In recent years, the leading and impressive range of whisky and red wine and strong aroma Baijiu has also been marked. Moutai should also have the basis for raising prices as a leading ingredient in Maotai flavor. At present, Maotai's market environment, competition pattern and the management's market-oriented reform determination are different from the past. The time is ripe to raise the price of the main single product Feitian Maotai. From the history of Maotai price increase, it can be clearly seen that the previous price increases have a large range. The guide price is usually close to the actual market price. Considering the current market situation, the price increase range may exceed expectations. On the one hand, the price increase will significantly increase profits, on the other hand, it will also be conducive to Maotai channel reform and market-oriented operation, straighten out the price belt for Maotai 1935 new products and contribute to the second growth curve. Kweichow Moutai Co.Ltd(600519) as a leader has a significant role in promoting the Baijiu industry. If the price increases smoothly, it will open up price space for other high-end and high-end Baijiu brands, and enhance channel confidence. The industry will enter the business cycle of increasing inventories, and next year, there will be rare opportunities for industrial investment.
Maotai is not what it used to be, The opportunity for price increase has emerged: (1) in the case of limited total volume, food and beverage companies generally adopt the vertical playing method. Since November this year, whisky prices have been intensively adjusted, and high-end wine and old wine have increased significantly. It can also be seen from the price adjustment of Huanghelou cigarettes and Wuliangye Yibin Co.Ltd(000858) traditional wine that the price limit of high-end tobacco and wine in China has been loosened recently. (2) From the history of Maotai's price increase, the current market environment is mature: the channel share of Maotai has been about 50% every time the price is increased since 2010. In the past two years, the scissors difference between Feitian's wholesale price and the ex factory price has continued to increase, and the channel share has been close to 70%. (3) The price increase can not only open the position with high-end competitive products, but also help itself to develop the 1000 yuan price band. From the external environment, Maotai flavor competitive products are mostly priced close to the retail price of Maotai, and failure to raise the price may damage the brand power. From the perspective of its own product structure, Maotai lacks the core large single product with the 1000 yuan price band. The launch pace of Maotai 1935 this year is slower than expected, or it may need to fly to adjust the price band to straighten out the price band. (4) The new chairman is determined to forge ahead and has a strong determination to carry out market-oriented reform. Since September, Maotai's market-oriented reform measures have been frequent and have achieved remarkable results. In the future, the means of administrative intervention is expected to gradually turn into a market-oriented and legalized system, and the most effective way is to narrow the large price difference between the retail price and the real wholesale price.
Direct price increases are most effective, Channel reform is based on the long term: (1) Direct price increase: there is a lot of room for adjustment, and the guidance price returns to the market. Calculation of potential price increase range: Historically, the channel price difference is the key to the price increase range. Feitian increases each time, and the price increase range / channel price difference is more than 18%. We expect that the complete cancellation of Feitian unpacking will be carried out together with the price increase, and the real rating after the cancellation of unpacking should be located in Feitian and the whole market Between Xiang Feitian and Xiang Feitian (about 3000 yuan). Assuming that the price increase range / the channel price difference before the price increase is 18%, considering that the historical maximum price increase range is 32%, it is estimated that the ex factory price after the price increase is 1299 yuan / bottle. Considering that the previous guided prices are close to the actual approved prices, we think that if Maotai increases the price, the guided price increase range may be higher. (2) The price dual track system can solve the symptoms but not the root causes, and the channel reform is more conducive to thickening long-term profits. We believe that the ex factory price dual track system does not solve the problem of channel blockage. Moreover, if the guide price can be increased, the factory price is natural, and there is no need to engage in the dual track system. This time, the foundation of the new Maotai cloud business is more solid, and the dealers are required to enter data, which will help find real consumers and serve consumers Consumers provide reliable and equal purchase opportunities. In the long run, it is also expected to recover some channel profits.
Greater profit elasticity and better long-term development. The guidance price is expected to increase synchronously with the ex factory price, which will help to thicken the profits of self operation and group purchase. In addition, the channel profit of non-standard products is still sufficient, and there is room for further price increase. Through the calculation based on the 2020 annual report data, it can be found that the corresponding profit elasticity under various price increase schemes of Feitian is considerable.
If Maotai raises the price, is there still room for imagination? We remain firmly optimistic. (1) After the price increase, the channel profit is still rich enough to support the next price increase; (2) with M2 expansion and consumption upgrading, the wholesale price will continue to rise for a long time, and Maotai can balance the price increase and volume to achieve more flexible long-term steady growth; (3) under the rationalization of price space and market-oriented operation, Maotai 1935 and other strategic new products are expected to become the second growth curve.
Investment suggestion: the current market environment, competition pattern and management's market-oriented reform determination of Maotai are different from those in the past. The time is ripe to raise the price of Feitian Maotai, the main single product. By combing and reviewing the history of Maotai's price increase, it can be clearly seen that Maotai's previous price increases have a large range, and the guidance price is usually close to the actual market price. Therefore, considering the current rating level and channel profits, the price increase range may exceed expectations. On the one hand, the price increase will significantly increase profits, on the other hand, it is also conducive to Maotai channel reform and market-oriented operation, and straighten out the price belt for Maotai 1935 new products. Kweichow Moutai Co.Ltd(600519) as a leader has a significant role in promoting the Baijiu industry. If the price increases smoothly, it will open up price space for other high-end and high-end Baijiu brands, and enhance channel confidence. The industry will enter the business cycle of increasing inventories, and next year, there will be rare opportunities for industrial investment. We are optimistic about Wuliangye Yibin Co.Ltd(000858) , Luzhou Laojiao Co.Ltd(000568) rationalizing the price system and achieving steady growth. Fenjiu, Yanghe, gujinggong, Jiugui Liquor Co.Ltd(000799) and other sub high-end and regional wines are also expected to continue their growth elasticity.
Risk warning: the risk of failure to implement the price increase as scheduled; The risk of repeated global outbreaks; The public data used in the research report may have the risk of information lag or untimely update; Deviation risk of profit elasticity measurement.
