After a thousand calls, he came out, still holding the pipa half covering his face.
This poem can describe the mood of many alcoholics tonight.
Outside the window is the bright moonlight, and in front of the window is the persistence of countless alcoholics.
Now I will interpret the mid-year report of Jiuguijiu for everyone.
Event: The company announced the 2022 semi-annual report. In 2022H1, the revenue was 2.537 billion yuan, a year-on-year increase of 48.04%. The non-net profit attributable to the parent was 716 million yuan, a year-on-year increase of 40.90%. Cash flow of 411 million yuan, -55.73% year-on-year
First, look at the management discussion and analysis.
“Hold high the banner of cultural wine, and promote the steady and long-term development of cultural drunkards”
“Internal reference, drunkard” two-wheel drive development model”
The market strategy of “strengthening the base market, breaking through the highland market, and deepening the nationalization””
“In the first half of 2022, the total number of customers will reach 1,479, an increase of 17.75% compared with the end of 2021. The scale and quality of customers will be improved.”
“Jiuguijiu has 25,000 core terminal outlets nationwide, with a national market coverage rate of 72% in prefecture-level cities and a 99% coverage rate in Hunan county-level markets”
“The company has taken corresponding measures to strengthen price and market management, transform the direction of cost input, from the attitude of payment collection to the mentality of dynamic sales, strengthen the implementation of dynamic sales, and reduce the impact of the epidemic.”
To sum up: the core label of Jiugui Liquor is the two-wheel drive of cultural liquor and Jiugui Liquor. It is firmly promoting nationalization and progressing smoothly. Except for the Hunan market, there is still much room for improvement in the county-level coverage of other regional markets. At present, the company is focusing on Pay back to pay attention to dynamic sales.
Let’s take a look at the dealers of Jiuguijiu:
From the changes of dealers, it can be seen that the main growth markets for Jiuguijiu are North China and East China. In addition, there is still a lot of room for improvement in the number of dealers in the South China market, and the penetration rate is low. saturation.
According to the situation of the epidemic this year, North China and East China (with the fastest growth of distributors) are both areas that have been severely affected by the epidemic. Obviously, these growth markets have not had time to exert their strength in the first half of the year, and we can expect flexibility in the future.
The other parts should include the southwest, northwest, and northeast markets. This part, together with the South China market, will also have a very broad space in the future, but if the pace is too fast, it is easy to get involved. Everything can be done as planned.
After all, far away knows Ji.
2. In 22H1, revenue increased by 48%, while profit only increased by 41%. In Q2, revenue increased by 5% and profit decreased by 19%, mainly due to the rapid growth of sales expenses, and secondly due to changes in product sales structure, resulting in the overall gross profit margin down 1%.
Sales expenses were +60% year-on-year, an increase of more than 200 million.
Promotional expenses increased by 170 million, +100% year-on-year, and advertising expenses increased by about 44 million, +34% year-on-year.
Employee compensation rose only 5%.
In fact, in the management analysis, it was also said that the company’s strategy has shifted from payment collection to dynamic sales. Combined with the impact of this year’s epidemic, dynamic sales were indeed affected. Jiuguijiu also gave back to the channel and held many promotional activities, which led to an increase in channel promotional expenses in the first half of the year.
In fact, this part of the profit from promotion expenses is relatively elastic. With the increase of brand power, after the market is occupied, due to the addictive nature of liquor, once the consumption habit is formed, there will be inertia in the short and medium term, and it will be converted into profit in the future.
In the liquor industry, driven by brand power, to a certain extent, profit-making channels are beneficial to obtain higher elastic profits in the future.
Compensation expenses are rigid and haven’t grown much.
In addition, let’s take a look at the changes in the sales structure of alcoholic liquor.
Internal reference +24%, Jiugui +50%, Xiangquan +70%, other series +118%
The proportion of internal reference has decreased, while the gross profit margin of internal reference is the highest (92.4%), as shown in the figure below
The change in sales structure has caused the overall gross profit margin to drop by 1 point. In fact, the overall impact is still within a reasonable range.
Combined with the strategy of Jiuguijiu, as shown below
It is a medium-to-long-term growth strategy to do a good job of large waist products, because the production capacity of high-end wines is generally limited. This strategy was also mentioned in the 2022 interim report of Luzhou Laojiao. Eyes, rely on the volume of the waist products.
In addition, due to the rapid development of Jiugui Liquor in recent years, the price system and dynamic sales of the internal reference wine still need to be improved. Some dealers have the behavior of selling the internal reference wine at a low price, which is damage to the brand, so the Jiugui Liquor has suspended the internal reference wine. delivery, and stopped investment promotion in some areas , as shown below
Stop accepting orders for 52-degree 500ML internal reference wine (master), and the contracted customers will not be assessed for this year.
The above means that Jiuguijiu has begun to attach importance to market management, protect the interests of cooperative distributors, and promote the effective measures to promote the increase of brand volume and price. It can maintain the stability and increase of product prices through the relationship between market supply and demand, which is conducive to the healthy growth of the market.
The slowdown in the growth of Nei Shen Liquor was deliberately done by Jiugui Liquor.
Stepping on the brakes is to store power and to step on the accelerator to run further.
When running an endurance race, it is often not the rabbit that wins, but the tortoise.
This is why compound interest is called the eighth wonder of the world.
This nationalized sub-high-end liquor battle is a protracted battle, and the ultimate winner will be the next liquor king.
Sub-high-end wine is a sub-industry that I think has alpha (α) income in the liquor industry, and the dividend period is still very long. (Need to comprehensively consider the impact of the epidemic policy)
3. Receipts from sales +1.939 billion yuan, flat year-on-year, and net operating cash flow of 411 million yuan, -55.73% year-on-year.
Contract liabilities decreased year-on-year and quarter-on-quarter.
Figure 1 is this year’s contract liabilities, and Figure 2 is from last year. This year’s interim report is only 556 million, which is 120 million less than last month and 320 million less than the same period last year.
On the one hand, it shows that last year’s rush was very strong, especially in terms of payment, and on the other hand, it shows that there is indeed a lot of growth pressure this year.
Receipts in the first half of this year were the same as last year, but the expenditure increased, which was reflected in taxes and purchases of materials, resulting in a larger decline in overall operating cash flow.
In addition, the sales policy has not become more aggressive, the accounts receivable has not increased, and the bills receivable has dropped significantly compared with last year. If you want to see whether the liquor really collapsed, you should look at the accounts receivable and bills. When a certain liquor relies on this subject to increase its profits, it is basically more dangerous.
Many companies in other industries don’t actually make money (I won’t name them), most of them are profitable, but they are accounts receivable. Many accounts receivable can’t actually be collected and will continue to accumulate, like a small Ponzi scheme. , bringing false prosperity.
Liquor really makes real money, and the profit with cash flow is real money.
What really determines whether a business can be sustainable is always cash flow, not profit.
Fourth, look to the future.
Many people will feel that Jiuguijiu’s Q2 performance is thunderous, with a slight increase in Q2 revenue and a 19% drop in profit.
Let’s think about it from another angle. When the profit of alcoholic liquor in Q1 increased by 95% year-on-year, did it increase?
No, even all the way down, why?
Because everyone expected that under the influence of the epidemic, Jiuguijiu’s Q2 performance was very poor, so it fell all the way.
So, these are already reflected in the stock price, and even I think there are some overreactions.
Although Luzhou Laojiao and Yanghe shares performed well, they were within expectations, so they rose slightly and fell sharply the next day.
If we don’t look at Q1, but directly look at the performance of Jiuguijiu 22H1, is it more fair?
What is the expected growth rate for alcoholic liquor of 150?
Let’s compare it with PEG valuation,
What is PEG?
The PEG valuation method metric is a company’s price-earnings ratio divided by the company’s profit growth rate.
If the PEG is less than 1, and the same growth rate is maintained for three years, the PE of all stocks will be less than 15 times, even if it is now 150 times.
Due to the low profit base in the third and fourth quarters, there is a high probability that Jiuguijiu will achieve a 50%+ profit growth this year. Assuming that the epidemic policy changes in the next three years, the highest compound growth rate for Jiuguijiu will be 60%. If not, the minimum compound growth rate will be 35%. % (Based on the background of COFCO, there are still many cities and county-level markets that are blank, and this growth rate can be maintained only by distributing goods).
In 2022, PE34, PEG is 0.57-0.97, which is obviously underestimated.
Let’s compare the same industry, Luzhou Laojiao, to give the highest compound growth rate of 30% and the lowest compound growth rate of 15% in the next three years.
In 2022, PE32 and PEG are at 1.07-2.1, which is reasonably high.
Yanghe shares will give a compound growth rate of up to 25% and a minimum of 10% in the future.
In 2022, PE26.6, PEG is 1.06-2.66, reasonably high.
In the CATL era, we used the seller’s profit of 2.72 million as the profit in 2022, giving a three-year compound growth rate of 35%.
In 2022, PE is 44, PEG=44/35=1.26, which is reasonably high.
For alcoholic wine, I would say,
Looking at a company with a magnifying glass in the growth period is too harsh.
If the big money has enough vision and foresight, then please cherish the current alcoholic bar,
If no one appreciates it, so be it.
Life is like a hazy dream, raise your wine glass to offer sacrifices to this eternal bright moon!
$ Jiugui Wine (SZ000799)$ $ Shede Wine (SH600702)$ $ Shanxi Fenjiu (SH600809)$
Written at 4:00 in the morning, I am a little tired, please like it, your support is the driving force for my creation.
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