Description of the event
The company's total revenue in 2023 was 15.56 billion yuan (+18.04% YoY); net profit to mother was 74.734 billion yuan (YoY +19.16%), after deducting non-net profit of 74.753 billion yuan (YoY +19.05%), exceeding the target set at the beginning of the year for a 15% year-on-year increase in total revenue.
Incident comments
Revenue grew steadily throughout the year, and cash flow performance was stable: the company's total revenue in 2023 +△ contract liabilities were 149.214 billion yuan (+14.51% year over year), of which total 2023Q4 operating income +△ contract liabilities were 47.976 billion yuan (+15.87% year over year). The company received cash flow of $163.7 billion from sales of goods and provision of services in 2023 (+16.35%), of which the cash flow received from sales of goods and provision of services in 2023Q4 was $52,446 billion (+17.42% year over year).
Profitability has improved, and the contribution of price increases was initially reflected in the fourth quarter. The company's net profit margin for 2023 increased 0.47pct year over year to 49.64%, and gross margin +0.03pct year on year to 92.12%. The company's 2023Q4 net profit margin fell 0.19 pct year on year to 48.31%, with gross margin +0.67 pct year on year to 92.7%, and sales expenses ratio +1.14 pct year on year to 3.51% year on year. The increase in the Q4 fee rate is a normal fluctuation between quarters, and the cost rate has remained stable throughout the year. Revenue from the fourth quarter wine series increased by about 48% year on year, and the company's gross margin continued to rise in the context of serial wine sales. It is expected that on November 1, 2023, the company raised prices by leaps and bounds, which will contribute positively to the fourth quarter's gross margin.
The volume of Maotai liquor rose to a 5-year high, and the volume and price of the series rose sharply. In 2023, Maotai's revenue was 126.589 billion yuan (YoY +17.39%), while 2023 series revenue was 20.63 billion yuan (+29.43% YoY). Looking at the volume and price breakdown, the sales volume of Maotai liquor in 2023 was +11.1%, the highest value since 2018. It is expected that the volume of seasonal wine will contribute to a certain extent. The tonnage price of Maotai wine in 2023 is +5.7%. In terms of wine series, sales volume in 2023 were +2.9% year-on-year, and tonnage price increased sharply, achieving a sharp rise in volume and price. The tonnage price increased by 25% + for two consecutive years, which is expected to contribute the main increase in 1935.
The proportion of direct sales reached a new high, and i-Maotai contributed greatly. Direct sales revenue in 2023 was 67.233 billion yuan (+36.16% year over year), accounting for 46%, another record high. Wholesale revenue in 2023 was 79.986 billion yuan (+7.52% year over year), with sales volume +1.14% year over year and tonnage price +6.31% year over year. Volume and price recovered from a low base in 2022. In 2023, the “i Maotai” digital marketing platform achieved tax revenue of 22.374 billion yuan (+88.29% year over year) for alcohol, and 2023Q4 was 7.503 billion yuan (+119.32% year over year). iMaotai is still the main contribution of direct management in 2023.
Production is growing steadily, and the 24-year target is to maintain the target of around 15%. The 2024 target is to achieve a total revenue increase of about 15% compared to the previous year, and the overall guidance plan is still quite positive. In '23, Maotai produced 57,200 tons of wine-based wine (+0.69% year over year), and produced 4.29 tons of wine series wine (+22.41% year over year). Production achieved steady growth.
Set the tone and grow steadily. Looking at this year, in terms of volume, it is expected that the 375ML sales volume of products such as Maotai and Han sauce will make a certain contribution to sales. At the same time, the 20% increase in Flying Sky's price will contribute significantly to the annual price, and it is expected that the company will still be able to achieve its annual growth target. Looking at the long term, Maotai currently has sufficient adjustment methods, channel profits are still at an all-time high, and there is still plenty of room for long-term growth. The company's EPS is expected to be 70.51/83.07 yuan in 2024/2025, corresponding to the latest PE of 24/20 times, maintaining a “buy” rating.
Risk warning
1. Industry demand falls short of expectations;
2. Increased market price fluctuations, etc.