The performance announcement exceeded expectations, product volume and price rose sharply, growth resilience was strong, and the “buy” rating was maintained
Kweichow Moutai's total revenue in 2023 was 15.56 billion yuan, +18.0% year on year, net profit of 74.73 billion yuan, +19.2% year over year. The growth rate exceeded the previous performance forecast (previously announced revenue +17%, net profit +17%). We raised our profit forecast for 2024-2025 and added a profit forecast for 2026. The net profit for 2024-2026 is 886.9 billion yuan (+1.35 billion yuan), 104.53 billion yuan (+2.43 billion yuan), and 122.12 billion yuan respectively. %, +17.9%, and +16.8%, EPS is 70.60 (+1.07) yuan, 83.21 (+1.94) yuan, and 97.21 yuan, respectively. The current stock price corresponds to PE of 24.3, 20.6, and 17.6 times, respectively, maintaining a “buy” rating.
The volume of Maotai liquor is being released at an accelerated pace, and the price of series wine is contributing more
In 2023, Maotai achieved revenue of 126.59 billion yuan, +17.4% year over year, sales volume of 42,000 tons, and +11.1% year over year. The price of tonnage was significantly faster than in 2018. Tonnage price optimization was mainly due to the increase in the share of ultra-high-end and non-standard products; in 2023, revenue of other wine series was 20.63 billion yuan, +29.4% YoY, and +25.7% YoY. The sharp increase in serial wine prices was due to the rapid growth rate in 1935.
The proportion of direct sales channels continues to rise
Direct sales channel revenue in 2023 was 67.23 billion yuan, +36.2% year-on-year, accounting for +5.8pct to 45.7%; wholesale channel revenue was 79.99 billion yuan, +7.5% year-on-year, accounting for -5.8pct to 54.3%. Among them, the “i Maotai” digital marketing platform achieved revenue of 22.37 billion yuan in 2023, +88.3% over the same period last year. The vast majority of subsequent increases in Maotai liquor will continue to be in direct sales channels facing the C-side, and the share of direct sales will further increase.
Cash flow is good, advance payment indicators are normal, and profitability continues to improve in Q4 2023 with debt of 14.13 billion yuan, compared to Q3 + 2.73 billion yuan. Cash received from sales of goods and provision of services in 2023 was $163.7 billion, +16.4% over the same period last year. Cash received from sales of goods and services in Q4 2023 was $52.45 billion, +17.4% over the same period last year. Benefiting from product structure improvements, gross margin increased by +0.09pct to 91.96% in 2023; tax and additional/sales expense ratio/management cost rate/R&D cost rate/financial expense ratio were +0.27pct/+0.50pct/-0.61 pct/-0.01pct/-0.10pct, respectively. The increase in the sales expense ratio is mainly due to intense competition in the price of wine series and an increase in market expenses. Net profit margin +0.47pct to 49.64%.
Risk warning: Macroeconomic fluctuations have led to a decline in demand, and expansion outside the province falls short of expectations, etc.