The Zhitong Finance App learned that Zheshang Securities released a research report saying that 24Q3 wine companies actively control speed and strive to resolve supply and demand conflicts and inventory pressure during development. The revenues/profits of Kweichow Moutai, Gujing Gongjiu, Shanxi Fenjiu, Shuijingfang, and Laobai Dry Liquor are in line with expectations. The 24Q3 liquor industry's revenue increased 1.27% year on year to 96.382 billion yuan, and net profit to mother increased 2.21% year over year to 35.986 billion yuan; after excluding Kweichow Moutai, the 24Q3 liquor industry's revenue fell 6.80% year on year, and net profit to mother decreased 7.96% year on year. Against the backdrop of performance differentiation already reflected in the three-quarter report, follow-up emphasis was placed on investment opportunities with leading brands with strong brand potential, inventory cleared earlier, and reasonable growth targets. The Spring Festival in '25 may usher in a verification period.

The main views of Zheshang Securities are as follows:

Revenue and profit side: Diversification intensified, and overall third-quarter results showed a deceleration trend

Looking at the growth rate, there were still 10 wine companies with revenue growth and 11 wine companies' profit growth in 24Q3. Among them, the revenue of high-end wine, sub-high-end wine, and regional leading wine changed by +9.6%, -0.4%, and -17.0%, respectively, and profits changed +9.2%, -2.0%, and -32.3%, respectively. 24Q3 high-end wine showed strong resilience, and sub-high-end and regional leading wines all showed significant differentiation. Due to the performance of the 24Q1 liquor sector exceeding expectations, 24Q1-3 high-end, sub-high-end, and regional leading wines still achieved revenue and profit growth, and the profits of 12 wine companies increased in 24Q1-3.

Compared with expectations, the 24Q3 revenue/profit of Kweichow Moutai, Gujing Gongjiu, Shanxi Fenjiu, Shuijingfang, and Laobaijiu were in line with expectations, and the performance of some wine companies fell short of expectations. Due to weak sales in the Mid-Autumn Festival National Day industry, wine companies actively controlled the pace steadily and far-reaching in 24Q3.

Profit side: Net interest rates are generally under pressure. In 24Q3, only 6 wine companies increased their gross margins and 8 wine companies' net interest rates increased. In addition, 13 wine companies' management expenses increased, and 11 wine companies' sales expenses increased.

Report quality side: Q3 advance payments & cash flow are under pressure, and a few wine companies such as Wuliangye and Fenjiu performed well

Advance payments: In 24Q1-3, only five wine companies, Wuliangye, Elite, Jinhui Liquor, Shanxi Fenjiu, and Golden Seed Liquor, saw a positive year-on-year increase in advance receipts. In 24Q1-3, advance receipts for high-end wine were +6.1% YoY, and advance receipts for regional wines were -24.7% YoY.

Cash flow: In 24Q3, only the five wine companies, Jinhui Liquor, Shanxi Fenjiu, Wuliangye, Gujing Gongjiu, and Luzhou Laojiao, had positive year-on-year cash flow growth. In 24Q3, cash flow of high-end wine was -16.6%, and cash flow of regional liquor was -35.4% year-on-year.

Dividend side: Wuliangye announced a three-year dividend plan, and wine companies pay attention to shareholder returns

This time, Wuliangye announced its 2024-2026 shareholder return plan, promising that the company's total annual cash dividends for 2024-2026 will account for no less than 70% of the net profit returned to mother for the year, and not less than 20 billion yuan (tax included). Previously, Maotai and Yanghe promised a three-year dividend plan for 24-26 in the mid-reporting season. Maotai promised a 24-26 dividend rate of not less than 75%, and Yanghe promised a 24-26 dividend rate of not less than 70% and a dividend amount of not less than 7 billion, highlighting the importance that wine companies attach to shareholder returns and boosting market confidence.

Four points of concern: There is a big difference in the quality of Q3 reports, and leading wine companies are still resilient

The growth rate is slowing down: Liquor companies represented by Wuliangye (000858.SZ), Fenjiu (600809.SH), Gujing (000596.SZ), Jinshiyuan (603369.SH), Yingjia (603198.SH), Shuijingfang (), and Laobaigan (US) actively control the pace to anchor healthy growth goals. 600779.SH 600559.SH Advance payment: Channel repayment intentions and revenue differentiation. Shanxi Fenjiu, Kweichow Moutai (600519.SH), Gujing Gongjiu, and Jinhui Liquor (603919.SH) are relatively leading in repayment and collection capabilities. It is expected that they will maintain steady growth in subsequent Q4. Number of dealers: The number of dealers in Jinshiyuan, Laobaiqian, Jinhui Liquor, and Kouzichao (603589.SH) is still increasing month-on-month, and there is support on the channel side. Product structure: The growth rate of structural upgrades has slowed down, and the price band of 100-400 yuan has the best performance.