Financial Services Association, April 29 (Reporter Zhu Wanping) Last year's performance growth rate of “Huijiu Laosan” Kouzijiao (603589.SH) met the requirements for lifting the first phase of the company's equity incentive ban — revenue increased 15% year-on-year in 2023, but the company's management expenses surged by more than 50% last year, dragging down the company's net profit growth performance. Furthermore, the company's nationalization is not progressing smoothly, and the growth rate of the market outside the province is only in single digits.

This evening, Kouzijiao released its 2023 financial report and this year's quarterly report. Last year, the company achieved total revenue of 5.962 billion yuan, an increase of 16.1% over the previous year, and net profit to mother of 1,721 billion yuan, an increase of 11.04% over the previous year. In Q1 of this year, the company achieved revenue of 1,768 billion yuan, an increase of 11.05% over the previous year; net profit to mother was 589 million yuan, an increase of 10.02% over the previous year.

In the equity incentive plan announced by Kouzijiao in March last year, the requirements for lifting the ban in the first phase were: revenue or net profit returned to mother in 2023 increased 15% year-on-year, and the company's 16.1% revenue growth rate was basically just achieved.

However, the company's net profit last year fell slightly short of analysts' expectations. According to Wind data, since October last year, 4 brokerage firms have predicted the company's 2023 performance, with the lowest forecast value of 1,784 billion yuan.

It is worth mentioning that Kouzijiao's net profit growth rate last year was only 11.04%, lower than the revenue growth rate for the same period, and this is related to the sharp increase in the company's management expenses last year. Last year, Kouzijiao's management expenses reached 407 million yuan, an increase of 51.95% over the previous year. Meanwhile, in Anhui Province, Yingjiagong Liquor (603198.SH), which is larger than Kouzichiao, had a management cost of only 209 million yuan last year.

By product, last year, Kouzijiao's high-end products achieved revenue of 5.678 billion yuan, a year-on-year increase of 16.58%; mid-range products achieved revenue of 76 million yuan, a year-on-year decrease of 19.76%; and low-grade products achieved revenue of 95 million yuan, which is basically the same as the previous year.

Looking at volume and price breakdown, last year, Kouzijiao's high-end products achieved sales volume of 31,000 kiloliters, an increase of 13.40 percent over the previous year. The tonnage price was 183,300 yuan/liter, a slight increase of 2.81% over the previous year. The sales volume of mid-range products fell by about 25%, but the tonnage price increased by about 7.6%; the sales volume of low-grade products also fell by about 9%, and the tonnage price increased by 10.74%.

By region, last year, Kouzijiao achieved revenue of 4.9 billion yuan and 947 million yuan in (Anhui) province, respectively, up 17.54% and 6.56% year on year. The growth rate of Kouzijiao's overseas market was significantly slower than that of the provincial market, causing the share of the market outside the province to shrink by nearly 8 percentage points. Meanwhile, Kouzijiao's dependence on the provincial market further increased to 83.81%.

Currently, over 80% of revenue depends on Kouzijiao, a market in Anhui Province, and is facing fierce competition with “Huijiu Yigou” Gujing Gongjiu (000596.SZ) and “Huijiu Ergou” in the province. The revenue growth rate of the latter two is much higher than that of Kouzijiao. Since the revenue scale of Yingjiagong Liquor surpassed Kouzijiao in 2022, Kouzijiao has been lagging behind the two major competitors in the province.