Description of the event

The company's 2024H1 gross revenue was 83.451 billion yuan (YoY +17.56%); net profit to mother was 41.696 billion yuan (YoY +15.88%), after deducting non-net profit of 41.67 billion yuan (+15.92% YoY). Total operating income of 2024Q2 was 36.966 billion yuan (YoY +16.95%); net profit attributable to mother was 17.63 billion yuan (YoY +16.1%), after deducting non-net profit of 17.619 billion yuan (YoY +16.15%).

Incident comments

By channel, the acceleration of wholesale channels has mainly benefited from price increases. 2024H1 direct sales were 33.728 billion yuan (+7.35% year over year), and the direct sales channel growth rate slowed; the 2024H1 “i Maotai” digital marketing platform achieved tax revenue of 10.25 billion yuan (+9.76% year over year) for alcohol, and 2024Q2 was 4.907 billion yuan (+10.64% year over year). 2024Q2 2024H1 wholesale was 47.986 billion yuan (+26.5% YoY) and 2024Q2 (+27.4% YoY); the growth rate of the wholesale channel has increased, which is expected to be mainly due to the company's contribution to Flying Sky's price increase last year.

By product, 2024H1 Maotai liquor reached 68.567 billion yuan (YoY +15.67%), 2024Q2 (YoY +12.92%); 2024H1 series wine 13.147 billion yuan (YoY +30.51%), 2024Q2 (+42.52% YoY); series wine achieved relatively rapid growth.

The company's sales are good, cash flow matches revenue, and profitability fluctuates slightly. The company's total H1 operating income +△ contract liabilities in 2024 was 79.318 billion yuan (+26.2% year over year), and cash flow received from sales of goods and provision of labor services was 87.094 billion yuan (+26.09% year over year). The company's 2024H1 net profit margin fell 0.72 pct year on year to 49.96%, and gross margin fell 0.05 pct year on year to 91.91% year on year. The net profit margin of 2024Q2 fell 0.35 pct year on year to 47.69%, and gross margin fell 0.14 pct year on year to 90.88% year on year. Among the detailed changes were: sales expenses ratio (+0.74 pct year over year), management expenses ratio (-0.95 pct year over year), sales tax and surcharges (+0.77 pct year over year).

Production fluctuated slightly due to seasonal effects, and dividends were positive. 2024H1 Maotai liquor production was 0.0391 million tons (-12.33% YoY), and serial wine-based wine production was 0.0227 million tons (-5.42% YoY). Production fluctuations are expected to be mainly affected by the company's production pace. The company issued an announcement on the cash dividend return plan. In 2024-2026, the total amount of cash dividends distributed by the company each year will not be less than 75% of the net profit attributable to shareholders of listed companies in that year, and the annual cash dividends will be implemented twice (annual and mid-term dividends).

Maotai's reforms continued to advance, maintaining steady growth. The company's price fluctuated in the first half of the year, but under the company's series of measures such as controlling some products, the price has recently rebounded steadily, indicating that the company still has strong control over prices. Looking ahead to the second half of the year, the company's price increase will continue to contribute to the reporting side. It is expected that the reporting side will successfully achieve the stated goals, while the company is expected to control the batch price and remain relatively stable. EPS is expected to be 68.92/79.7 yuan in 2024/2025, corresponding to the latest PE 21/18 times, maintaining the “buy” rating.

Risk warning

1. Industry demand falls short of expectations;

2. Increased market price fluctuations, etc.