Incident: The company released its 2024 semi-annual report. 2024H1 achieved operating income of 81.931 billion yuan, an increase of 17.76% year on year; realized net profit due to mother of 41.696 billion yuan, an increase of 15.88% year on year; realized net profit after deducting non-return to mother of 41.67 billion yuan, an increase of 15.92% year on year. According to calculations, 2024Q2 achieved operating income of 36.155 billion yuan, an increase of 17.31% year on year; realized net profit of 17.63 billion yuan, an increase of 16.10% year on year; realized net profit without deduction of 17.619 billion yuan, an increase of 16.15% year on year.
The Q2 revenue performance slightly exceeded expectations, and the growth rate of the wine series was relatively fast. 24Q2 achieved revenue of 36.16 billion yuan, a year-on-year increase of 17.3%. 1) By product, Maotai liquor/series liquor achieved revenue of 28.86/7.21 billion yuan respectively, an increase of 12.9%/42.5% over the previous year. Maotai wine has maintained steady growth, and the wine series is growing faster. 2) By channel, 24Q2's wholesale agent/direct sales channel achieved revenue of 21.66/14.41 billion yuan, respectively, an increase of 27.40%/5.85% year-on-year. 24Q2 i Maotai achieved tax-free revenue of 4.907 billion yuan for alcohol, an increase of 10.62% over the previous year, accounting for 34.1% of direct sales revenue. Compared with the same period last year, the share of wholesale agency channel revenue has increased. 3) By the end of the second quarter, the number of domestic and foreign dealers was 2097/106, respectively. The total number of dealers remained stable at the end of Q1, and there were no significant changes in the channel structure.
Gross margin and net profit margin declined slightly, and dividend planning improved, sending a positive signal. 24Q2's gross margin and net margin were 90.68% and 50.60%, respectively, down 0.12pct and 0.69pct year-on-year, respectively. This is expected to be related to the rapid growth in the revenue of the wine series and the share of revenue from direct sales channels. The tax rate increased by 0.77 pct year on year, and the sales expenses rate increased by 0.74 pct year on year. It is expected that in connection with the increase in advertising expenses, the management fee rate will decrease by 0.95 pct year on year. The company issued the “2024-2026 Cash Dividend Return Plan” announcement. It plans to raise Kweichow Moutai's 2024-2026 dividend rate to 75%. In principle, dividends will be paid twice a year, which is conducive to stabilizing dividend expectations.
Investment advice: The company's revenue for 24-26 is expected to be 174.56/195.54/216.94 billion yuan, a year-on-year growth rate of 15.9%/12.0%/10.9%, net profit to mother of 87.58/98.73/109.66 billion yuan, and a year-on-year growth rate of 17.2%/12.7%/11.1%, maintaining a “buy” rating.
Risk warning: macroeconomic recovery falls short of expectations, industry competition intensifies, and new product promotion falls short of expectations