Jiangsu Yanghe Brewery Joint-Stock's dividend rate has increased to 70% this year, the highest in the industry. Chairman Zhang Liandong said that in the future, the company will actively consider increasing dividends without affecting healthy development. Zhang Liandong also stated that the company has slowed down its pace this year, but still has targets and ambitions. He also mentioned that if the market within Jiangsu province cannot be handled well, they will reflect internally and focus on their main market in Jiangsu this year.
On June 7th, Caixin reported that Yanghe Brewery (002304.SZ), known as "the leader of Jiangsu liquor", held its shareholders' meeting for 2023, with more than 200 shareholders attending on site. Due to the registration of attendees exceeding the capacity of the original venue for the meeting, the company relocated the venue to the Hengli International Hotel in Suqian three days ago. During the meeting, the company's development strategy, performance slowdown, dividends and repurchases, and competition with Jiangsu King's Luck Brewery (603369.SH) were the concerns of shareholders, and the company management responded one by one. The Board Chairman of the company, Zhang Liandong, stated that the dividend payout ratio of the company has been raised to 70% this year, with a dividend yield exceeding 5%, both of which are the highest in the industry. In the future, under the premise of not affecting the sustainable and healthy development of the enterprise, the company will consider an active increase in the dividend payout ratio. This year marks Yanghe Brewery's 15th anniversary of listing, and some shareholders have suggested that they should receive a special dividend on the occasion. Zhang said he will "fully consider" this proposal. In the 2023 annual report, Yanghe Brewery proposed a target of "striving for a 5%-10% YoY increase in revenue in 2024", which is slower than in previous years. In response, Zhang Liandong stated that this was mainly due to the deep adjustment stage of the baijiu industry currently, and is a proactive adjustment of Yanghe's rhythm. However, he also emphasized that the company also has goals and ambitions and it is an obligation of the company to create the greatest value for shareholders. Competition with the "second largest Jiangsu liquor brand" Jiangsu King's Luck Brewery is also a focus of investors' attention. In the past few years, Jiangsu King's Luck has achieved great success in the Jiangsu market. From 2020 to 2023, Jiangsu King's Luck's revenue in the province has increased from 4.768 billion yuan to 9.371 billion yuan, with a compound annual growth rate of about 25%, becoming the main driver of the overall revenue growth of the company. During the same period, Yanghe Brewery's revenue in Jiangsu Province increased from 9.56 billion yuan to 14.393 billion yuan, with a compound annual growth rate of about 14.6%, which is lower than Jiangsu King's Luck's speed of development in the province. In 2020, Yanghe Brewery's growth rate in Jiangsu Province was only 8.05%, lower than the company's overall revenue growth rate. At today's shareholders' meeting, a shareholder asked: "Why have many people in Jiangsu changed from drinking Yanghe to drinking Jiangsu King's Luck in recent years?" In response to this, Zhang Liandong said candidly, "Many people have told me that Yanghe must do well in the Jiangsu provincial market because everyone thinks Yanghe's brand and endowment are very good. If we can't do well in the Jiangsu provincial market, we must reflect internally. At present, the company is doing some research and adjustments internally." Regarding this year's market strategy, Yanghe Brewery executives stated that this year the company will focus on the market in Jiangsu Province and the Yangtze River Delta, further returning to the home market, and solving the problem of profit transparency from the organizational system, dealer system, and terminal. In addition, on the basis of deepening the market in Jiangsu Province, the company will continue to deepen the national market. It is worth noting that in early April this year, the ex-factory price of the company's core product Moutai-style liquors M6+ also increased by 20 yuan/bottle. However, overall, after the price increase of Moutai-style liquors M6+, its wholesale reference price is still relatively weak. According to internal tracking data of Huaxin Securities, as of today, the wholesale reference price of Moutai-style liquors M6+ (52 degrees, 550 ml) is 575 yuan/bottle, while its wholesale reference price in early April was 590 yuan/bottle, which did not increase but decreased. Currently, Moutai-style liquors M6+ is sold on Pinduoduo for as low as about 540 yuan/bottle.
During the meeting, the company's development strategy, performance slowdown, dividends and repurchases, and competition with Jiangsu King's Luck Brewery (603369.SH) were the concerns of shareholders, and the company management responded one by one.
Caption: Yanghe Brewery booth, Caixin reporter Zhu Wanping.
Regarding the dividend issue, the chairman of the company, Zhang Liandong, stated that the dividend payout ratio of the company has been raised to 70% this year, with a dividend yield exceeding 5%, both of which are the highest in the industry. In the future, under the premise of not affecting the sustainable and healthy development of the enterprise, the company will consider actively increasing the dividend payout ratio. This year marks Yanghe Brewery's 15th anniversary of listing, and some shareholders have suggested that they should receive a special dividend on the occasion. Zhang said he will "fully consider" this proposal.
In the 2023 annual report, Yanghe Brewery proposed a target of "striving for a 5%-10% YoY increase in revenue in 2024", which is slower than in previous years. In response, Zhang Liandong stated that this was mainly due to the deep adjustment stage of the baijiu industry currently, and is a proactive adjustment of Yanghe's rhythm. However, he also emphasized that the company also has goals and ambitions and it is an obligation of the company to create the greatest value for shareholders.
Competition with the "second largest Jiangsu liquor brand" Jiangsu King's Luck Brewery is also a focus of investors' attention. In the past few years, Jiangsu King's Luck has achieved great success in the Jiangsu market. From 2020 to 2023, Jiangsu King's Luck's revenue in the province has increased from 4.768 billion yuan to 9.371 billion yuan, with a compound annual growth rate of about 25%, becoming the main driver of the overall revenue growth of the company.
During the same period, Yanghe Brewery's revenue in Jiangsu Province increased from 9.56 billion yuan to 14.393 billion yuan, with a compound annual growth rate of about 14.6%, which is lower than Jiangsu King's Luck's speed of development in the province. In 2020, Yanghe Brewery's growth rate in Jiangsu Province was only 8.05%, lower than the company's overall revenue growth rate.
At today's shareholders' meeting, a shareholder asked: "Why have many people in Jiangsu changed from drinking Yanghe to drinking Jiangsu King's Luck in recent years?"
In response to this, Zhang Liandong said candidly, "Many people have told me that Yanghe must do well in the Jiangsu provincial market because everyone thinks Yanghe's brand and endowment are very good. If we can't do well in the Jiangsu provincial market, we must reflect internally. At present, the company is doing some research and adjustments internally."
Regarding this year's market strategy, Yanghe Brewery executives stated that this year the company will focus on the market in Jiangsu Province and the Yangtze River Delta, further returning to the home market, and solving the problem of profit transparency from the organizational system, dealer system, and terminal. In addition, on the basis of deepening the market in Jiangsu Province, the company will continue to deepen the national market.
It is worth noting that in early April this year, the ex-factory price of the company's core product Moutai-style liquors M6+ also increased by 20 yuan/bottle. However, overall, after the price increase of Moutai-style liquors M6+, its wholesale reference price is still relatively weak. According to internal tracking data of Huaxin Securities, as of today, the wholesale reference price of Moutai-style liquors M6+ (52 degrees, 550 ml) is 575 yuan/bottle, while its wholesale reference price in early April was 590 yuan/bottle, which did not increase but decreased. Currently, Moutai-style liquors M6+ is sold on Pinduoduo for as low as about 540 yuan/bottle.