[China Liquor Network] On July 30, liquor stocks continued to fall, and Kweichow Moutai reported 1,379.99 yuan/share, down 1.29%, a new low since December 2022. First - and second-tier liquor stocks generally fell, and Luzhou Laojiao's share price hit a new low in nearly four years. Behind this or the turbulent adjustment of the liquor industry, the wholesale price of many liquor products has shrunk sharply. How long will this industry adjustment cycle last?
Ubs reckons Kweichow Moutai's wholesale prices could fall by 50%
In fact, the topic of "Kweichow Moutai's stock price fell below 1,400 yuan" has become a hot spot for major investment platforms. Kweichow Moutai's share price hit a new low since December 2022. The topic continues to ferment, causing a lot of attention.
The outside world believes that the decline of liquor stocks in these two days or related to a brokerage report. In a previous report, UBS Securities downgraded Kweichow Moutai, Wuliangye, Luzhou Laojiao and Yanghe shares from buy to neutral, and expected the average compound annual growth rate of earnings per share of baijiu companies covered in 2023-2025 to slow to 8% from 19% in 2020-2023.
In addition, UBS Securities also proposed in the report that if the industry leaders fail to control supply, the pessimistic scenario shows that by the end of 2025, the wholesale price of Kweichow Moutai and Wuliangye may fall by 50% and 17% from the current level.
In this regard, Wuliangye responded to reporters that the current wholesale price of Wuliangye products in the market remains stable, and the company is not convenient to comment on stock price fluctuations.
Liquor industry channel dealer Lao Ma (a pseudonym) told reporters that the current wholesale price of loose bottle Wuliangye is about 850 yuan/bottle, and the wholesale price of box Wuliangye is about 910 yuan/bottle, each bottle fell about 40 yuan compared with the previous.
Feitian Moutai wine price decline is attracted a lot of attention some time ago. "The continued decline in the price of Feitian Moutai has had a certain impact on the entire industry, and the industry has begun to bubble, and then it will return to rationality." People close to Wuliangye told reporters frankly.
Lao Ma believes that the wholesale price of Guizhou Moutai and Wuliangye has indeed declined, but the market transaction performance can also be discussed because the large company itself is concerned. In fact, the end market prices of other liquor brands have fallen even more.
"For example, the current market wholesale price of Xijiu Junpin is only 700 yuan per bottle, nearly halved, and the price of Diaoyutai products has also fallen across the board." There are also many unknown emerging baijiu brands that have relied on advertising to achieve some growth in the past few years, and now the price has shrunk significantly and the sales are poor." "Said the old horse.
The Shenwan Liquor index has halved in more than three years
According to the data, as of the close on July 26, 2024, the Shenwan Liquor index fell 51% compared to the high point on February 10, 2021, and most of the company's share price fell close to or more than the maximum retreat in the previous round.
Behind the sharp decline in the stock price of listed liquor companies, or the industry has entered a new stage of development. The relevant people close to Wuliangye said that the liquor industry may enter a period of turbulence and adjustment.
On June 19, 2023, the China Wine Industry Association released the "2023 Chinese Liquor Market Interim Research Report", which states that the liquor industry and the liquor market have entered a new round of adjustment cycle in 2023, and the liquor industry will show a rational growth trend.
On June 18, 2024, the China Wine Industry Association released the 2024 Chinese Liquor Market Interim Research Report. The report believes that the recovery trend of the liquor market in 2024 is weak, 80% of enterprises under the stock competition said that the market has been cold, and diversified consumption, strong differentiation, and wide competition have become a fact.
Liquor industry analyst Xiao Zhuqing told reporters that the main problem facing the liquor industry is insufficient purchasing power, and it is an indisputable fact that the liquor consumption scenario is reduced. However, at present, high-end liquor enterprises represented by Kweichow Moutai are undergoing active transformation, from seizing channels in the past to closely connecting C-end consumers today, high-end liquor enterprises are mining new consumer groups.
Liquor industry analyst CAI Xuefei also told reporters that in the current liquor industry overcapacity, insufficient market demand, the development of the entire wine sector under pressure. However, in essence, the scarce consumer goods properties of famous wine have not changed, and its demand in social consumption scenes such as gifts and business is still strong. It is believed that with the arrival of the liquor sales season in the second half of the year, liquor stock prices will return to normal. However, at present, the liquor industry is still in the double adjustment and superposition period of society and industry, industry channels and product prices need time to repair, and the market as a whole is still in the bottom stage.
The turbulent adjustment of the liquor industry in this round is longer than the trough period of the liquor industry in the previous round (2012-2016). The latest research report released by Guotai Junan Securities believes that there are differences between the trough period of this round of liquor and the previous round, and the adjustment intensity of demand and expectation is relatively small, but the adjustment time is longer.
Based on this, Guotai Junan Securities believes that at the current point in time, the liquor sector has been significantly adjusted by weak off-season demand, high-end wine approval prices and other factors, and the risk appetite at the denominator end is at a low level, and the overall determination is ahead of growth.