Original Decadent Xiaodai Li MoneyKing
Today Kweichow Moutai rose 8.30% in one day, which is a big rebound since its 1,900 yuan platform fell.
online jokes are also freshly released: you can earn money again, and Moutai can’t buy it if it hits the daily limit.
just happened to be the third quarter report of China Merchants CSI Liquor, and its share continued to grow, from 59.9 billion shares in the second quarter to 61.6 billion shares.
This year's interim report shows that the number of CSI liquor holders is about 9.13 million, ranking first among equity fund .
With the sharp pullback of liquor, CSI Liquor has also fallen badly recently, with a rebound high of 29% since it was rebounded in July.
So, can you still get CSI liquor? Is it a rebound or a reversal today?
1
My answer is: If position is controllable, you can continue to hold it; if the position is low, you can double the fixed investment after every 10% drop.
Every time Moutai falls sharply, there will always be a voice: young people do not drink liquor, and high-end liquor will not grow in the future.
But this logic is problematic.
First of all, the penetration rate of high-end liquor is low, and the room for growth is still huge.
Although the overall growth rate of the liquor industry has declined for many years, the revenue and net profit of high-end liquor are relatively high.
According to Oriental Securities data, the national liquor production in 2020 was 7.4 million tons. Based on the sales of 7 million tons, it is estimated that the sales of high-end liquor are about 80,000 tons, accounting for about 1%.
Secondly, according to the view of China-Thailand fund manager Tian Yu, high-end liquor is the best business, no doubt about it.
This is a fund manager who has made money on liquor many times and successfully escaped from to . He recognizes that high-end liquor is in line with the characteristics of long slopes, thick snow and slow change, but a good business also requires a good price. If it is expensive, sell it and buy it back when it is cheap.
For example, he reduced his holdings in liquor stocks in the fourth quarter of 2020, but increased his holdings in liquor stocks in the third quarter of 2021.
2
Why is it said that high-end liquor is the best business?
This starts with the consumer's purchasing behavior.
Most of the consumption scenarios of high-end liquor are banquets, and wine is an important tool to quickly improve the lively atmosphere during the period.
In many occasions, the level of wine is also considered to be a reflection of the banquet's attention to guests, which creates an important condition for a good business of consumer goods - the separation of buyers and users.
Its impact on purchasing behavior is decisive. Such an agency relationship will make the buyer's subjective feeling of the product experience less important, and the general view of public is the important basis for purchasing decisions.
In this way, products that occupy the mental space of consumers will have extremely strong bargaining power in terms of prices. The pricing model is not a cost bonus, and usually has an extremely high gross profit margin level .
generally more profitable industries will cause fierce competition, which will quickly become a red ocean, and profits will become less and less, and even in the end it will become less and less profitable.
But high-end liquor is different, with extremely high product barriers and brand barriers.
First of all, its production process relies heavily on unreplicable production factors (special ecological environment, long-standing white wine cellars, traditional and complex brewing processes, etc.), and has unreplicable differentiation on the product end.
For example, Kweichow Moutai, without the unique terrain of Maotai Town and Chihe Water, it cannot be produced.
Secondly, high-end liquor production is limited and products are scarce, which makes it form a cumulative effect based on its unique historical and cultural brand shaping and consumer cognition (each deepens), rather than squeezing each other.
annual sales expenses gradually accumulate into hidden brand assets, and the company's moat is digging deeper and deeper, and it has truly become a friend of "time".
0 To this day, the competitive landscape of high-end liquor Moutai, Wu and Luzhou has remained stable.
3
So what are the risks of high-end liquor?
Many people regard demand as a great risk, and they are prone to understand short-term sluggish demand as a decline in long-term demand.
The production of high-end liquor is limited, so the growth of profit mainly depends on the increase in price.
However, price increase needs to be consistent with the consumption capacity of ordinary people. If the income of ordinary people declines, it will not only affect the existing sales volume, but also affect the price increase.
After the three years of epidemic, the income level of ordinary people has been greatly affected, and this risk point is indeed visible to the naked eye.
But this risk point is based on the one-year dimension, not the 3-5-year dimension.
If we refer to the financial crisis in 2008, the stock price of LV also fell by 50%, but it rose back in 2009 and 2010, or even higher, and now it has risen three to five times more than that time.
Since people's desire to pursue a better life is eternal, as long as people's income level is restored, it is only a matter of time before the demand for high-end liquor can be restored.
4
from a long-term perspective and buying at a higher valuation is the biggest risk.
When we buy liquor, in addition to considering the company's profit growth level, we should also consider our own valuation level.
If we mainly make money for the profit growth of the company, then once the valuation premium is too high, it is easy to lose money. For example, buying CSI liquor at the beginning of 2021 has almost been cut in half.
However, as the valuation of CSI Liquor fell from 70 times to 28 times, the potential returns have become more and more attractive.
0 China-Thailand fund manager Tian Yu, who focuses on the risk-return ratio of liquor, bought Wuliangye and Luzhou Laojiao again in the second quarter of this year, which can be used as a clear signal.
And the trillion-dollar capital group has increased its holdings in Kweichow Moutai again after two years, which is also worth referring to.
The data for the third quarter of this year showed that the European Pacific Growth Fund, the largest fund in Kweichow Moutai, increased its holdings in Kweichow Moutai. held with a market value of US$1.399 billion, and its latest holdings was 5.3169 million shares, an increase of 129,900 shares from the end of the second quarter, an increase of 2.5% month-on-month.
European Pacific Growth Fund is the largest fund under the Capital Group. As of September 30, 2022, the scale reached US$119.876 billion, equivalent to RMB 863.358 billion.
The fund bought Kweichow Moutai for the first time in the fourth quarter of 2018, and continued to increase its holdings until the second quarter of 2020, and has been reducing its holdings in every quarter since then.
Increased holdings in Moutai in the third quarter of this year, which is why the European Pacific Growth Fund began to buy back Moutai after two consecutive years of reductions.
Hunter is always patient and never takes action until a good price. This is what we should learn.
