This year is a year of differentiation, transformation, transition, and reshaping in the liquor industry.
At the 2024 China Resources liquor industry partner conference held today, He Yong, Secretary-General of China Alcoholic Drinks Industry Association, said that from January to May this year, the national liquor industry's sales revenue was 284.45 billion yuan, a year-on-year increase of 11.8%; the total profit was 80.61 billion yuan, a year-on-year increase of 9.5%.
This year, the performance of the baijiu industry is expected to weaken, and consumers are more rational and less willing to spend money. It is a year of differentiation, transformation, transition, and reshaping in the liquor industry.
Huafu Securities released a research report stating that since the beginning of 2024, the rotation repair between regional leading and high-end liquor sector price bands is in progress. The baijiu sector is relatively undervalued with enhanced certainty of high reported performance. At the same time, compared with the SW Consumer Other Secondary Track, the current valuation percentile of the baijiu sector is at a lower level with a high safety cushion.
Dongxing Securities believes that if the consumption tax reform is implemented, it will reshape the interest pattern between liquor companies and distributors in the short term, and test the market control and channel operation capabilities of liquor companies. In the long run, the advantages of famous wines will be further highlighted, and the consumption tax reform will bring further increase in industry concentration. Continuing its previous views, Dongxing Securities is bullish on the ability of famous wine companies to further increase market share and recommends paying attention to the baijiu industry under macroeconomic recovery.
Baijiu related companies:
Zhenjiu Lidu (06979): Against the backdrop of industry adjustments, Zhenjiu Lidu achieved revenue of 7.03 billion yuan in 2023, a year-on-year increase of 20.10%; adjusted net profit of 1.623 billion yuan, a year-on-year increase of 35.50%; net margin and gross margin both increased, and cash flow improved significantly. At the same time, Zhenjiu Lidu's four major brands all achieved double-digit growth year-on-year, with remarkable results in high-endization, and related product revenue increased by 33.2%, reflecting a relatively high quality of performance growth.