Guizhou Maotai Third Quarter Report: Direct Sales Of Liquor Nearly Doubled Year On Year, While Traditional Sales Increased By Only 1%

The third quarterly report of Guizhou Maotai (600519. SH) released on the afternoon of October 25 showed that the company continued to continue the double-digit growth trend of its main financial data under the market environment that the demand for 53 degree 500 ml Maotai liquor with 1499 yuan was in short supply.

According to the financial report, from January to September, Guizhou Maotai achieved an operating revenue of 67.2 billion yuan, a year-on-year increase of 10%, and a net profit of 33.8 billion yuan, a year-on-year increase of 11%. It has achieved the company's annual revenue growth target of 10%.

During the epidemic period, the three quarterly reports of Maotai in Guizhou showed two unprecedented characteristics

First, although the performance has double-digit growth, the year-on-year growth of revenue and net profit has shown a downward trend since this year. Guizhou Maotai, which had been driving fast for a long time, finally slowed down. Especially in the third quarter, the year-on-year growth rate of the two indicators fell to single digits.

Second, under the condition that the manufacturers are "free to accept and release", the marketing system of Maotai in Guizhou Province is undergoing earth shaking changes through the control of quantity and increment. In the first three quarters, the company sold 8.4 billion yuan of alcohol through direct sales channels, nearly three times the main business income of direct sales in the same period last year. However, the sales of traditional wholesale channels did not increase by more than 2%.

Up to now, Maotai Group has developed a total of 67 direct marketing channels covering the provincial capital cities and central cities of the country, initially completing the new marketing layout. However, from the perspective of the third quarter's performance growth, as the sales of traditional channels almost did not grow year on year, the peak season sales brought by volume control were less than expected by investors.

On the secondary market, on October 26, Guizhou Maotai stock price fell 4.22% to close at 1643 yuan / share, with the latest market value of 2.06 trillion yuan.

Traditional channels control volume and slow down performance growth

Since 2018, a large number of Maotai liquor distributors have not been banned since 2018.

The reform of Maotai liquor channel is the main battlefield.

From January to September this year, 41 more Maotai liquor dealers were banned, 151 in 2019 and 437 in 2018. According to the third quarterly report, as of the end of September, there were 2153 domestic and foreign distributors in Maotai, Guizhou Province, and nearly a thousand of them were cleaned up in the past three years.

Cleaning up illegal dealers is only the first step. At the same time, Maotai Group set up a group marketing company, combined with e-commerce and supermarkets, strengthened direct sales and flattening, formed a new marketing system of "dislocation development and mutual supplement", and made rapid progress in three years.

In the first quarter of this year, Guizhou Maotai's direct sales channel accounted for 8% of revenue, exceeding 10% for the first time in the first half of this year, which was 11.7% and increased to 12.5% by the end of September. This is unprecedented in the marketing history of Maotai, Guizhou. Before the national day of the Mid Autumn Festival, tmall supermarket, China Resources Wanjia, liquor convenience, jiuxian.com, etc. have put in more than 300000 bottles of cheap Feitian Maotai Liquor by at least 10 Maotai direct sales channels before the festival.

So far, Maotai Group has cooperated with 67 direct selling channels. According to the third quarter report, from January to September, revenue from direct sales was 8.4 billion yuan, compared with 3.1 billion yuan at this time last year.

At one end, it is a large quantity, while the other is a control.

The sales volume of Maotai liquor in traditional channels was restrained.

According to the financial report, from January to September, Maotai liquor sold 58.7 billion yuan through wholesale channels. The 21st century economic reporter found that this was almost the same as the sales revenue of the channel in the same period last year. This year's increase of 1 billion yuan is not more than 1% year-on-year. If we all calculate by the 500ml bottle of Feitian Maotai, the increased sales volume is less than 500 tons.

However, from January to September last year, Maotai liquor increased a lot by traditional channels. According to the calculation of 21st century economic reporter, compared with 48.3 billion yuan in the first three quarters of 2018, the revenue of wholesale channel increased by 19% from January to September last year.

It is precisely because in the peak season of this year, for the first time, manufacturers have realized no increase in traditional channels, but increased the supply of new channels. The proportion of wholesale channel revenue in revenue decreased from 95% in the first three quarters of last year to 87% in the same period of this year.

The traditional Maotai liquor dealers will no longer increase the quota on a large scale, which is the pain that Guizhou Maotai must go through on the way of marketing system reform.

According to the financial report, from January to September, the revenue of Maotai series liquor reached 7 billion yuan, with no growth compared with the same period last year. The growth of Maotai's sales scale depends on Maotai liquor. However, it is precisely because of the company's control over the wholesale channel, the revenue of Maotai liquor increased by 11.7% from the same period of last year, while the growth rate of last year was 17%.

Among them, the third quarter of peak season delivery decreased, resulting in Guizhou Maotai single quarter revenue and net profit growth in recent years fell to single digit. From July to September, the company realized revenue and net profit of 23.2 billion yuan and 11.2 billion yuan respectively, with an increase of only 8% and 6%. Affected by this, compared with the first quarter and the first half of the year, the growth of performance in the first three quarters further slowed down.

Adjustment of series liquor dealers

Series liquor is another battlefield of implementing two wheel drive in Maotai, Guizhou Province.

Compared with cleaning up the "bloodbath" of Maotai liquor dealers, the change of new and old Maotai series liquor dealers has been more than good.

Let's look at a set of numbers.

According to the statistics of the public financial reports, from 2018 to the end of September this year, 171, 503 and 301 Maotai series liquor dealers were banned, with 627, 34 and 14 increased in turn.

That is to say, in less than three years, nearly 1000 Maotai series liquor dealers have been changed for a round, and the overall number has also been greatly reduced. No wonder Li Baofang, then chairman of Maotai Group, said at the national distributor conference of Maotai Maotai liquor at the end of last year that many of the company's management had not met with the dealers of Maotai Maotai liquor, indicating that they had not visited enough.

Let's look at the difficulty of integration.

On the one hand, it is the group of series liquor dealers that has not been stabilized after adjustment, while the other is the revenue of series liquor which has not yet realized any growth.

On December 24 of last year, the 80000 ton series wine packaging workshop and supporting measures in Tanchang area of Renhuai City and other 11 infrastructure projects were started collectively, with a total investment of 15.8 billion yuan. Among them, 8.38 billion yuan is planned to be invested in the technical transformation and supporting facilities of 30000 tons of Maotai flavor liquor, and 650 million yuan has been invested according to the annual report of 2019. The expansion of series liquor production is another growth pole after Maotai liquor in Guizhou.

At the end of last year, at the 2019 Maotai Maotai series liquor dealers' Association, the target of 2020 series liquor was to "maintain revenue of 10 billion yuan (revenue of series liquor in 2019 was 9.5 billion yuan) and profit was 2.7 billion yuan, and the sales volume was still 30000 tons.

Now, more than half of the time has passed, and the revenue of this year's series of liquor is expected to achieve 10 billion. But in the long run, how to digest the increased capacity? There is still a long way to go for "two wheel drive" in order to realize the sale with favorable price, enlarge the sales scale and enhance the profitability.

"In terms of wine series, infrastructure is more important after sustained high growth." Li Baofang, the former chairman of Maotai Group, once said that the liquor series should be truly placed in the pillar position. From its own point of view, the development of series liquor still needs to make up for the shortcomings, including insufficient attention from the group level, weak market sensitivity of Maotai flavor liquor company, imbalance of product structure, weak market foundation and improper price strategy. Overall, the pillar status and role of the series of wine still have a lot of room for improvement.

On October 12, at the national autumn sugar and Wine Fair held in Jinan, "sauce meets Qilu · salute wave" Maotai Maotai flavor sharing tasting meeting was held. Gao Shan, deputy general manager of Maotai Group, led a team to the leading enterprises of Shandong IT industry and took the lead in promoting it.

This year, soy sauce enterprises Guotai liquor industry and Langjiu are queuing up to enter the listing process. Xiao Zhuqing, a liquor marketing expert, said that it was in 2019 that really pushed the sauce liquor into the air, with the sauce liquor sector growing by 20.3%. After the preparation of the past decade, sauce wine category is rapidly promoting the liquor industry iteration. When the sauce liquor enterprises have developed and expanded one after another, occupying the middle and high-end market except Maotai liquor, Maotai series liquor is also facing more fierce competition and challenges.