The five who beat the iron and the third one who runs the water!
At present, the competition pattern of the absolute head of the liquor industry has long been formed, and Kweichow Moutai and Wuliangye rank among the top two in terms of revenue and profit.
And the third position,However, in Yanghe shares, Luzhou Laojiao and Shanxi Fenjiu, the current revenue and profit volume of the three companies are roughly the same.
But before 2019, there was no Shanxi Fenjiu in this competitive landscape, and the company was also the fastest growing leader in liquor since 2019.
The data shows that in just three years from the mid-report in 2020 to the mid-report in 2023, Shanxi Fenjiu's revenue has increased by 175%, which is more than three times that of Moutai; The net profit increased by 315%, the growth rate was more than 5 times that of Moutai, and it far exceeded Pien Tze Huang, Tong Ren Tang, Hengrui Pharmaceutical and other pharmaceutical companies.
This can also make Shanxi Fenjiu, Luzhou Laojiao, and Yanghe shares break their wrists all of a sudden.
However, even with such a rapid performance, Fenjiu is not outstanding in the liquor consumption track that values stable profitability, and in the past ten years, only 6 companies such as Moutai, Jinshiyuan, Kouzijiao, and Gujing Gongjiu have continuously exceeded 15% in the ROE, and there is no Shanxi Fenjiu.
At the same time, after the high growth of performance, Shanxi Fenjiu is facing two major difficulties;
One is the slowdown in performance growthThe company's profit growth rate reached 72After the ultra-high-speed growth of 8%, the growth rate has fallen, and the net profit growth rate in the first three quarters of 2023 will only be 3275%, this decline in growth represents a decrease in growth stability for the growth track.
One is the surge in the amount of inventoryFrom the financial report data, we can clearly see that the inventory scale of Shanxi Fenjiu has surged from 6.3 billion yuan in 2020 to 102 in the third quarter of 20237.6 billion yuan, inventory pressure increased.
So, what is the reason for this situation in Fenjiu?
Retrospective data, we found that before 2017, the performance growth rate of Shanxi Fenjiu was in single digits, far less than the double-digit growth of Moutai and Luzhou Laojiao, and the products were still low-end liquors focusing on civilians.
The company's strong growth came from after 2017, because in 2017, the company ushered in the pilot reform of state-owned enterprises, especially after the strategic entry of China Resources in 2018, Fenjiu carried out an in-depth layout.
This includes high-end and expansion outside the province.
Data shows that from 2017 to 2022, the company's revenue in the province increased from 3.6 billion yuan to 10 billion yuan, but the revenue outside the province soared from 2.4 billion yuan to 16 billion yuan, an increase of nearly 6 times.
Especially since 2020, the company has continued to focus on business outside the province, and by 2022, the revenue outside the province will account for more than 61%, which is a very rapid increase.
Seeing this, everyone seems to feel that it is not right, because since 2020, the consumption of liquor and other liquor has been significantly suppressed under the influence of masks, why the growth rate of Fenjiu is even better than before 2020, and it has become the highest growth rate in liquor.
This also has to talk about the business model of the liquor industry to maintain performance growth, which is to press the goods to the distributors, which is simply understood that the liquor companies press the products to the distributors through the upstream discourse power, and stabilize the performance by collecting the payment from the distributors, and do not care too much about whether they can sell it.
This is the common strategy of liquor leaders, and it is also the key to maintaining performance growth in the past three years.
So, for pressing goods, how does Shanxi Fenjiu do?
On the one hand,Compared with other leading liquor enterprises and distributors, there are certain restrictions on the upper amount even if the goods are pressed.
But for Shanxi Fenjiu, it is a direct large-scale new distributor, because the new distributors will be larger at one time. According to the data, in the past three years, the number of the company's dealers has surged, and the number of dealers outside the province has increased from 1,268 in 2017 to 3,637 at the end of 2022, and the number of these dealers has supported the large-scale expansion of revenue outside the province.
On the one hand,In order to put leverage on dealers, it is not enough to greatly increase dealers, in order to press more goods, Fenjiu takes the way of credit sales, and implements receivables financing measures, that is, dealers can take bank acceptance bills as payment for goods, and bills of exchange can be leveraged, which greatly supports the scale of dealers to take goods.
The most typical is accounts receivable financing, by the end of 2021, Shanxi Fenjiu's receivables financing is as high as 441.2 billion yuan, if you count the leverage, this amount can be imagined.
Therefore, it is not so much that the performance of Fenjiu has increased because of the good sales, but rather that the dealers have developed well, regardless of whether there is consumption, and only the new dealers can bring higher channel inventory capacity. This has also enabled the company to achieve a growth rate that exceeds that of its peers in the past three years.
Success is also Xiao He, defeat is also Xiao He!
The business model of pressing goods is not unusual, as long as the dealer can run through the channel model, the product advantages are outstanding, and it can still be turned, Moutai has always been like this.
But for Fenjiu, this model is beginning to suffer. Under the sluggish demand for mid-end consumption, and the brand power of Fenjiu is not strong, dealers are facing huge pressure to collect payments, resulting in them starting to dump goods at low prices, such as the company's large single product blue and white Fen 30 revival version guide price of 1199 yuan, channel dump price of less than 900 yuan, ** upside down obvious.
In 2021, there will be 628 new dealers, but only 113 will be added in 2022, and more than 100 will only be added in the first half of 2023.
The pressure on this channel sales is also reflected in the indicator of contract liabilities, which reached 73 in 20217.6 billion yuan, which will decline to 5.1 billion yuan in the third quarter of 2023.
The slowdown in performance and the surge in inventory are ultimately the backlash of the business model.
Speaking of which, one thing may come to mind, that is, the longer the liquor is left, the more precious it becomes.
So, is it really risky for Fenjiu to lose such a high amount?
Inventory is not unusual, Moutai's current inventory is as high as 40 billion at most, and Yanghe and Luzhou Laojiao also have more than 10 billion inventory, but only Fenjiu has the highest inventory risk.
First, the proportion is different.
Inventory is mainly divided into raw materials, semi-finished products, inventory commodities, etc., and for liquor enterprises, it is mainly semi-finished products and inventory commodities.
Semi-finished products generally refer to the base wine, the foundation of high-end wine; Inventory items are finished sake that is waiting to be sold.
Half of Shanxi Fenjiu's inventory is inventory goods, that is, the backlog of finished liquor that cannot be sold. Although Moutai's inventory is high, it is mainly the amount of base wine, and the proportion of finished wine in the inventory is only 4%, and the base wine can appreciate without worrying about impairment. Even Wuliangye and Luzhou Laojiao account for less than 20% of their finished wine inventory.
It can be seen that Fenjiu is a real inventory pressure.
Second, it does not maintain value.
Fenjiu is a fragrant liquor, and the fragrant process is very simple, the cost is low, the threshold is low, there is no collection value, and the storage time of the fragrant liquor can not be too long, more than two or three years of liquor will be searched.
Therefore, the expansion of seedlings has also slowed down the growth rate of Shanxi Fenjiu and huge inventory pressure, which is difficult to improve in the short term under the fierce competition of second-tier liquor.
The company's second largest shareholder, China Resources Huachuang Xinrui, has made a substantial ** in the third quarter of 2023, which is also the first ** since participating in the mixed reform in 2018.
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**: Flying Whale Investment Research