Reasons why liquor is favored:
1, industry characteristics
Consumption. Liquor consumption industry is closely related to people's food, clothing, housing and transportation, and has a typical weak cycle attribute. The industry market is stable in scale and has little correlation with the macroeconomic cycle. This determines that the company's performance will continue to be very good, avoiding the cyclical drawbacks of good and bad times.
Cultural attributes. Wine culture has always been a part of China civilization. You may not have seen "I advise you to drink more wine and go to the west for no reason"; You may not have read when is the bright moon? Ask for wine from heaven. " But you know, there is a man named Li Bai who is always in high spirits when he is drunk.
This is wine. As long as you grow up in China, it doesn't matter whether you drink or not. It has been deeply integrated into the blood of China people.
2. Business model
Why are liquor stocks so popular? Because it has an excellent business model.
Do not need a lot of repeated investment. When the pit is built, fermentation and wine selling will be finished;
Depreciation of fixed assets is low. Not only does the pit not need depreciation, but the longer it takes, the more valuable it is;
The cost is extremely low. Several dishes are a ladle of water, and the prices vary greatly;
There is no shelf life. The risk of inventory depreciation is very small.
The consumer group is huge. There are more than 500 million people drinking in China, and the annual consumption is as high as 30 billion kilograms, equivalent to 250,000 Daming Lakes!
3. profitability
The unique consumption attributes and excellent business model have created the unparalleled earning power of liquor.
Strong cash flow. In the face of a huge consumer group, it has excellent cash return and ensures abundant cash flow.
The profit margin is extremely high. The overall gross profit margin of the industry is as high as 70%. Among them, the gross profit margin of Moutai is above 90% all the year round, and Shunxin Agriculture, which mainly deals in low-end wines, also has 50%, which is a real legal profiteering.
4. Market trends
(1) production and sales decreased.
Before 20 16, the overcapacity of liquor, coupled with the influence of restricting consumption in Sangong places, led to excessive social inventory. In 20 19, the output of China liquor was 7.86 million kiloliters, down-9.7% year-on-year; The sales volume was 7.56 million kiloliters, down-12% year-on-year, and it was still in the downward channel.
It is worth noting that although the production and sales volume are still in the downward channel, the overall revenue of the industry has bottomed out, and the revenue of 20 19 is 561800 million yuan, up 5% year-on-year, reflecting the subtle changes in the market. Intensified differentiation
(2) Industrial differentiation
Although production and sales continued to decline, industry sales bottomed out. The income from 20 19 was 561800 million yuan, up 5% year-on-year, showing a strong differentiation trend. The sales of high-end wine continued to rise, and the market space of low-end wine was compressed. High-end liquor grew the fastest, reaching101100 million yuan in 20 19 years, and the proportion increased to 18%.