Financial Services Association, April 19 (Reporter Zhu Wanping) A-share liquor distributor Huazhi Liquor Company (300755.SZ) handed over its annual “report card” tonight. In the context of a market with weak consumption, the company's net profit for 2023 fell short of brokers' estimates, and many of the goals previously set by the company were unfulfilled.

This evening, Huazhi Liquor Store released its 2023 financial report, achieving total revenue of 10.121 billion yuan, a year-on-year increase of 16.22%, net profit to mother of 235 million yuan, a year-on-year decrease of 35.78%; net profit after deduction of 179 million yuan, a year-on-year decrease of 46.86%.

Taken together, Huazhi Liquor's net profit last year fell short of most brokers' expectations. According to Wind data, since October of last year, 18 brokerage firms have predicted the company's 2023 performance, with an average net profit forecast of 271 million yuan. Among them, Fangzheng Securities had the lowest forecast value for the company's net profit in 2023, at only 250 million yuan, but Huazhi Liquor has not actually reached it.

Regarding the rise in revenue but the decline in net profit, at tonight's results meeting, Huazhi Liquor Company executives confessed that it was mainly affected by falling gross margin, etc.

On a quarterly basis, Q4 Huazhi Liquor Store achieved revenue of 1,868 billion yuan last year, an increase of 52.11% over the previous year, and net profit to mother of 4.349 million yuan, a year-on-year decrease of 65.96%. The gross margin for Q4 in a single quarter was 9.64%, down 4.4 percentage points year on year.

By product, Huazhi Liquor Company achieved revenue of 9.395 billion yuan, 487 million yuan, and 143 million yuan respectively last year, up 20.02%, -19.86%, and -4.42% year-on-year. Among them, the company's liquor gross margin was 9.24%, a year-on-year decrease of 3.73 percentage points.

Looking at volume and price breakdown, last year, Huazhi Liquor Company achieved sales volume of 8090.15 kiloliters, a year-on-year increase of 7.5%. The tonnage price was 1161.33 yuan/liter, up 11.65% year on year. Wine products achieved sales volume of 2094.67 kiloliters, down 11.95% year on year, and the tonnage price was 232.33 yuan/liter, down about 9% year on year.

Fine wines have always been the focus of the development of Huazhi Liquor. The company has also always stated that it wants to become an internationally influential marketer and service provider for fine drinks. However, the latest financial report shows that in an environment of weak consumption, Huazhi Liquor's boutique wine business is under pressure. Last year, Huazhi Fine Liquor Trading Co., Ltd., a subsidiary of the company responsible for the sale of fine wine, achieved revenue of 1,556 billion yuan, a year-on-year decrease of 58.4%, and net profit of 109 million yuan, a year-on-year decrease of 26.97%.

Lotus wine is one of the core fine wines mainly sold by Huazhi Liquor. Lotus Liquor is a tripartite partnership between Huazhi Liquor and Hebei Zhongyan and Maotai Town. Hehua Data Technology Co., Ltd., a joint venture subsidiary of Huazhi Liquor Holdings, is responsible for promotion and operation. Last year, Hehua Data Technology Co., Ltd. achieved revenue of 247 million yuan, a year-on-year decrease of 41.49%, and net profit of 197,000 yuan, a year-on-year decrease of 31.45%.

Previously, Huazhi Liquor had anticipated that lotus wine would reach a volume of more than 1 billion yuan in 2023, doubling its growth rate. Looking at it today, this goal has not been achieved.

Selling famous liquors such as Feitian Maotai and Wuliangye is a major advantage of Huazhi Liquor. However, since November of last year, the factory prices of Feitian Moutai and Wuliangye have increased one after another. Currently, the actual market prices of Maotai and Wuliangye have not increased accordingly; profits from selling alcohol have not increased but declined. In response to this, Huazhi Liquor store executives also confessed tonight that they will be affected to a certain extent.