Liquor is recognized as the best business model for A shares and is the belief of value investors. Why do I say that liquor must fall?
closed today, Luzhou Laojiao announced that its operating income in the third quarter was 5.86 billion yuan, increased by 22.28% year-on-year, and its net profit was 2.685 billion yuan, a year-on-year increase of 31.05%. The contrast between the performance of
is the loneliness of the stock price. Today, Luzhou Laojiao plummeted by 8.42%, and the closing price of is 159.3 yuan, which is 319 yuan from the high point, a drop of 50%.
This round of liquor cycle started in 2018. Luzhou Laojiao rose from the bottom 33 yuan to 319 yuan, which has increased by almost ten times in less than two and a half years.
Why do I say that liquor must fall?
First, rapid growth of net profit is unsustainable
It should be said that the growth of liquor in the past few years was supported by performance, but everything has a cycle, and it is very difficult to maintain long-term rapid growth.
Let’s look at the growth rate of net profit in Luzhou Laojiao’s third-quarter report over the years. Under the influence of plasticizer , it has been very sluggish for four consecutive years from 2013 to 2016. Behind this, do people who drink liquor really stop drinking because of plasticizer? Luzhou Laojiao was not the protagonist of plasticizer back then.
I personally think that plasticizers are just a reason, and behind it is the cycle of development of liquor itself. Liquor has digested negative factors for four years and began to grow rapidly in 2017.
has increased more than four times from 1.997 billion in the third quarter report of 2017 to 8.217 billion in 2022, and has grown rapidly for six consecutive years. With such a high base, can it still grow rapidly next year?
If the growth rate drops or negative growth, how will our A-shares calculate their valuation?
Second, has the liquor really been drunk?
Today, from the weather vane of infrastructure Conch cement , to Yili Co., Ltd. and Haitian Flavor Industry, which are in urgent need of consumption, the performance pressure is extremely high, and they have all been negatively growing. Is high-end liquor so awesome?
Especially this year, the epidemic has scattered around the country and has occurred frequently. Many cities have experienced silence, offline gatherings, and engineering exchanges have been greatly affected. Most people are starting to reduce the amount of white wine. Has such a large amount of liquor been drunk? If
is drunk, why did the net profit of Huazhi Liquor Store , which is listed as a distributor, drop 39.14% year-on-year in the third quarter?
Luzhou Laojiao interim report shows that the company's sales to the top five operators accounted for 66.54%. In a typical big business system, it should be noted that the net decrease of dealers in the first half of the year was 257, a decrease of 19.64% during the same period.
The net decrease of dealers in 2021 was 264, and the number of dealers last year was last year in half this year. Why did Luzhou Laojiao distributers stop doing it? Friends who know leave a message to communicate.
Third, the price of liquor cannot be saved
In fact, high-end liquor began to loosen during the National Day, but many people are stubborn. Now Double Eleven is simply defeated.
, just talk about Wuliangye Puwu, two bottles of Pinduoduo cost 1,766 yuan. I thought it was enough to fight, but in the end, two bottles of JD Supermarket cost 1,639 yuan.
As a high-end consumer product, what will happen if the price cannot be maintained? I think everyone knows better than me.
Fourth, the production capacity exploded
In the past few years, liquor made money, and liquor companies expanded their production in a huge amount. Let me briefly talk about it. The production capacity under construction of Luzhou Laojiao accounts for 47% of the existing capacity. The output can be increased to 15,000 tons in 2020, and to 25,000 to 25,000 tons in 2025. It is also claimed that the reserve of Luzhou Laojiao base wine is 20,000 tons
Wuliangye The production capacity of high-end liquor in 2020 will be 29,000 tons, and can reach 40,000 tons in 2024.
Kweichow Moutai is estimated to be 33,300 tons in 2020, and will have a production capacity of about 45,000 tons in 2025.
The most powerful one is Gujing Gongjiu . If the expansion plan is implemented, the production capacity will be doubled directly.
When production capacity is no longer scarce and products are in a mess, is high-end liquor still high-end liquor?
Fifth, the relationship between high-end liquor and the rejuvenation of the Chinese nation is
This issue is quite complicated and won't talk about it much.
To sum up, I think although the stock price of liquor has fallen quite a bit now, it has not yet begun to kill performance and valuation, so it is not suitable to rush in to be cannon fodder.
