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interface news reporter | tao zhixian

interface news editor | chen feixia

the regional liquor company lao baigan liquor (600559.sh) had a total operating income of 2.47 billion yuan in the first half of the year, a year-on-year increase of 10.65%; its net profit attributable to the parent company was 304 million yuan, a year-on-year increase of 40.25%. among the 16 liquor companies that have released semi-annual reports in shenwan baijiu, the company's net profit growth rate ranked third.

8on the 29th of the month, the share price of laoban ganjiu opened high and closed at the daily limit, at 17.93 yuan per share.

on the surface, lao baigan is worthy of market attention. however, a closer look at the financial report shows that this wine company with serious regionalization still has operational problems.

each doing its own thing

as the largest liquor company in the laobaigan flavor category, laobaigan liquor is currently the only listed liquor company in hebei province. the company is positioned as a one-flavor-based, multi-flavor-based route, with its main products being hengshui laobaigan series liquor, bancheng shaoguo series liquor (affiliated to chengde qianlongzui liquor industry), wenwanggong series liquor, wuling series liquor and kongfujia series liquor, covering the three major flavor categories of laobaigan flavor, luzhou flavor (bancheng shaoguo liquor, wenwanggong liquor and kongfujia liquor), and maotai flavor (wuling liquor).

unlike other wine companies, the five series of laobaigan wine belong to five different wineries, which are operated independently. in the first half of this year, hengshui laobaigan series achieved sales revenue of 1.252 billion yuan, accounting for 50.71% of the total operating revenue; qianlong zuibancheng shaoguo wine, wenwang gongjiu, wuling wine and kongfujia wine achieved sales revenue of 357 million yuan, 302 million yuan, 492 million yuan and 92 million yuan respectively, accounting for 14.46%, 12.23%, 19.92% and 3.74% of the total revenue respectively.

the reason why the five lao baigan liquor companies operate independently is that four of them are acquired. in april 2018, lao baigan liquor acquired four liquor companies under fenglian, namely chengde qianlongzui, anhui wenwang gongjiu, hunan wuling liquor and qufu kongfujia. after several years of development, these four companies have not gone beyond the region and are still typical local liquor companies, with their main sales in chengde, fuyang, changde and qufu respectively.

in,bancheng shaoguo liquor is a representative of the northern luzhou-flavor liquor.table, mainly engaged in the hebei luzhou-flavor liquor market, core products include bancheng heshun 1975 (positioned in the middle end, priced at around 100 yuan/bottle), etc.; anhui wenwang gongjiu belongs to huizhou liquor, which was previously one of the six golden flowers of anhui liquor army, but has gradually withered in recent years. currently, it only has a certain market share in hefei, fuyang and other regions of anhui. it is mainly positioned as a regional mass wine, and the core product price is around 100 yuan; hunan wuling liquor is a representative of hunan-style sauce-flavored liquor, and its main sales area is in hunan. benefiting from the popular sauce-flavored liquor culture in recent years, the company's performance has increased year by year, from 195 million yuan in 2018 to 979 million yuan in 2023. at present, the company's main products include the mid-high-end wuling three sauces (superior sauce, medium sauce, less sauce, priced from 550 yuan/bottle) and wuling classic fragrance (priced at around 120 yuan/bottle); qufu kongfujia liquor was once the highest bidder. in 1993, kongfujia liquor spent 10 million yuan to win the cctv advertising rights, becoming the first "cctv highest bidder" in the liquor industry. however, in 1997, affected by the "blending wine" incident of qinchi liquor from the same province, kongfujia liquor fell into an operating crisis, and the company's controlling rights changed hands several times. at present, the company is positioned in qufu, shandong, and has become a veritable regional wine.

hengshui laobaigan is the base camp of laobaigan. hengshui laobaigan is a laobaigan-flavored liquor and is the largest liquor company in hebei province. currently, the core products of hengshui laobaigan include hengshui laobaigan ancient method 20 (positioned as a mid-to-high-end product, priced at around 500 yuan/bottle), excellent grade eight (positioned as a mid-to-high-end product, priced at around 150 yuan/bottle), and blue and white hand-brewed (positioned as a folk liquor, priced at around 60 yuan/bottle). the market is positioned in hebei, with the intention of shaping hebei's status as a "provincial liquor". it has a stable consumer group and high brand loyalty in the northern market, especially in hebei.

regional mid- and low-end wine companies

the independent product lines have not been "twisted" together by lao baigan liquor. the company's five major brands have three types of flavors, and all of them are local products. the differences between the brands are huge, making it difficult to achieve coordinated development. at the same time, lao baigan liquor itself is also a typical regional liquor company and has not yet achieved national development.

as a mid-to-low-end regional liquor company, lao baigan liquor still has relatively weak brand appeal.

in terms of sales area, lao baigan liquor has not yet broken out of its home base. the company's five wineries are located in hebei, hunan, anhui and shandong provinces, and the revenue of wuling series wine (hunan), wenwanggong series wine (anhui) and kongfu series wine (shandong) is very close to the company's revenue in the above three regions, which means that the sales area of ​​these three wines is limited to the local area. it is worth mentioning that except for hebei, hunan, anhui and shandong, the company has almost no sales in other regions.

as a typical mid-to-low-end regional wine company, lao baigan liquor has no national mid-to-high-end single product support, indicating that the brand has not been recognized by the market and its going-out strategy is weak. the company's gross profit margin in the first half of the year was only 65.84%, far lower than the 73.57% of anhui regional wine company yingjia gongjiu (603198.sh) and the 73.79% of jiangsu regional wine company jinshiyuan (603369.sh).

gradually marginalized

in order to reflect its high-end status, lao baigan liquor has done a lot of work in the classification of grades. in terms of product classification, generally, liquors priced below 100 yuan are mass-market liquors, liquors priced between 100 yuan and 300 yuan are mid-range, liquors priced between 300 yuan and 500 yuan are mid-to-high-end, and liquors priced between 500 yuan and 800 yuan are mid-to-high-end. lao baigan liquor directly positions all its products priced above 100 yuan as high-end products, and products priced between 40 yuan and 100 yuan (including 100 yuan) as mid-range products to enhance the "gold content" of its products.

if gross profit margin represents product positioning, then sales expenses indicate product strength. in 2023, lao baigan's sales expenses were 1.428 billion yuan, accounting for 27.16% of total revenue, ranking third among the 20 shenwan wine companies, ahead of yanshi co., ltd. (600696.sh) (formerly known as pitupipi) and jiugui liquor (000799.sz).

high sales expenses and low gross profit margins lead to low net profit margins. in the first quarter of this year, the company's net profit margin was only 12.05%, and its ranking dropped from 13th in 2022 to 16th.

what is more worrying is that the competition in the liquor industry is becoming increasingly fierce. in 2023, the total brewing output of liquor enterprises above designated size nationwide reached 44.92 million kiloliters, a year-on-year decrease of 2.8%. in recent years, the competition among liquor companies has become more market-oriented, specialized and segmented. consumers have higher and higher requirements for the brands of liquor companies, and brand concentration has also shown an increasing trend. the "matthew effect" is prominent, and the trend of strong and strong famous liquors is obvious (such as the maotai 1935 that came out of nowhere). the industry differentiation has intensified, and the market has shown a trend of concentration on national famous liquors and regional liquor leaders. the trend of strong and strong famous liquor companies has accelerated, and the channels of first-line famous liquors have sunk. the market competition with regional famous liquors has intensified. the liquor industry has entered a period of deep differentiation and the market competition has become more intense. lao baigan liquor has also repeatedly expressed concerns in its annual report that "as a regional brand, the company's products are facing the market squeezed by high-end liquors."

currently, the price-to-earnings ratio (ttm) of lao baigan liquor is 21.3 times, ranking seventh from the bottom among the 20 liquor companies under shenwan. it has no obvious valuation advantage, and investors still need to remain cautious.