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[Introduction] Kweichow Moutai's revenue in the first half of the year was 81.931 billion yuan, and the annual dividend rate is expected to be no less than 75% in the next three years.

China Fund News reporter Qiu Dekun

On the evening of August 8, Kweichow Moutai’s 2024 semi-annual report was released, showing two highlights!

First, Kweichow Moutai exceeded its performance target for the first half of 2024. The company achieved operating income of 81.931 billion yuan in the first half of 2024, a year-on-year increase of 17.76%; net profit attributable to the parent company was 41.696 billion yuan, a year-on-year increase of 15.88%.

Second, Kweichow Moutai has formulated a dividend plan for the next three years. From 2024 to 2026, the company's total cash dividends distributed each year are planned to be no less than 75% of the net profit attributable to the parent company in that year, and the annual cash dividends will be implemented twice (annual and mid-term dividends).

As of the close of August 8, the share price of Kweichow Moutai was 1,430.69 yuan per share, with a total market value of 1.8 trillion yuan.

Exceeded 2024 first half year target

Kweichow Moutai concluded that the company's main indicators in the first half of 2024 were stable and improving.

Specifically, in the first half of 2024, the company achieved operating income of 81.931 billion yuan, a year-on-year increase of 17.76%; net profit attributable to shareholders of the parent was 41.696 billion yuan, a year-on-year increase of 15.88%.

Previously, Kweichow Moutai set a full-year target for 2024 as "planning to achieve a 15% increase in total operating revenue over the previous year." In comparison, Kweichow Moutai exceeded the target required to be completed in the first half of 2024.

Secondly, the output of Moutai base liquor is about 39,100 tons, and the output of series liquor base liquor is about 22,700 tons. Kweichow Moutai said that the base liquor of each round of the company meets the characteristics of the round, and the production quality is stable and improving.

Kweichow Moutai said that the company has successfully achieved the goal of "half of the time and half of the tasks completed", laying a solid foundation for completing the full year of work in 2024.

Industry insiders analyzed that the second half of 2024 is a critical period for the current round of adjustments in the liquor industry. As a leading liquor company, Kweichow Moutai's operating conditions in the first half of 2024 will have some implications for the development of other liquor companies.

The number of dealers increased by 18

As of the end of June 2024, Kweichow Moutai has 2,097 distributors in China and 106 distributors abroad. Among them, Kweichow Moutai added 18 new distributors in China in the first half of 2024, all of which are distributors of series wines; and reduced 1 distributor.

Kweichow Moutai introduced that the company's products are sold through direct sales and wholesale agent channels. Among them, direct sales channels refer to self-operated and "i Moutai" and other digital marketing platform channels, and wholesale agent channels refer to social distributors, supermarkets, e-commerce and other channels.

In comparison, by the end of June 2023, Kweichow Moutai had 2,082 distributors in China and 106 distributors abroad. Among them, Kweichow Moutai added one distributor in China and reduced three distributors in the first half of 2023.

Different from the previous chairman of Kweichow Moutai who vigorously developed direct sales channels, Zhang Deqin has always emphasized that "distributors are Moutai's family and an important support for Moutai's growth" since he took office as chairman of Kweichow Moutai.

Zhang Deqin previously stated that along the way, distributors have done a lot of work and are an indispensable key force for Kweichow Moutai. In the future, Kweichow Moutai will continue to respect and care for distributors, and manufacturers will work together to promote the better development of Kweichow Moutai.

Judging from the operating data, in the first half of 2024, Kweichow Moutai’s operating income included sales revenue from wholesale agents of 47.986 billion yuan, accounting for 58.57% of the operating income of 81.931 billion yuan.

In the first half of 2023, Kweichow Moutai's sales revenue from wholesale agents was 37.933 billion yuan, accounting for 54.52% of its operating revenue of 69.576 billion yuan.

That is, the proportion of Kweichow Moutai's sales revenue from wholesale agents increased by 4.05 percentage points in the first half of 2024 compared with the first half of 2023.

At present, Kweichow Moutai has made it clear that its sales channels should focus on "coordinated" development, accurately analyze the characteristics of each channel's customer base, and balance the relationship between online and offline, and between public and private domains.

At the 2024 half-year market work conference of Kweichow Moutai, the management of Kweichow Moutai proposed to build an ecosystem in which online empowers offline, offline serves online, and channel advantages are complementary through investment coordination, resource coordination, and policy coordination.

The dividend rate is expected to be no less than 75%

The "2024-2026 Cash Dividend Return Plan" (hereinafter referred to as the Plan) formulated by the Board of Directors of Kweichow Moutai shows that from 2024 to 2026, the total amount of cash dividends distributed by the company each year will not be less than 75% of the net profit attributable to the parent company in that year, and the annual cash dividends will be implemented twice (annual and mid-term dividends).

Kweichow Moutai announced that the company's board of directors formulated the above plan on the premise of ensuring that its sustainable operating capacity and long-term development are not affected, and made scientific and reasonable plans for cash dividends by comprehensively considering factors such as the company's industry characteristics, development stage, its own business model, profit level, major capital expenditure arrangements, cash flow, etc.

At the 2023 Annual Shareholders' Meeting, some investors have expressed their concerns about whether Kweichow Moutai's dividend rate can be increased. Among them, Qianhai Kaiyuan Chief Economist Yang Delong said at the meeting: "It is recommended that (Kweichow Moutai)'s future dividend rate can be stabilized at 75% or above."

Yang Delong introduced that the new "Nine National Policies" encourage companies to increase cash dividends to give back to investors. In addition, as a consumer product, Kweichow Moutai does not require a large amount of research and development investment, so it has the ability and possibility to increase the dividend rate, which can enhance the sense of gain of more investors.

At that time, Zhang Deqin, chairman of Kweichow Moutai, responded: "How to distribute dividends and how to increase dividends, in a sense, the demands of state-owned major shareholders and small and medium shareholders are consistent."

High dividends have always been one of the focuses of investors for Kweichow Moutai. Looking back, Kweichow Moutai's dividend rate in previous years was maintained at around 50%, while the dividend rate in 2023 with the addition of special dividends reached 75%.

Statistics show that Kweichow Moutai's cumulative cash dividends since its listing have reached 271.441 billion yuan, more than 123 times the amount of funds raised when it went public, and the dividend amount ranks among the top among all A-share listed companies.

Editor: Xiaomo

Reviewer: Chen Siyang

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