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Sauce-flavored liquor is one of the five major flavor types of liquor in China, among which Moutai is the most well-known. In recent years, the soy sauce and wine track has sprung up, and the competition has become more anxious.
Zhenjiu Li Du, as the second sauce-flavored liquor company listed in addition to Moutai, made enough gimmicks when it was listed. It's just that under the fame, it is actually difficult to deserve. Judging from the fact that Zhenjiu Li Du has been listed for nearly a year, its share price has been lower than the issue price of 9 yuan per share for a long time.
Since Zhenjiu Li Du was the first to be successfully listed before Guotai Liquor and Langjiu, why is the capital market not very optimistic? There may be several reasons for this. First of all, the performance of Zhenjiu Li Du is very dependent on the single brand of "Guizhou Zhenjiu". Although the group has four liquor brands covering three flavors, it is still difficult to hide the dilemma of "walking on one leg".
Secondly, the distribution system of Zhenjiu Lidu is relatively chaotic, and problems such as upside down have become stubborn diseases. Finally, the soy sauce wine market has reached the middle of the market, and the competition has intensified. As the waist brand of the soy sauce wine market, "Guizhou Zhenjiu" has not yet been able to form a solid moat.
After successfully impacting the capital market, Zhenjiu Li Du still faces many tests, and its future may need to be marked with a question mark. The goal of "soy sauce and wine second" must at least wait until Zhenjiu Li Du enters the threshold of 10 billion revenue before he can give it a go.
Not favored by the capital market, listing is not a lifesaver
Zhenjiu Lidu is a multi-brand integrated liquor company. Zhenjiu Lidu owns the soy sauce liquor "Guizhou Zhenjiu", the fragrant liquor "Lidu", the strong fragrant liquor "Koupin", and the thick sauce and fragrant "Xiangjiao". However, because more than 60% of Zhenjiu Lidu's revenue is contributed by "Guizhou Zhenjiu", the outside world usually regards Zhenjiu Lidu as a soy sauce wine company.
In April 2023, Zhenjiu Li Du was successfully listed on the Hong Kong Stock Exchange. On the day of listing, its stock price broke and fell sharply. It wasn't until September that Zhenjiu Li Du was included in the new list of Hong Kong Stock Connect, and the stock price went all the way. Unfortunately, the momentum of the good news was short-lived.
In the first financial report released after the listing of Zhenjiu Li Du, its performance can be said to be remarkable. In Zhenjiu Li Du's 2023 semi-annual report, a total revenue of 351.9 billion yuan, a year-on-year increase of 15%; Net profit 80.3 billion yuan, 22%. Such a report card of both revenue and profit growth did not satisfy investors.
On October 13, 2023, the ** price of Zhenjiu Li Du is 1234 Hong Kong dollars, the ** price on January 30, 2024 is 79 Hong Kong dollars, in less than three months, the stock price fell as much as 3598%。
Perhaps, under the appearance of steaming and prosperous performance, Zhenjiu Li Du has many hidden worries that discourage investors.
From 2020 to 2023, in the statements of the semi-annual report, Zhenjiu Lidu's gross profit margin has never exceeded 58%. This figure is quite inadequate compared with other wine companies in the A** field. There are more than 20 listed wine companies, and their average gross profit margin is also around 64%.
Zhenjiu Lidu is positioned as a high-end soy sauce wine brand, but its gross profit margin is at the bottom of the listed wine companies, which makes it difficult for investors not to doubt the profitability of Zhenjiu Lidu.
While expanding production on a large scale, while advertising on a large scale, this is an important strategy for Wu Xiangdong to successfully build Jinliufu in the past, and now it is copied to Guizhou Zhenjiu as it is. It's a pity that it backfired, and the path of Guizhou Zhenjiu's replication of Jin Liufu was not smooth.
In terms of advertising investment, Zhenjiu Li Du is unrelenting. Zhenjiu Lidu's sales and marketing expenses climbed from 400 million yuan in 2020 to 13400 million yuan, and the proportion of marketing expenses has also increased from 168% rises to 229%。On the other hand, the most profitable "Mao Wulu", its marketing expenses did not exceed 12% in the first three quarters of last year.
As the pillar of the group's revenue, in the first half of 2023, Guizhou Zhenjiu's revenue will be 230.6 billion yuan, a year-on-year increase of 149%。The data may seem good, but in fact, during the reporting period, the sales of Guizhou Zhenjiu fell by 227 tons. The reason why the sales have been increased is due to the price increase.
In addition to Guizhou Zhenjiu, the three brands of Lidu, Kaixiao and Xiangjiao contributed a total of 30% of the revenue. Among them, the gross profit margin of Kaixiao is less than 40%, which is a laggard.
Since he went to the Hong Kong Stock Exchange to ring the bell that year, Zhenjiu Li Du's attention has not been low. Especially when Zhenjiu Li Du successfully snatched the title of "Second Stock of Sauce Wine", the aura on his body was much brighter. The problem is that a successful listing is only the beginning of a single-plank bridge, and there are thousands of troops on the bridge. Can Zhenjiu Li Du withstand the pressure and gain a firm foothold?
Zhenjiu under the self-lowering price, ** system chaos
If the financial report data is just a glimpse, then the chaos of the distribution system seems to reflect the problem of Zhenjiu Li Du's hard work in the soy sauce wine market from the side.
In 2021, Guizhou Zhenjiu won the first place in the Double 11 liquor sales list on the Jingdong platform. This dark horse that suddenly broke into sight defeated Wuliangye and Fenjiu, which was very surprising.
But after learning the inside story, it made people laugh and cry. Guizhou Zhenjiu's large single product "Zhen Fifteen", its guide retail price is 3,800 yuan to 3,900 yuan box, but on the day of Double Eleven, Guizhou Zhenjiu *** pressed the ** to more than 1,900 yuan a box. The ** that consumers can buy is lower than the purchase price of Zhenjiu's distributors in various channels.
In this operation, consumers were happy, and dealers cried. For Guizhou Zhenjiu's behavior of "beating teammates", many distributors expressed anger and incomprehension.
After all, the ** of high-end liquor requires a lot of money to "maintain". Guizhou Zhenjiu personally broke through the bottom line, and also made the achievements of many dealers who worked hard to maintain it go to waste. There are also voices that believe that this is a strategy of Guizhou Zhenjiu in order to break through in the soy sauce wine market.
The game of Guizhou Zhenjiu's self-depreciation is still continuing. In Zhenjiu Li Du's prospectus, the retail price of a single bottle of Zhenjiu 15 is 799 yuan to 999 yuan. At present, on the official *** of Tmall, it only takes more than 400 yuan to win. When high-end liquor is downgraded to sub-high-end, is this contrary to the original intention of the product's original positioning?
Wu Xiangdong's business territory belongs to the model of casting a wide net, and he has been involved in many well-known liquor brands, but he has never stepped out of a truly national liquor brand. Even regardless of the national market, in Guizhou, the base camp of soy sauce wine, there are strong enemies in front and brave chasers in the back.
From the perspective of the overall development of the industry, the layout of the soy sauce wine market still has high requirements for the comprehensive strength and team ability of the enterprise. Guizhou Zhenjiu wants to get ahead, it is indeed a long way to go, and it is no wonder that Guizhou Zhenjiu wants to find another way.
After Jingdong Double 11 became an instant hit in 2021, Guizhou Zhenjiu has indeed gained a lot of popularity. But Zhenjiu Lidu's inventory has also increased from 17 at the end of 20203.7 billion yuan exploded to 43. in the first three quarters of 2022$1.9 billion.
In the end, whether the abacus was lost or earned, perhaps this account was only clear to Zhenjiu Li Du.
The soy sauce wine market is sweeping the sand, and Zhenjiu Li Du lacks stamina
In the soy sauce wine market, Moutai can be said to have given a group of younger generations infinite reverie and beautiful hopes. Of course, no one has the courage to challenge Moutai's authority, and their goal is very consistent - Moutai second. The runner-up position behind Moutai has become a strategic highland for major soy sauce and wine companies.
Guizhou Zhenjiu, the original "Moutai Liquor Trial Liquor". As the name suggests, it is a liquor made in full accordance with the Moutai production process. In fact, there have been many distilleries in history that have competed to imitate Moutai, and there are not a few who have the same calculation as Zhenjiu. In Guiyang alone, there have been so-called "Jin Mao, Ding Mao, Wang Mao" and so on, but none of them have ever succeeded.
In addition, the story of Zhenjiu's "ex-situ" Moutai experiment has become a history that has gradually faded into the industry. It's hard to get your hands on it now.
In 2009, VATS Group, which started with Jinliufu, officially took over Zhenjiu. Wu Xiangdong, chairman of VATS Group, has a very direct intention, "striving for the second place in soy sauce wine". It's just that the development of Zhenjiu is not as smooth as Wu Xiangdong imagined.
The cellaring time of soy sauce wine is destined to make Zhenjiu unable to achieve a significant increase in production capacity in the short term, so in the early stage of development, Zhenjiu Liquor once faced the problem of shortage of supply.
Even in recent years, Zhenjiu Li Du still has to rely on a large number of sauce-flavored base wines purchased from third parties. From 2020 to 2022, Zhenjiu Lidu purchased a total of more than 30,000 tons of base wine. This is also one of the main reasons why Zhenjiu Lidu's gross profit margin is lower than the industry average.
Looking at its competitors, in addition to Qinghualang's promotion of "one of the two major sauce-flavored liquors", Guotai Liquor also shouted the slogan of "the second largest sauce-flavored liquor in Moutai Town". Obviously, the value label of "scarce" and "high-end" Moutai leaves a huge space for imagination for other followers.
It's just that from 2021 onwards, as the soy sauce wine craze gradually fades, the soy sauce wine market will also return to rationality. Judging from the market signals in all aspects, the soy sauce and liquor industry is gradually entering the era of stock competition from the era of horse racing, and the head soy sauce enterprises led by Moutai have strengthened their production expansion, squeezing the market share of small and medium-sized soy sauce and liquor enterprises to a certain extent.
Kweichow Moutai is far ahead of the industry with a revenue scale of 100 billion, Xijiu and Guotai Liquor belong to the second echelon with a revenue scale of 10 billion, and Jinsha Liquor and Zhenjiu Li Du are in the third echelon.
According to the "Consumption Trend of Sauce-flavored Liquor" released by iResearch, the market for sauce-flavored liquor is gradually centralized. Miscellaneous small enterprises and OEM sauce wine were eliminated, and the waist sauce wine companies such as Lang Liquor and Zhenjiu Liquor were also inevitably killed - the soy sauce wine ** appeared upside down.
Large enterprises are running faster and faster, and small and medium-sized enterprises are getting slower and slower. Zhenjiu Lidu's performance growth rate will increase from 159% in 2021 to 15% in 2023. Obviously, Zhenjiu Li Du's performance explosiveness is unsustainable.
The problem is not over yet, the soy sauce and wine fever is cooling down rapidly under policy intervention, as evidenced by the failure of Guotai and Langjiu to sprint to IPO. The competition in the soy sauce wine market is extremely fierce, and the competition for the market of soy sauce wine companies other than Moutai has entered a state of anxiety. In general, in the ever-increasing industry challenges, Zhenjiu Li Du has put forward more difficult business torture.
Conclusion
At present, the pattern of soy sauce and liquor will not change much in a few years, and for Zhenjiu Li Du, problems such as relying on a single brand and low gross profit margin may become "roadblocks" on its future development path.
Fortunately, there are still many VCs who are firmly optimistic about the liquor market. Entering 2024, most liquor stocks have changed the decadent trend of last year, and the entire sector is thriving. In the next few days, how to increase market share and move to a higher echelon may be the topic that Zhenjiu Li Du should think about the most.