Kouzi Cellar's operating income increased by 5.69% year-on-year in the third quarter

Our reporter Wang Jinchen

The third quarterly report recently released by Kouzi Cellar shows that in the third quarter of 2022, the company achieved operating income of 1.
465 billion yuan, a year-on-year increase of 5.
69%; The net profit attributable to shareholders of listed companies was 462 million yuan, a year-on-year decrease of 0.
16%.

In the first three quarters of this year, Kouzi Cellar achieved operating income of 3.
762 billion yuan, a year-on-year increase of 3.
67%; The net profit attributable to the parent was 1.
202 billion yuan, a year-on-year increase of 4.
47%.

The growth rate of sales revenue of high-end liquor slowed down

The official website information shows that Anhui Kouzi Wine Industry Co.
, Ltd.
was established in December
2002.
In June 2015, Kouzi Cellar was listed on the Shanghai Stock Exchange, becoming the 17th listed liquor enterprise
in China and the fourth in Anhui.
It has a series of brand products such as Kouzi Cellar, Kouzifang, Laokouzi, etc.
, and has high product popularity
in Anhui, Jiangsu, Henan, Hebei and other regions.

As a local brand that implemented the high-end strategy earlier, Kouzijiao has always occupied a large share
of the high-end market in Anhui Province.

However, since 2022, the slowdown in the performance of Kouzi Cellar is mainly related to
the slowdown in the growth rate of sales revenue of high-end liquor products.

Data show that in the first half of this year, Kouzi Cellar's high-end liquor revenue increased by 1.
82% year-on-year to 2.
163 billion yuan; mid-range liquor revenue increased by 1.
13% to 45.
3084 million yuan; low-grade liquor revenue increased by 4.
41% to 44.
7322 million yuan
.

In other words, the proportion of high-end products in sales revenue has reached 96%, and the company's performance is highly dependent on high-end products
.

However, the reporter combed and found that compared with the same period last year, the revenue growth rate of the above three grades of liquor in Kouzi Cellar has declined
.
Data show that in the first half of 2021, the sales revenue of high, medium and low-grade liquor in Kouzi cellar increased by 42.
57%, 82.
10% and 34.
55%
respectively.
In the first half of this year, these growth rates fell to single digits
.

Especially in the second quarter, the sales revenue of high, medium and low-grade liquor in Kouzi Cellar was negative
.
Data show that in the second quarter, the sales of high-end wine in Kouzi Cellar reached 924 million yuan, a year-on-year decrease of 8.
61%; The sales of mid-range wine were 20.
5786 million yuan, a year-on-year decrease of 13.
28%, and the sales of low-grade wine were 15.
9759 million yuan, a year-on-year decrease of 20.
19%.

Kouzijiao explained in the financial report that it was mainly due to the frequent epidemic in East China, and consumption scenarios such as drinking and banquets were affected
.

Data show that from January to September, Kouzi Cellar's high-end liquor, medium-grade liquor and low-grade liquor achieved sales revenue of 3.
555 billion yuan, 81 million yuan and 67 million yuan respectively, a year-on-year increase of 3.
21%, 1.
49% and 10.
99%.

Compared with the same period last year, the sales revenue growth rate of low-grade liquor recovered to double digits, and high-end liquor and mid-range liquor remained in the single digits
.

Affected by this, since 2022, especially since the second quarter, some operating indicators of Kouzi Cellar have declined
.
Data show that in the second quarter of 2022, Kouzi Cellar achieved a total operating income of 986 million yuan, a year-on-year decline of 7.
87%; The net profit attributable to the parent was 254 million yuan, down 4.
92%
year-on-year.

In the third quarter of 2022, Kouzi Cellar achieved operating income of 1.
465 billion yuan, a year-on-year increase of 5.
69%; The net profit attributable to shareholders of listed companies was 462 million yuan, a year-on-year decrease of 0.
16%.

In the ranks of Huijiu, the performance of Kouzi Cellar has fallen behind slightly
.
Last year, Kouzi Cellar's revenue and net profit attributable to the parent were 5.
029 billion yuan and 1.
727 billion yuan respectively, Yingjiao Gongjiu revenue was 4.
577 billion yuan, and the net profit attributable to the parent was 1.
382 billion yuan
.

In the first three quarters of 2022, Kouzi Cellar achieved operating income of 3.
762 billion yuan, a year-on-year increase of 3.
67%; The net profit attributable to the parent was 1.
202 billion yuan, a year-on-year increase of 4.
47%.

During the same period, the operating income of Yingjiu Tribute Liquor was 3.
892 billion yuan, a year-on-year increase of 21.
42%; The net profit attributable to the parent was 1.
203 billion yuan, a year-on-year increase of 24.
92%.

The revenue and net profit of Yingjiu Tribute Wine have surpassed Kouzi Cellar
.

The proportion of revenue in markets outside the province is still less than 20%.

The market competition in Anhui Province is fierce, and Kouzi Cellar intends to break through by developing businesses outside the province, but the results are not obvious
at present.

From the perspective of the change in the number of dealers, in the first three quarters of this year, the number of dealers outside Anhui Province increased by 70, more than the net increase in the number
of dealers in the province.
By the end of September this year, the number of dealers outside Anhui Province has increased to 367, directly catching up with the number of
dealers in the province.

However, sales revenue in markets outside the province is still difficult to improve
.
As of the end of September 2022, Anhui Province achieved revenue of 2.
982 billion yuan, a year-on-year increase of 3.
96%.

Anhui Province achieved revenue of 722 million yuan, a year-on-year increase of 0.
64%.

In the first half of the year, the sales revenue of the market outside the province of Kouzijiao even declined
for a time.
According to the semi-annual report, the sales revenue of Kouzi Cellar in the province in the first half of this year increased by 4.
44% year-on-year to 1.
82 billion yuan, but the sales revenue outside the province decreased by 7.
79% year-on-year to 430 million yuan
.

Sales are not going up, and Kouzi Cellar is facing a lot of inventory pressure
.
The reporter noted that as of the end of September 2022, the inventory scale of Kouzi Cellar Company was 3.
934 billion yuan, a year-on-year increase of more than 20%, and its proportion in total assets rose to 36.
74%, and the inventory increased significantly
.

In order to increase sales, some wine companies have done large-scale
by increasing marketing investment.
Unlike its peers, Kouzi Cellar focuses on promoting sales
by increasing promotions and salary incentives for business personnel.

According to the data of the third quarterly report, as of the end of September this year, the sales expenses of Kouzi Cellar increased by 4.
94% year-on-year to 520 million yuan
.

From the breakdown of sales expenses, the promotion fees and salaries of business personnel of Kouzi Cellar have increased rapidly
.
According to the semi-annual report, in the first half of this year, the advertising and publicity expenses of Kouzi Cellar were 187 million yuan, a year-on-year decrease of 6.
79%.

During the same period, promotional and business expenses increased by 23.
89% year-on-year to RMB134 million, and employee compensation was RMB14.
1046 million, a significant increase of 35.
17%
year-on-year.

In the financial report, Kouzi Cellar frankly said that if the company strengthens brand promotion and marketing promotion in response to competition, and increases promotional efforts, resulting in a significant increase in marketing expenses, it will have an impact on
the company's profitability.

At present, the channels of Kouzi Cellar are still dominated by traditional offline group buying, how will the company adjust its sales model in the next stage? In response to the weak demand for liquor caused by the external environment, what measures does Kouzi Cellar plan to take to boost sales and improve performance? Journalists will continue to pay attention
to related issues.

Responsible Editor: Zhang Jiazhen Review: Ouyang Meihua