In February 3rd, the Baijiu giant Wuliangye Yibin Co.Ltd(000858) revealed a plan for future capacity growth in a resolution of the board of directors.
On January 28, Wuliangye Yibin Co.Ltd(000858) issued the announcement of the resolution of the 100th meeting of the Fifth Board of directors. According to the company’s “14th five year plan” strategic development plan, the company will increase the original wine production capacity. In order to meet the demand of production capacity growth, the company will expand and transform the koji making workshop, mainly including koji making workshop and relevant supporting facilities, which will be constructed in two phases. The total investment of the project is estimated to be 2.75 billion yuan.
With regard to the improvement of production capacity, at the 2020 shareholders’ meeting on June 18 last year, Li Shuguang, Secretary of the Party committee and chairman of the company, Secretary of the Party committee and director of the joint stock company, proposed that Wuliangye Yibin Co.Ltd(000858) will strengthen the construction of high-quality production capacity and increase the production of famous wines by increasing high-quality production capacity and increasing the rate of Wuliangye Yibin Co.Ltd(000858) famous wines. During the 14th Five-Year, Wuliangye Yibin Co.Ltd(000858) will add 120 thousand tons of raw liquor, the total capacity of Baijiu will reach 220 thousand tons, the storage capacity of original liquor will reach 1 million tons , and the position of the leading liquor storage base will continue to be maintained.
At the end of last year, Wuliangye Yibin Co.Ltd(000858) announced the workshop transformation plan, with a total investment of about 84.526 million yuan.
It is worth noting that, according to the data, the liquor production of Wuliangye Yibin Co.Ltd(000858) has declined for two consecutive years since 2018. The production capacity of in 2020 was 158800 tons, 33200 tons less than 192000 tons in 2018.
In terms of performance, after the year-on-year growth rate of operating revenue of Wuliangye Yibin Co.Ltd(000858) reached 32.61% in 2018, it declined in 2019 and 2020, and the year-on-year growth rate of operating revenue in 2020 decreased to 14.37%.
However, more than Wuliangye Yibin Co.Ltd(000858) one company plans to expand production capacity.
Another Baijiu giant Kweichow Moutai Co.Ltd(600519) announced in January 26th that the company will invest 4 billion 110 million yuan to implement the “14th Five-Year” Maotai wine Xishui and min dam phase I construction project, and the funds needed are raised by the company itself. The construction site of the project is located in Tongmin Town, Xishui County, Guizhou Province. After the completion of the project, a series of liquor can be formed, with a liquor production capacity of about 12000 tons, a koji production capacity of about 29400 tons and a liquor storage capacity of about 36000 tons. The construction period is 24 months. Back in September 2018, Kweichow Moutai Co.Ltd(600519) announced that according to the development strategy of the listed company, it was decided to invest in the construction of 30000 ton Maotai flavor series wine technical transformation project and its supporting facilities, and the total investment of the project is estimated to be no more than 8.384 billion yuan.
On January 26, the State Council issued the “opinions on supporting Guizhou to blaze a new path in the western development in the new era”. It is mentioned that the advantage of Maotai Baijiu liquor origin and main producing areas in Chishui river basin should be played and the important Baijiu production base should be built. Promote the all-round and all chain digital transformation of traditional industries, and guide traditional business forms to actively carry out Wuxi Online Offline Communication Information Technology Co.Ltd(300959) , all-channel, customized and accurate marketing innovation.
Ping An Securities said that from the consumer side, according to channel research, the current sauce and wine fever is significantly lower than that in the early stage, the price transmission of some products is blocked, the dynamic sales of OEM products and second and third tier products are not smooth, and the phenomenon of goods rejection is exacerbated. However, the head brand performance is still good, and the industry concentration is expected to improve. From the supply side, the State Council supports the construction of sauce and wine producing areas in Chishui River Basin. The head sauce and wine enterprises actively expand production and carry out the construction of relevant supporting measures, which is expected to drive the revenue scale of head enterprises to rise steadily.
