Since 2024, the white liquor industry has been undergoing in-depth adjustments, with the mainstream consumer price band shifting downward and weak consumer demand.

Despite the industry still facing pressure, the overall performance of domestic white liquor listed companies is better than the same period last year.

According to Wind data, as of August 31, all 20 white liquor listed companies on the A-share market have released their semi-annual reports for 2024.

The report shows that the total operating income of the 20 companies in the first half of the year was 243.594 billion yuan, a year-on-year increase of 13.07%; the total net profit attributable to the parent company was 95.682 billion yuan, a year-on-year increase of 14.31%.

The white liquor industry as a whole is moving upward, but the situation varies from company to company.

Leading liquor companies such as Kweichow Moutai and Luzhou Laojiao have maintained growth in revenue and net profit, while bottom-tier companies like Jiugui Liquor and Rock Shares have seen a significant year-on-year decline in performance.

Rock Shares and Huangtai Liquor are still the only two listed white liquor companies with a net loss in the first half of the year.

At the same time, high inventory levels and a decrease in "reservoir" contract liabilities remain challenges for many liquor companies.

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Industry analysts point out that the second half of the year is a key period for the white liquor industry to adjust and also a critical period to complete the tasks for 2024.

In response, many white liquor listed companies have stated that they will take multiple measures to boost confidence and stabilize the market according to market changes.

The white liquor industry is generally improving.

At the beginning of this year, Guotai Junan pointed out in a research report that after nearly three years of adjustment, the white liquor industry will start to exert its strength from 2024, and the industry inflection point is prominent.

From the changes in key operating data such as revenue and net profit of related listed liquor companies in the first half of the year, it seems to confirm the institutions' judgment on the trend of the white liquor industry.

In the first half of this year, the total revenue of the 20 white liquor listed companies on the A-share market reached 243.594 billion yuan, an increase of 13.07% compared to 215.435 billion yuan in the same period of 2023; the total net profit reached 95.682 billion yuan, an increase of 14.31% compared to 83.705 billion yuan in the same period of 2023.

Looking at each company specifically, Kweichow Moutai remains "unique", achieving a revenue of 83.451 billion yuan in the first half of this year, a year-on-year increase of 17.56%; and a net profit of 41.696 billion yuan, a year-on-year increase of 15.88%.

Previously, Kweichow Moutai had set a goal to "achieve a revenue increase of about 15% over the previous year in 2024", and has exceeded the task.

Among other liquor companies with revenue over ten billion yuan, Gujing Gongjiu and Luzhou Laojiao have maintained a good growth rate.

In the first half of this year, Gujing Gongjiu's revenue increased by 22.07% year-on-year, and net profit increased by 28.54% year-on-year; Luzhou Laojiao's revenue increased by 15.84% year-on-year, and net profit increased by 13.22% year-on-year.

It is worth mentioning that the industry concentration of white liquor is still quite obvious.

If we take "revenue over ten billion in the first half of the year" as the standard, the revenue of the six liquor companies (TOP6) that achieved this goal reached 210.4 billion yuan, accounting for 88% of the total revenue of the 20 listed companies, and the proportion of net profit for the same period was even higher at 93%.

White liquor industry expert Xiao Zhuqing believes that the increase in revenue and net profit ratio of TOP6 shows the trend of further concentration in the white liquor industry, and under the drive of leading liquor companies such as Kweichow Moutai, the overall benefits of the white liquor industry are also steadily increasing.

There are still two companies with losses.

Leading companies drive industry improvement, but below TOP6, there are also some liquor companies that perform unusually "struggling".

Taking Xiang liquor representative Jiugui Liquor as an example, the company achieved a revenue of 994 million yuan in the first half of this year, a year-on-year decrease of 35.5%; and a net profit of 121 million yuan, a year-on-year decrease of 71.32%.

In May this year, Jiugui Liquor stated at the performance explanation meeting that "we are constantly striving to get the core terminals to accept the company's cost model, and the current effect is very obvious.

The consumer turnover ratio in 2024 has increased significantly compared to 2023".

However, judging from the semi-annual report results, Jiugui Liquor still needs to work hard in the second half of the year.

Another company with a larger performance decline is Rock Shares.

In the first half of this year, Rock Shares achieved a revenue of 191 million yuan, a year-on-year decrease of 77.32%; the net profit was a loss of 77.38 million yuan, while the same period last year was a profit of 53.5126 million yuan.

Rock Shares stated that due to financial pressure, the company failed to pay related fees to distributors in a timely manner, resulting in a setback in the cooperative relationship with distributors; in addition, the tight financial situation in the first half of the year did not improve, brand investment and market activities and other advertising propaganda were greatly reduced, which had a significant impact on attracting merchants.

In the first half of this year, Rock Shares' sales expenses were 96.7407 million yuan, a year-on-year decrease of 72.54%, but the proportion in its revenue is still higher than 50%.

It should be noted that only Rock Shares and Huangtai Liquor failed to make a profit in the first half of this year, with losses of -77.38 million yuan and -3.9727 million yuan respectively, while the two companies made profits of 53.5126 million yuan and 3.0385 million yuan respectively in the same period last year.

Huangtai Liquor is also the only company that did not exceed 100 million yuan in revenue in the first half of the year, with only 65.4995 million yuan, a year-on-year decrease of 12.07%.

Many companies have changed their senior management.

The train runs fast, all depends on the locomotive.

For the white liquor industry that requires deep accumulation, changes in senior management personnel may affect the company's development strategy and even the company's operations, so it is highly concerned.

In April this year, Kweichow Moutai announced that according to relevant documents, Zhang Deqin was recommended as a candidate for director and chairman of the company, and Ding Xiongjun was suggested to no longer serve as chairman and director of the company.

As the company with the highest market value in the A-share market, the "change of leadership" of Kweichow Moutai is a major event in the industry.

After taking office, how to balance the interests of direct sales channels and distribution channels has become a focus of attention in the industry.

In recent years, Kweichow Moutai has gradually strengthened its control over sales channels.

According to the revenue composition by channel, in 2018, the direct sales channel accounted for less than 6% of Kweichow Moutai's main business income, and by 2023 it had reached 45.67%.

In the first half of this year, it was slightly reduced, but still 41.2%.

After taking office, Zhang Deqin stated that distributors are the family of Kweichow Moutai and an indispensable key force.

In the future, Kweichow Moutai will continue to respect and care for distributors.

In addition to Kweichow Moutai, the changes in senior management of Jiugui Liquor, Rock Shares and other companies have also sparked heated discussions.

According to the announcement, Gao Feng, the chairman of Jiugui Liquor, took office in February this year.

Since the China National Cereals, Oils and Foodstuffs Corporation took over in 2016, the high-level transfers of Jiugui Liquor have been frequent, and each change is considered to be related to its poor performance.

After taking office, Gao Feng also faces the heavy task of boosting performance.

After taking office, Jiugui Liquor changed its business strategy, shifting from national expansion to deep cultivation of the local Hunan market, and at the same time changing its marketing strategy to stimulate terminal consumption.

However, judging from the performance in the first half of the year, the reform effect of Jiugui Liquor seems to be poor.

Whether it can turn the situation around in the short term, Gao Feng faces great pressure.

Compared with the above two companies that only "changed leadership", Rock Shares has seen a "resignation wave" among senior management.

In March this year, Yan Keya, the general manager of Rock Shares, and Zou Weidong, the secretary of the board, resigned; in May, Pan Zhen, the director, Wu Jiancheng, the deputy general manager, and Chen Youwei, the deputy general manager, resigned; in June, the successor secretary of the board, Xu Chicheng, applied for resignation; in August, Gui Lixin applied for resignation from the position of deputy general manager.

Some industry observers pointed out that in addition to normal personnel changes, sudden departures of senior management will have a greater impact on the operations and marketing strategies of white liquor companies.

The poor performance of Jiugui Liquor and Rock Shares, in addition to external factors, may also be related to frequent changes in the company's senior management.

The challenges faced in the second half of the year were good overall in the first half, and the second half cannot be relaxed.

Many securities firms pointed out in research reports that the second half of the year has always been the critical period for white liquor sales.

From the data in the first half of the year, many companies face some common challenges in the second half.

The first is the pressure to reduce inventory.

According to the "2024 China White Liquor Market Mid-term Research Report" released by the China Alcoholic Drinks Association, the white liquor industry is still in the inventory reduction cycle in the first half of this year, and the characteristics of the stock era are obvious.

Financial data shows that in the first half of this year, five white liquor listed companies' inventory asset ratio (the proportion of inventory in total assets) exceeded 40%.

Among them, Jinseed Liquor has the highest inventory asset ratio, reaching 45.5%.

At the same time, Kouzi Jiao and Yingjia Gongjiu also exceeded 40%.

Relatively speaking, the inventory reduction pressure of Luzhou Laojiao, Kweichow Moutai, and Shunxin Agriculture is smaller, and the inventory asset ratio of the above companies in the first half of this year is all less than 20%.

White liquor industry analyst Cai Xuefei believes that the Chinese liquor industry is still in the adjustment cycle, and the high inventory, price inversion, and poor sales are still troubling most liquor companies, and it is impossible to solve this cyclical problem of the industry in the short term.

In order to reduce channel inventory pressure, starting from June this year, many white liquor companies have issued notices to stop shipping or increase prices, boosting the confidence of distributors while preventing core products from price inversion.

Secondly, many companies face the problem of shrinking contract liabilities.

Simply put, contract liabilities reflect the confidence and demand of distributors for white liquor products.

An increase in contract liabilities of liquor companies means that distributors have a more optimistic expectation for product sales, and will pay more in advance.

An increase in contract liabilities is also seen as a positive signal for the future sales growth of liquor companies.

Financial data shows that as of June 30, the total contract liabilities of the 20 white liquor listed companies on the A-share market were 38.069 billion yuan, a year-on-year increase of 10.7%.

However, upon closer examination, only seven companies' contract liabilities increased year-on-year, and the remaining 13 companies all declined.

Among them, the companies with a larger decline include Jinseed Liquor, Jiugui Liquor, Rock Shares, Kouzi Jiao, Shunxin Agriculture, etc., with a year-on-year decline ranging from 30% to 70%.

In contrast, Kweichow Moutai and Huangtai Liquor have a higher increase in contract liabilities, with increases of 36% and 75% respectively.

However, the rapid increase in contract liabilities of Huangtai Liquor is also related to its lower base.

In the first half of this year, Huangtai Liquor's contract liabilities were only 3.4972 million yuan, and only 2 million yuan in the same period last year.For the second half of the year's trend, many securities firms believe that the concentration in the liquor industry will further increase.

For instance, Guohai Securities believes that against the backdrop of overall macro demand pressure, liquor companies with weaker brand and channel capabilities may see a decline in performance, while the performance of leading liquor companies will maintain steady growth.

Guohai Securities expects the differentiation in the liquor sector to become more apparent in the future.

Looking at the timing, the second half of the year will soon usher in the Mid-Autumn Festival and National Day, followed by New Year's Day and the Spring Festival.

The peak sales season for the liquor industry is approaching.

In response, several listed liquor companies have indicated that they will take a variety of measures to boost confidence and stabilize the market according to market changes.

What kind of report card will each listed liquor company present for the entire year of 2024 will be revealed in the annual report, and investors can continue to pay attention.