Chinanews Client Beijing, February 8th (Reporter Xie Yiguan) In 2020, the liquor index soared by 119.76%, and investors chanted that "Liquor is the eternal god of dripping."

Recently, with the announcement of the 2020 annual performance forecasts of liquor companies, the performance of many liquor companies is also very "sweet".

Data map: A tobacco and alcohol supermarket in Haidian District, Beijing.

Photo by China News Service reporter Xie Yiguan

Liquor, "bow stocks come out in large numbers"

  Recently, Zhang Kun, the fund manager of E Fund, has been on fire. Because of the heavy storage of liquor stocks in the E Fund blue-chip selected hybrid fund under his management, the "three world-renowned wineries: Romani Conti, Lafite, and E Fund" have also become popular.

  The data shows that thanks to the "drinking" market from 2020 to the present, as of February 5, 2021, E Fund's Blue Chip Selected Mixed Fund has increased by 133.12% in the past year, ranking 16th in the same ranking.

  In 2020, the liquor sector has been advancing all the way since the second quarter.

In terms of individual stocks, Jiugui Liquor’s annual growth rate is 336.54%, Shanxi Fenjiu's annual growth rate is 318.38%, ST's annual growth rate is 184.71%, Laobaigan's annual growth rate is 180.07%, Luzhou Laojiao's annual growth rate is 160.91%, Wuliangye's annual growth rate is 119.42%, and Yanghe shares. The annual increase was 113.57%.

Even the largest Kweichow Moutai, the annual growth rate reached 68.89%.

  Since the beginning of 2021, most liquor stocks have continued to rise, and Kweichow Moutai's share price has repeatedly hit new highs.

As of the close on February 5, Kweichow Moutai's share price has remained above 2,300 yuan, with a market value of 2.9 trillion yuan. It has ditched several streets of Wuliangye, the second oldest in the liquor industry, and is roughly equivalent to "two Wuliangye + one Luzhou Laojiao."

Kweichow Moutai stock price chart.

  Why do liquor stocks "brown out in large numbers"?

In the eyes of market investors, under the background of increased economic uncertainty caused by the epidemic, institutions generally choose industry sectors with high certainty of performance and good prospects, and the liquor sector is one of them.

Performance, one after another "announcement"

  On the evening of December 31, 2020, Kweichow Moutai was the first to release a performance forecast, unveiling the "veil" of 2020 annual performance.

Kweichow Moutai is expected to achieve revenue of about 97.7 billion yuan in 2020, a year-on-year increase of about 10%; it is expected to achieve a net profit attributable to shareholders of listed companies of about 45.5 billion yuan, a year-on-year increase of about 10%.

  "From a product perspective, Moutai is expected to increase revenue by more than 10%, mainly because the company has increased the proportion of direct sales channels and the product structure is gradually optimized." Chuancai Securities analyst Ouyang Yujian said.

  Immediately afterwards, Wuliangye announced its 2020 annual performance forecast: benefiting from the growth of core product sales, it is estimated that revenue will be about 57.2 billion yuan, an increase of about 14% over the same period last year; net profit attributable to shareholders of listed companies is expected to be about 19.9 billion yuan. An increase of about 14% over the same period last year.

  Compared with Kweichow Moutai and Wuliangye, the performance of Luzhou Laojiao, which ranks third in the wine industry by market value, is significantly better than market expectations. In 2020, it is expected to achieve a net profit attributable to shareholders of listed companies of 5.570 billion yuan to 6.035 billion yuan, a year-on-year increase of about 20. %-30%.

  "Guojiao 1573, a subsidiary of Luzhou Laojiao, performed well in the second half of 2020. With the recovery of demand for famous wines, its proportion has further increased." China Everbright Securities Food and Beverage Industry Analyst Ye Qianyu pointed out.

Data map: Part of liquor sold in a supermarket in Fengtai District, Beijing.

Photo by Xie Yiguan, China News Network reporter

  In addition to "Mao Wulu", sub-high-end liquor companies are also expected to increase their performance.

  Shanxi Fenjiu expects that the net profit attributable to shareholders of listed companies will increase by 866 million yuan to 1.156 billion yuan in 2020, a year-on-year increase of 41.56%-55.47%; Jiuguijiu is expected to increase net profit attributable to shareholders of listed companies by 455 million yuan to 495 million yuan in 2020 Yuan, an increase of 51.92%-65.28% year-on-year.

Both are much higher than the growth rate of net profit of the previous year.

Huangtai Liquor, Shuijingfang, and Highland Barley Liquor are "left behind"

  The performance of most baijiu companies is "popular", and there are also companies whose performance has declined.

Among the wine companies that have announced their performance forecasts, Huangtai Winery and Shuijingfang have slightly reduced their performance, and highland barley wine has suffered its first loss.

Netizens complained, "Kick them out of the baijiu group chat."

  Specifically, Shuijingfang predicts that the net profit attributable to shareholders of listed companies in 2020 will decrease by about 94.96 million yuan, a decrease of about 11%; Huangtai Wine Industry expects a net profit of 22 million to 32 million yuan in 2020, a year-on-year decrease of 53.09 %-67.75%; The highland barley wine is expected to lose 110 million to 130 million yuan.

  Regarding the decline in performance, the three wine companies all mentioned that when the domestic new crown pneumonia epidemic is severe in 2020, the sales of their products will be greatly affected.

  Judging from the 2020 performance forecasts disclosed by liquor companies, high-end liquors are also significantly better than mid- and low-end liquors in terms of performance.

“The consumption scenes of high-end wine are concentrated in banquets, social gifts and investment collections. The current COVID-19 prevention and control policies are the least affected. In the medium and long term, repeated epidemics will accelerate the concentration of industry resources to famous wine companies.” Wanlian Securities report shows.

  In the liquor industry, there has always been a saying that "the high-end one wins the world".

Because of the confusion in the product line, Wuliangye, the "big brother" of the year, gave Kweichow Moutai, which insisted on its high-end positioning, the opportunity to overtake a corner.

Data map: Memorial wine of Moutai Distillery.

Photo by China News Agency reporter He Junyi

  In recent years, with the help of the price space left by the terminal price increases of Moutai and Wuliangye, Shanxi Fenjiu, Jiuguijiu, Jinshiyuan and other wine companies have increased prices or launched high-end products with a price of 1,000 yuan to compete for high-end market share.

Some regional small and medium-sized wine companies have also adjusted their product structure to rank second in the high-end price band.

  However, food industry analyst Zhu Danpeng once said bluntly that if the brand's height, quality, and craftsmanship are not as high as the overall strength is not in place, "whoever rises fast will die quickly." In the view of Zheshang Securities analyst Ma Li, In the long run, the consumption upgrade trend of the liquor industry will remain unchanged, and the market share will continue to gather in leading liquor companies.

"The stronger the stronger, the weaker the weaker"

  Looking forward to 2021, how will liquor stocks perform?

“Under the background of continued price hikes, increasing expectations for a good start, better stocking of famous wines during the Spring Festival, and increased capital is expected to continue to enter the background, the annual performance of the liquor sector has recovered quarter by quarter, and channel confidence has gradually increased. Under the background of low base numbers, the next four The performance of wine companies in the quarter will achieve higher growth.” Ma Li pointed out.

  Recently, a report released by iiMedia Consulting predicts that in 2021, the scale of the new wine retail market will reach 136.31 billion yuan, and the scale of new wine retail users will reach 540 million (approximately 460 million in 2020).

  As the scale of the liquor market continues to expand, the situation in the liquor industry that "the strong will become stronger and the weak will become weaker" will become more apparent.

Data map: Liquor area in a supermarket in Beijing.

Photo by Xie Yiguan

  According to data from the China Liquor Industry Association, from January to November 2020, the output of liquor enterprises above designated size nationwide was 6,183,600 kiloliters, a year-on-year decrease of 10.26%; there were 1,040 enterprises above designated size, a decrease of more than 550 from 2017, including 170 losses. For enterprises, losses reached 16.35%, with a cumulative loss of 1.381 billion yuan, an increase of 64%.

  "At present, the industrial profits of the wine industry are concentrated in the top 50 companies. In about 4% of the companies, brand concentration and industrial profit concentration have increased significantly." Song Shuyu, chairman of the China Liquor Industry Association, recently revealed.

  "With the further differentiation of China's liquor industry, a dumbbell-shaped industrial structure will be formed. With the acceleration of industry innovation and upgrading, small and medium-sized regional brands will face great pressure to survive." Zhu Danpeng said.

  Liquor is very "sweet", but now that the stock price has risen so much and the industry has become more fragmented, do you still dare to buy liquor stocks?

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