Recently, as a steering director of many local Baijiu liquor companies such as Guizhou Chun, Zhijiang liquor, Guizhou liquor and Yongle liquor, Zhu Wei earned a lot of enthusiasm in the search. It not only concerns the topic of “10% increase in the price of old products in Zhijiang liquor” but also allegedly “minors’ propaganda of liquor”.
“The competition of Chinese liquor industry has entered the era of brand, quality and large-scale competition.” Cai Xuefei, an expert of China wine industry think tank, told the Securities Daily that most of the head liquor enterprises have brand value advantages and cultural advantages, so the brand premium is high, and the consumer demand for the head liquor enterprises is further increased, which promotes the benign growth of the performance of the head Liquor Enterprises. By contrast, the development space of local liquor companies is further compressed, resulting in the Matthew effect of the Baijiu market.
According to the National Bureau of statistics, from 2018 to 2021, the total output of liquor making enterprises above Designated Size Baijiu reached 871.2 million liters, 785.95 million liters, 740.73 million liters and 715.6 thousand liters, showing a declining trend year by year.
In the same time, the decline of Baijiu sales volume is more obvious. According to the National Bureau of statistics, after sales volume reached 1358 kilo liters in 2016, Baijiu sales volume dropped sharply, and dropped to 729.6 000 liters in 2020, with a drop of nearly 50%.
The 2021 earnings data released by Baijiu listed companies showed that the liquor companies with high-end brands achieved steady growth in both revenue and net profit during the reporting period. The performance of regional brand liquor enterprises is not optimistic.
Kweichow Moutai Co.Ltd(600519) released the annual report data of 2021, which shows that during the reporting period, the company achieved a revenue of 109464 billion yuan, an increase of 11.71% year-on-year; The net profit was 52.46 billion yuan, a year-on-year increase of 12.34% Wuliangye Yibin Co.Ltd(000858) released annual report shows that in 2021, the revenue reached 49.721 billion yuan, with a year-on-year increase of 17.01%; The net profit attributable to the parent company was 17.327 billion yuan, a year-on-year increase of 19.13%.
As a representative of local liquor companies, Zhijiang liquor industry was once a leading Baijiu liquor industry in Hubei Province, but its performance has plummeted in recent years. According to public data, from 2012 to 2019, the net profit of Zhijiang liquor industry continued to decline from 178 million yuan to loss, of which the losses in 2018 and 2019 were the most serious, reaching 37.07 million yuan and 86.2 million yuan respectively.
” Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) and other top liquor enterprises’ performance increases with the upgrading of consumption, aesthetics and taste.” Yang Guang, chairman of Zhengyi strategic consulting organization, told the Securities Daily that the Baijiu industry will concentrate on the head, concentrate on the production areas and concentrate on the sauce and wine. Local liquor enterprises did not keep up with the pace of consumption upgrading, so their development was slow.
In the past two years, capital has been widely deployed in Baijiu industry. The Securities Daily reporters combed the relevant information and found that from 2020 to 2022, Baijiu liquor industry was the intensive period of M & A, reaching more than 10.
In August 2020, Weiwei Co., Ltd. sold 71% of the shares of Zhijiang liquor industry to Jiangsu variety arts group for 461.5 million yuan. In October of the same year, Shanghai Yuyuan Tourist Mart (Group) Co.Ltd(600655) acquired Jinhui Liquor Co.Ltd(603919) 38% shares. In August 2021, Huarun wine Holding Co. Ltd. and Jiaxing CDK Tucker investment partnership were to acquire 60% stake in Shandong leading liquor enterprise Jingzhi Baijiu liquor limited company by way of capital increase. In February 2022, China Resources war investment, a subsidiary of China Resources Group, planned to acquire 49% equity of its controlling shareholder golden seed group, becoming the second largest shareholder of Anhui Golden Seed Winery Co.Ltd(600199)
Baijiu Baijiu has a high gross profit rate, and liquor stocks are very active in capital market, which are the reasons why capital is in favor of Baijiu industry. Cai Xuefei said.
“The future opportunity for local liquor enterprises is to build provincial leading enterprises, follow the pace of consumption upgrading, and build mainstream and high-end products.” Yang Guang said that some local liquor enterprises are already moving forward to provincial leading enterprises. For example, the Baijiu field in Shandong province was originally lack of leading enterprises in the province. After purchasing Huarun Jingzhi liquor, Huarun can not only provide financial support, but also help Jingzhi wine industry to accelerate the market layout with the advantage of Huarun’s network channel.
