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Huangtai Wine Industry suffered losses again in the first half of the year, which also means that it is once again on the verge of delisting risk.

Text/Daily Financial Report Lv Mingxia

Affected by the market environment, overall competition in the liquor industry has intensified this year, and liquor product prices have come under pressure. The performance of some liquor companies has declined year-on-year, and some have even suffered losses.

According to Wind data, as of July 22, the Shenwan Liquor Index has fallen 16.97% this year, falling to its lowest level in nearly two years. All 20 A-share liquor stocks have been "annihilated", with declines to varying degrees.

Among them, Huangtai Wine, known as the "Northwest Moutai", was not spared. Recently, Huangtai Wine released its 2024 semi-annual performance forecast, with a loss of 3-5 million yuan in the first half of the year and a non-net loss of 4-5.5 million yuan. In the first quarter, the company's net profit attributable to the parent was 870,700 yuan, a year-on-year decline of 64%, and the loss accelerated in the second quarter.

Huangtai Wine explained that in addition to the impact of the overall environment, the company suffered losses in the first half of this year due to the moderate increase in marketing efforts, which led to an increase in sales and management expenses compared with the same period last year. Huangtai Wine has experienced both glory and depression, and it is not easy to recover again.

The situation is more serious

In 2023, Huangtai Wine Industry suffered a loss of 15.0094 million yuan and had a revenue of 154 million yuan. It continued to suffer losses in 2024 and is only one step away from being issued a delisting risk warning.

From past experience, Huangtai Liquor has always been on the verge of delisting, but it has finally turned the corner. However, for more than 20 years, Huangtai Liquor has been unable to maintain stable operations and has become increasingly weak. Among listed liquor companies, Huangtai Liquor's performance has long been at the bottom.

From a regional perspective, there are currently four listed liquor companies in the Northwest, and their performance is also mixed. In the first quarter financial report of this year, except for Huangtai, the revenue of the other three listed liquor companies in the Northwest continued to maintain a high growth trend. Data shows that Jinhui Liquor, Yilite, and Tianyoude had revenues of 1.076 billion yuan, 831 million yuan, and 526 million yuan, respectively, up 20.41%, 12.39%, and 32.77% year-on-year.

Analysts in the liquor industry pointed out that the liquor industry is currently in a period of deep adjustment, with market competition intensifying and product prices under pressure. It is inevitable that some liquor companies will see a decline in performance or even losses.

However, judging from the data disclosed so far, Huangtai Wine is undoubtedly the company with the greatest performance pressure. Huangtai Wine is facing a growth bottleneck, its cash flow is fragile, and it has been in a tense state on the edge of "delisting" for a long time.

However, from the marketing aspect, Huangtai Wine is also working hard. Taking sales expenses as an example, Huangtai Wine is particularly outstanding. Although the amount of sales expenses is relatively low among the four, only 9 million yuan, it accounts for as high as 23.6%, showing the company's active investment and efforts in marketing.

Struggling to “maintain the shell” for many years

Huangtai Liquor Industry, founded in 1985, was formerly the Wuwei Distillery established in 1953. In the 1990s, it was the largest liquor and wine producer in the entire Northwest. It was successively listed as a national large-scale first-class industrial production enterprise and one of the top 100 Chinese liquor industry enterprises, and won the title of "National Excellent Light Industry Enterprise".

However, all these honors have become a thing of the past. Since the first time it was *ST in 2003, Huangtai Wine Industry has experienced five *STs in the past 20 years, multiple disputes over actual controllers, and a suspension of listing crisis. Because of its five successful shell-keeping attempts, Huangtai Wine Industry has been nicknamed "shell-keeping professional" and "A-share phoenix" by shareholders.

Huangtai Wine Industry, which was busy putting on and taking off hats, missed the golden period of development of China's wine industry. The once domineering "Huangtai in the North and Moutai in the South" has now become a topic of ridicule among investors.

The reason why Huangtai Wine Industry's performance has been poor and it has been constantly switching between being delisted and unlisted is that one of the main reasons is the company's complex equity struggle.

On January 24, 2024, Huangtai Wine Industry announced that all the shares held by Shanghai Houfeng Investment Co., Ltd. (hereinafter referred to as "Shanghai Houfeng"), a shareholder holding more than 5% of the company's shares, were frozen in turn. Shanghai Houfeng holds 9.77 million shares of Huangtai Wine Industry, accounting for 5.51% of the company's total share capital. This incident further intensified the equity struggle within the company.

The dispute between Shanghai Houfeng and Huangtai Wine has a long history. In 2010, Shanghai Houfeng spent 221 million yuan to buy 19.6% of the shares from the original largest shareholder of Huangtai Wine, becoming the largest shareholder of Huangtai Wine. However, during the period when Shanghai Houfeng was in charge of Huangtai Wine, many of its proposals were rejected by other shareholders.

Equity struggles are often accompanied by changes and turbulence in management. This instability may make it difficult for the company to form a long-term stable business strategy, thus affecting the company's overall operations. However, even if the internal struggle is resolved, it will be even more difficult for Huangtai Wine Industry, which is at the bottom of the industry, to seek greater development.

The future is full of uncertainty

In fact, in order to get rid of the sluggish performance, Huangtai Wine Industry once proposed a nationwide layout. In 2021, Huangtai Wine Industry publicly stated that it would "expand nationwide" and create a marketing model suitable for the development of Huangtai Wine Industry to enhance the overall competitiveness of the enterprise. At the same time, it will strengthen the market operation capabilities of the sales organization and build a sales team with the spirit of "Northwest Wolf", ultimately achieving high-speed sustainable development of the enterprise and expanding the national market.

However, the actual results are not significant, and Huangtai Wine Industry's sales still rely on Gansu Province. In 2023, its revenue in Gansu Province reached 132 million yuan, a year-on-year increase of 24.5%, accounting for 85.41%; its revenue outside the province was 22 million yuan, a year-on-year decrease of 36.36%.

In addition, from the perspective of products, while liquor companies are pursuing the profit-making "thousand-yuan liquor" track, Huangtai Liquor Industry has not yet gotten out of the idea of ​​relying on low-end liquor to occupy the market. In 2023, low-end liquor, high-end liquor, and mid-to-high-end liquor will be the three largest series, accounting for 53%, 21%, and 18% of revenue respectively.

Huangtai Liquor has fallen behind in the current high-end and nationalization of liquor. It is currently in a passive state. It is not easy to survive in such a squeeze. Huangtai Liquor faces multiple challenges, including the relative limitation of brand value, the product structure leaning towards the low-end market, and the lack of market influence. Therefore, the road for Huangtai Liquor to return to its former glory is not only long but also full of challenges.

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