Matters:
Kweichow Moutai released its first quarterly report for 2024, achieving total revenue of 46.5 billion yuan, an increase of 18.0% year on year; net profit to mother was 24.1 billion yuan, an increase of 15.7% year on year.
Ping An's point of view:
The pace of product launch is orderly, and revenue is growing steadily. 1Q24's total revenue was 46.5 billion yuan, up 18.0% year on year, laying the foundation for the annual revenue growth target of 15%. By product, 1Q24 Maotai's revenue was 39.7 billion yuan, up 17.7% year on year, and serial wine revenue was 5.9 billion yuan, up 18.4% year on year. By channel, 1Q24 wholesale agency channel revenue was 26.3 billion yuan, up 25.8% year on year, and direct sales channel revenue was 19.3 billion yuan, up 8.5% year on year. Among them, i-Maotai's revenue (excluding tax) was 5.3 billion yuan, up 9.0% year on year.
The gross margin and period expense ratio were stable, and taxes and surcharges increased slightly. 1Q24's gross profit margin was 92.6%, which was basically the same as the previous year. Taxes and surcharges accounted for 15.7% of revenue in 1Q24, +1.6pct year over year. 1Q24's sales/management/ R&D/ finance expense ratios were 2.5%/4.4%/0.1%/-1.0%, respectively, +0.5/-0.7/+0.0pct, respectively, compared to +0.5/-0.7/+0.0pct, respectively. The cost rate was stable during the period. 1Q24's net profit margin to mother was 51.8%, -1.0pct year-on-year. As of 1Q24, the company's contract debt was 9.5 billion yuan, an increase of 14% over the previous year, and dealers were more willing to pay.
Demand for high-end wine has stabilized, and the price of Flying Sky has steadily rebounded. Due to the large number of deliveries from dealers in March and the Xunfeng 375ml Flying Moutai exchange, the price of flying bottles declined in early April, but demand for high-end gifts and banquets was just what was needed. After short-term emotional adjustments, prices have steadily rebounded. According to today's alcohol prices, the wholesale price for a loose bottle on April 25 was 2,590 yuan/bottle. It has basically remained around 2,550 to 2,600 yuan for the past week, and has remained relatively stable.
The toolbox is adequate and maintains a “recommended” rating. As a leader in high-end liquor in China, the company has stable actual demand, sufficient tools on the performance side, continuous optimization of channels and product structure, and capacity expansion lays the foundation for long-term development. We maintain the 2024-26 net profit forecast of 887/1041/121.2 billion yuan. Maintain a “Recommended” rating.
Risk warning: 1) Impact of macroeconomic fluctuations: Liquor is greatly affected by macroeconomic fluctuations. If the macroeconomic downturn has a big impact on industry demand; 2) Consumption recovery falls short of expectations: under the slowdown in macroeconomic growth, national income and employment are affected to a certain extent, and the recovery in consumer spending capacity and desire in the short term may fall short of expectations, thus affecting the recovery of the liquor sector. 3) Increased risk of industry competition: Deterioration in the competitive landscape will disrupt and affect pricing in the liquor industry to a certain extent, causing adverse effects on the industry.