Core views
In the first quarter, alcohol sales were completed at 45.643 billion yuan (+17.83%), forming a two-wheel drive for Maotai Liquor (+17.75%) and series wine (+18.39%), and successfully got off to a good start.
The company continued to optimize the channel structure, and the 24Q1 distribution channel achieved a high growth of 25.78% after initiatives such as flying price increases and non-standard marketing. By strengthening marketing, conveying Maotai's “American culture” from CCTV advertisements to urban lighting, and continuing to promote consumer activities, the Maotai brand market foundation has been further consolidated. The slower profit growth rate than revenue growth is mainly due to an increase in crystal and additional rates. Looking ahead to 2024, the company has set a positive target of 15% year-on-year increase in total revenue. Considering that Flying Moutai has completed price increases and optimized structures for non-standard and series wine products, it is expected that high-quality growth will continue throughout the year.
occurrences
The company released its first quarterly report 2024.
In the first quarter of 2024, the company achieved total revenue of 46.485 billion yuan, an increase of 18.04% year on year; achieved net profit of about 24.065 billion yuan, an increase of 15.73% year on year; realized net profit deducted from non-mother was 24.051 billion yuan, an increase of 15.75% year on year.
Brief review
A good start continues the high growth trend, and the leading players have sufficient momentum for growth
Liquor revenue reached 45.643 billion yuan in 24Q1, an increase of 17.83% over the same period. Under the high base for the same period, it achieved a good start with high growth. By product, 24Q1 Maotai contributed 39.707 billion yuan (+ 17.75%) to revenue, and series wine contributed 5.936 billion yuan (+ 18.39%) to revenue. In the first quarter, the company is expected to increase sales of Maotai liquor and specialty liquors, increase the proportion of non-standard sales of Humao, etc., and increase the 20% increase in the Fei Sky price increase by the end of 23 to contribute to the increase in performance.
By channel: In the first quarter, direct sales channels contributed 19.319 billion yuan in revenue (+8.49% year over year), the share of direct sales decreased by 3.64 pcts year on year to 42.33%, wholesale channels contributed 26.324 billion yuan in revenue (+25.78% year over year), and the “i Maotai” e-commerce platform contributed 5.343 billion yuan in revenue without tax (+8.96% year over year). The company continuously optimizes the channel sales system, boosts dealer confidence, and forms a balanced development situation with direct sales and distribution.
Liquor sales performance was good during the peak season in the spring of 2024. Maotai followed the trend and achieved sales volume, and the launch of Lichun and Dahan season wine came to a successful conclusion; the company continued to strengthen the integration of digital reality and cultural exploration, and Sanhua Maotai and Xunfeng Liquor are expected to continue to empower the brand. Flying has panicked price drops in some channels in the short term, and is more resilient under price fluctuations. In terms of wine series, it is expected that the large single product 1935 will continue its potential, and “two-wheel drive” will be further consolidated.
Strengthen marketing, cultivate consumption and consolidate the market, and the cash flow performance is excellent.
The 24Q1 company's gross profit margin was 92.73%, up 0.01pcts year on year, and the net profit margin to mother was 51.77%, down 1.04pcts year on year.
(1) Gross profit margin: Maotai's price increase resonated with the volume of distribution channels, and remained relatively stable overall.
(2) In terms of cost ratio: ① 24Q1 The company's sales expenses increased by 0.53 pcts to 1.92%. With the theme of “Beauty Era”, the New Year's Day Spring Festival lit up the Maotai Light Show in many cities at home and abroad, and reappeared on CCTV's “News Broadcast”. “Maotai 1935 · Seek China” swept away the Grand Canal to convey “happy” culture, and launched the “Ingenuity Inherit · Porcelain Talk China Campaign.” Launched Dragon Year Sauce-flavored Chocolate, all over the country actively carried out marketing activities, and market investment increased; ② The management fee rate decreased by 0.67 pcts to 4.44%, which continued to show the effect of the company's scale; ③ the tax and additional rate increased by 1.62 pcts to 15.49%.
In terms of cash flow, 24Q1's sales revenue was 46.257 billion yuan, up 29.34% year on year, and net cash flow from operating activities was 9.187 billion yuan, up 75.17% year on year. Maotai dealers were highly motivated to repay. The balance of contract debt at the end of March was 9.523 billion yuan, up 14.33% year on year.
By deepening market-based reforms, Maotai can be expected to grow at high quality in 2024.
In November 2023, the factory price of the 53° Flying Sky was raised by 20%. Currently, the transaction price in the Flying Moutai market is around 2,800 yuan. The channel is profitable, and the winery's price increase is relatively smooth. In terms of channels, innovations such as iMaotai, Xunfeng Platform, and third-generation specialty stores contributed significantly to the optimization of the company's channel structure. On the product side, non-standard products such as seasonal wine continued to unleash Maotai's investment value. In 1935, Maotai completed upgrades and broke through the 10 billion mark, launched a new product of Han Sauce (Inherited Ingenuity), and sorted out the classic price system for Golden Prince and Sauce-flavored Sauces.
Looking ahead to 2024, the company aims to achieve a 15% increase in total revenue over the previous year and complete fixed asset investment of 6.179 billion yuan. The company is expected to further market-based reforms, continue to strengthen the brand foundation, and drive the company's operations to continue to improve.
Profit forecast and investment suggestions: The company is expected to achieve revenue of 175,066 billion yuan, 2020.35 billion yuan, and 229.769 billion yuan in 2024-2026, +16.28%, 13.73% year-on-year; realized net profit of 87.014 billion yuan, 101,168 billion yuan, and 115.847 billion yuan, compared to +16.43%, +16.27%, and 14.51% year-on-year; corresponding EPS is 69.27 yuan, 80.54 yuan, 92.22 yuan; corresponding to 2024- The 2026 dynamic PE is 24.68X, 21.23X, and 18.54X, respectively.
Risk warning: The recovery in consumer demand has fallen short of expectations. Economic growth has slowed down due to factors such as the macro environment in the past 2 years, and national income growth has also been affected. The pace of recovery in the short to medium term residents' income growth and the pace of increase in consumption power may fall short of expectations; economic recovery falls short of expectations. The pace of improvement in corporate cash flow for company products in high-end commercial alcohol consumption scenarios may fall short of expectations; food safety risks, although food safety issues have always been a hot topic of concern for consumers in the industrial chain in recent years, food safety issues have always been a hot topic of concern for consumers in the industrial chain. Continuously The level of production quality control has been raised, but since the industrial chain is long and there are many links and enterprises involved, there are still risks related to food quality and safety.