On the evening of October 31, 2023, Kweichow Moutai issued a product price adjustment announcement, stating that from November 1, 2023, the company's 53-degree Kweichow Moutai (Feitian, five-star) will be raised from the factory**, with an average increase of about 20%. This adjustment does not involve market guidance for the Company's products**.
After the price adjustment, the ex-factory price of 53 degrees Feitian Moutai became 1169 yuan. This is the first time in six years that the ex-factory price of Moutai's classic products has been adjusted. Seizing the precious window period of price adjustment and successfully raising the ex-factory price of Moutai, it is not only conducive to boosting the confidence of the liquor industry and investors, but also effectively curbing the downward trend of high-end products of 1,000 yuan liquor, which is conducive to maintaining stable development.
It is worth mentioning that on the day of Moutai's price adjustment announcement, the ** financial work conference had just ended. **The financial work conference released a positive signal and gave Moutai a valuable "right time" to adjust prices.
Moutai Ding Dong previously revealed in his speech at the Yabuli China Entrepreneur Forum, "Over the past 70 years, Moutai has stored hundreds of thousands of tons of base wine in the wine warehouse (according to the financial report, the data is 280,000 tons), which is a lot of trillions according to the current market value. ”
Rationally speaking, it is impossible for Moutai to retain 15% of the base liquor every year indefinitely, and the warehouse storage is also limited, so in the future, Moutai will slowly dispose of this batch of old liquor, or reduce the proportion of continuous storage, so that the current sales volume has a certain increase.
With the release of production capacity in the next two years, coupled with the fact that old wine cannot continue to be stored so much, it is obvious that Moutai will upgrade more kinds of products and increase the ex-factory price in disguise, which is actually a growth point for Moutai in the future.
So will expanding the share of direct sales in the future bring more profits? In the past two years, the share of growth in the direct sales part is mainly due to the quota of Moutai recovered from illegal distributors, for example, in 2019, Kweichow Moutai recovered 6,000 tons from illegal distributors.
With the completion of the "optimization" of Moutai's dealer network, the share of violations in the proportion of direct sales in the future may no longer have such a high growth in the past two years.
However, considering that the tonnage price of direct sales is higher, and sales through direct sales channels can stabilize and clear inventory, it is possible, and most of the increase in production capacity in the future may be sold through direct stores. From an investment point of view, it seems difficult to quantify at the moment how much direct sales will increase in the future and to what extent Kweichow Moutai's profits will be thickened.
For this part of the growth, we can only consider it as a margin of safety.