter and the second quarter of this year, the inventory turnover rate of Wuliangye was 042 times, 066 times, a year-on-year decrease74%, until the third quarter of this year, its inventory turnover ratio increased to 096 times, a year-on-year increase of 326%。
However, can the reduction and price increase alleviate the problems behind Wuliangye?Generally speaking, in the peak season of liquor or when the market is good, price increases can directly stimulate performance. However, at present, the liquor industry has entered a new round of adjustment period, and many investors believe that it is easy to adjust the ex-factory price of the eighth generation of Wuliangye, but based on the current liquor market, its terminal is still difficult to shake. If, as mentioned above, the terminal of Wuliangye is difficult to improve, and the ex-factory price is raised, it may mean that the profits of dealers are compressed.
Looking back at Wuliangye's past several price increases, the terminal response was not positive. In 2013, the liquor industry entered the first period, and Wuliangye bucked the trend and raised the ex-factory price of the seventh generation of Wuliangye from 659 yuan to 729 yuan. However, under the dual pressure of poor sales and high dealer inventory, the batch price of the product is seriously inverted;At the same time, Wuliangye is facing the dilemma of a large number of distributors giving up their rights. In the end, Wuliangye had to increase the ex-factory price to 609 yuan or even 576 yuan in 2014From 2013 to 2014, Wuliangye's revenue and net profit recorded a double-digit declineFrom 2015 to 2016, the ex-factory price of the seventh-generation Wuliangye also fluctuated back and forth at 700 yuanAt the end of 2021, the ex-factory price of the eighth-generation Wuliangye increased to 969 yuan, but under the influence of the market, in 2022, the wholesale price of the eighth-generation Wuliangye fell to a low of 930 yuan in the case of a large volume of purchases by dealers.
Previously, Zhongtai ** also analyzed the price increase law of Wuliangye in the research report. Since 2015, Wuliangye's price increase has paid more attention to its own channel confidence and the reconstruction of the first-class system, and the success rate of Wuliangye's price increase is more related to the industry.
The reduction of the volume is often accompanied by the inversion and high inventory, and the liquor industry promotes terminal sales by reducing the amount of delivery, so as to achieve a high price. The reduction of Wuliangye can further alleviate the pressure on the market, and at the same time boost the confidence of the channel, which is conducive to the overall sales of products next year. At the same time, some investors are also worried that the reduction can be good for the overall sales situation, but there is also pressure on the overall performance and revenue growth.
It is worth mentioning that at the 2022 general meeting of shareholders held in May this year, Zeng Congqin emphasized that "Wuliangye should let dealers make money". At this dealer conference, Zeng Congqin also mentioned that it is necessary to make every effort to promote the improvement of channel profits.
Slowing performance growth
The high inventory and insufficient dynamic sales are reflected in the performance, and the growth rate of Wuliangye's operating income and net profit is under pressure. The performance shows that the revenue growth rate of Wuliangye in the first three quarters of 2020-2022 and 2023 will be ., respectively11%, and the net profit growth rate was .24%。Compared with the rapid growth in previous years, the growth rate of Wuliangye's operating income and net profit is slowing down.
According to Flush iFinD data, in the first three quarters of 2023, 20 A-share liquor companies achieved a total revenue of 3,1116.2 billion yuan, a year-on-year increase of 1591%；The total net profit attributable to the parent company was 1189800 million yuan, a year-on-year increase of 1892%。In contrast, Wuliangye's revenue growth rate is lower than the industry average of 38 percentage points, the net profit growth rate is lower than the industry average of 468 percentage points.
The performance stall has brought anxiety to Wuliangye. In 2013, Kweichow Moutai's revenue exceeded that of Wuliangye, and its position as the industry leader has not been shaken so far. The adjustment of the liquor industry is the best time for enterprises to overtake in corners. The slowdown in the growth rate of Wuliangye's performance not only widened the gap between it and Kweichow Moutai in terms of revenue scale, but also faced Yanghe shares and Shanxi Fenjiu (600809SH), Luzhou Laojiao and other opponents quickly caught up.
The performance report shows that Kweichow Moutai's operating income in the first three quarters of this year was 10326.8 billion yuan, with a revenue growth rate of 1848%；Net profit income was 5287.6 billion yuan, a year-on-year increase of 1909%。In addition, in the first three quarters of this year, the operating income of 20 A-share liquor listed companies exceeded 10 billion, including Kweichow Moutai, Wuliangye, Yanghe, Shanxi Fenjiu, Luzhou Laojiao, and Gujing Gongjiu (000596SZ) six enterprises. Among them, the revenue growth rate of Wuliangye is at the end of the six companies, and the net profit growth rate is in the penultimate position.
Wuliangye did not mention the reasons for the slowdown in performance, but mentioned the risks caused by macroeconomic uncertainty, complexity and the recovery of consumer demand less than expected in the financial report.
Since the announcement of the increase in holdings of 4-800 million companies** and the price adjustment and volume reduction and other more favorable news, Wuliangye's share price is still in the first trend. As of December 26**, Wuliangye's share price was 13432 yuan, the stock price is less than half of the highest point in 2021, and the negative sentiment of investors in the stock bar is also relatively high.
The reporter sent a letter to Wuliangye on issues such as the company's price increase and performance slowdown, but so far, no reply has been received.