Event: Achieved operating income/net profit of 147.6.94/74.734 billion yuan (YoY +19.01%/19.16%); 23Q4 achieved operating income/net profit to mother of 444.25/21,858 billion yuan (+20.26%/+19.33% YoY).
Expectations: ① Actual performance for '23:15% higher than the revenue growth target in the '22 annual report & 17.2% higher than the previously forecast gross revenue/net profit growth rate of 17.2%/17.2% higher than previously forecast; ② 24-year performance target:
Total operating income increased by about 15% year on year, completing fixed asset investment of 6.179 billion yuan.
The volume of Maotai liquor increased significantly in '23, and the trend of upgrading the structure of the series continues. The company's alcohol revenue in '23 was +18.94%, with Maotai liquor/ series revenue of 1,265.89/20.630 billion yuan (+17.39%/+29.43% year-on-year). Against the backdrop of a significant increase in the volume of Maotai liquor but not as much as the increase in the tonnage price of the series wine, the revenue of Maotai liquor changed by -1.14 percentage points to 85.99% year on year. For details, see: ① Amount:
There was a marked increase in the amount of Maotai liquor. Sales volume of alcohol in '23 was 73,300 tons (+7.48% YoY), with Maotai/series liquor sales volume of 421/32,000 tons (+11.10%/+2.94% YoY); ② Price: Y'23 alcohol tonnage price 2.92 million yuan/ton (+10.67% YoY), of which the tonnage price of Maotai/series wine was 300.62/662 million yuan/ton (YoY +5.66%/+25.74%), and the trend of upgrading the serial wine structure continued; ③ Lee: 92.2% gross profit margin for alcohol companies in '23 11% (YoY + 0.10pct), of which the gross profit margin of Maotai liquor/series wine was 94.12%/79.76% (year-on-year change -0.07pct/+2.54pct).
i Maotai's revenue is over 20 billion yuan, and high-margin direct sales channels account for 46% of revenue. The company's wholesale agent/direct sales revenue in '23 was 799.86/67.233 billion yuan (+7.52%/+36.16%), of which direct sales channel revenue accounted for +5.77 percentage points year on year to 45.67% (“i Maotai” revenue in '23 was +88.29% to 22.374 billion yuan, gross margin +0.83 pct to 96.09% year on year). For details, see: ① Amount:
The volume of direct sales channels has increased significantly. Wholesale agent/direct sales volume was 576/15,600 tons, respectively (+1.14%/+39.77% YoY); ② Price: Distribution channel prices increased significantly. The wholesale agent/direct sales tonnage price was 138.77/430.02 million yuan/ton (+6.31%/-2.58% year over year); ③ Number of dealers: The number of dealers remained basically the same in '23, and the average dealer size changed 7.67% year on year to 36.592 million yuan/home.
The profit side is stable and improving, and both cash flow/contract liabilities are excellent. In '23, the company's gross margin/net profit margin changed by +0.10/+0.47 percentage points to 91.96%/49.64%, respectively. Excellent profit-side performance was mainly due to improved product structure and stable superposition rate performance: in '23, the company's sales expenses rate/management expense ratio (including R&D) changed +0.50/-0.60 percentage points year-on-year to 3.09%/6.57%, respectively. In addition, operating cash flow in '23 was +81.46% year over year to $66.593 billion (supporting dividends); year-over-year/month-on-month change in contract liabilities was -13.46/+2,731 billion yuan to $14.126 billion (reservoir abundance).
Production capacity was gradually released, opening up the ceiling for medium- to long-term volume increases. The actual production capacity of Maotai liquor/series wine in '23 was 572/42,900 tons, respectively (+0.69%/+22.41% YoY). The additional production capacity of Maotai Liquor/Series of wine-based wines will be put into operation in October/November 23, respectively. Both will be released in 24. Breaking the production capacity ceiling for the series, it is expected that the “sharp rise in volume and price” model will be fully realized.
Profit forecast: We believe that measures such as price increases for Flying Moutai, increased sales volume of non-standard products, and continued increase in direct sales share will open up room for price increases, and the continuous expansion and implementation of production capacity is expected to open up space for medium- to long-term volume increases, and the overall revenue target rate of 15% in 24 years is high. We expect the company's revenue for 24-26 to be 1750/2015/23.2 billion yuan (up 16%/15%/14% year on year), net profit to mother will be 870/1012/116.5 billion yuan (up 16%/15% year on year), respectively, and corresponding PE is 25X/21X/18X, respectively.
Risk warning: macroeconomic impact, weak consumption, industry policy changes, production capacity expansion falling short of expectations.