① Kweichow Moutai announced that according to relevant documents of the Guizhou Provincial People's Government, Zhang Deqin was recommended as the chairman of the company, and that Ding Xiongjun no longer hold the position of chairman and director of the company. ② Before taking over Maotai, Zhang Deqin was the chairman of Guizhou Xijiu. Earlier, he worked for the Maotai Group for more than 10 years and was an “old Maotai native.” ③ Some people in the industry believe that Zhang Deqin may fine-tune some policies, but the strategy for Maotai University will not change.
Financial Services Association, April 29 (Reporter Zhu Wanping) Maotai's change of command was finally settled. This evening, Kweichow Moutai (600519.SH) announced that according to relevant documents of the Guizhou Provincial People's Government, Zhang Deqin was recommended as the chairman of the company, and that Ding Xiongjun no longer hold the position of chairman and director of the company.
Before taking over Maotai, Zhang Deqin was the chairman of Kweichow Xijiu. Earlier, he worked for the Maotai Group for more than 10 years. He is a “native of Lao Maotai” and has held positions such as a member of the Party Committee and Deputy General Manager of the Maotai Group.
(Photo: Kweichow Moutai headquarters building Financial Association reporter Zhu Wanping)
According to public information, Zhang Deqin graduated from Guizhou University majoring in fermentation engineering and is from a science class. Since 1995, Zhang Deqin, who has just graduated, began with the most basic production and brewing experience at the grassroots level of Maotai Distillery for more than ten years, and later became the chairman of Xi Jiu (originally part of the Maotai Group). In June 2019, Zhang Deqin was transferred from Maotai Group and briefly joined Guizhou Modern Logistics Industry Group. In July 2022, after Xi Jiu “became independent” from the Maotai Group, he “returned to the oven” to become the chairman of Xi Jiu, and so on.
“Zhang Deqin is a cadre who grew up from the grassroots level in Maotai. He is quite familiar with Maotai's development history and development logic. He dared to act and tell the truth. Now that he has returned to his key position at the top of Maotai, it can be said that he is well received by the public.” Xiao Zhuqing, an independent commentator on the Chinese wine industry, told the Financial Federation.
“I personally think Zhang Deqin is a practical person and quite pragmatic. He is a humble person and has a low attitude.” A Xijiu dealer who had close contact with Zhang Deqin told the Financial Federation reporter.
Zhang Deqin's pragmatic personality is also reflected in his work as a wine drinker. For example, Xijiu recently suspended the supply of products from many dealers in the second quarter because the inventory rate of these dealers was higher than the red line, and they often scan codes from other places (there is a suspicion of “collusion”). Although market analysts believe that Xi Jiu's move is aimed at controlling prices during the off-season, this has also been confirmed by some industry observers. They believe that in the current context where consumption is weak and channel inventories are still high, Xi Jiuquan sacrifices short-term sales and also needs to maintain the normal order of prices and markets. This move is logical and also a practical move.
As the new helm, will Zhang Deqin bring major changes to Maotai's existing strategy? Regarding this, the liquor dealers mentioned above believe that there may be minor adjustments, but the general strategy will not change. “He (Zhang Deqin) is not someone who likes new standards. At the beginning, when he went to Xijiu to become the chairman of the board, he only slightly changed the slogan that was initially promoted.”
According to convention, in addition to being the chairman of the Maotai Group, Zhang Deqin will also take over as chairman of Kweichow Moutai — the “king” of A-shares with a market capitalization of 2 trillion dollars. What is its attitude towards the capital market, particularly Kweichow Moutai's small and medium shareholders? It has also attracted attention from the outside world.
However, judging from Zhang Deqin's past remarks, he still attached great importance to Maotai's shareholders. In 2018, Zhang Deqin once said in a speech, “First of all, Maotai belongs to the country and contributes to the country; the second is for shareholders, dealers, and Maotai employees. We hope to gradually improve in the future, and everyone will actually work hard for the company and the brand.”
However, after taking office as Chairman of Maotai, Zhang Deqin also faced quite a few challenges. Foremost among them is the pressure on performance. In the past few years, its predecessor, Ding Xiong Military, expanded its share of direct sales, launched various new products and price increases, etc., increasing Kweichow Moutai's overall revenue from 109.464 billion yuan in 2021 to 15.56 billion yuan in 2023, with a compound annual growth rate of more than 17%; during the same period, net profit of 52.46 billion yuan to 74.734 billion yuan, a compound annual growth rate of more than 19%. And in the current context of weak consumption and declining industry, how can Zhang Deqin continue this steady growth rate of performance?
“Another problem Zhang Deqin is that currently Maotai's direct sales account for close to 50%, further increasing the share of direct sales performance, which may trigger Maotai's traditional channel partners to passively slack off work or switch sides with high-net-worth private traffic resources, and this may affect the foundation of the Maotai channel.” Xiao Zhuqing believes that in addition, Maotai 1935, which is positioned in the 1,000 yuan price range, directly competes with Wuliangye and Guojiao 1573, and also faces the question of whether to preserve quantity or guarantee price.
“Overall, Zhang Deqin, the chairman of Maotai, needs to balance the demands of local governments, investors, dealers, and employee groups at the same time. Among candidates who can balance the needs of all parties, Zhang Deqin is probably suitable.” Xiao Zhuqing said.