Kweichow Moutai, breaking news!

Recently, there have been many things about Maotai!

On the Dragon Boat Festival, the Feitian series plunged across the board. According to the information released by Buer Sauce Platform, the original container fell by 5 yuan-10 yuan/bottle in 2023-2024, and the price of bulk bottles fell by 40 yuan/bottle in 2024; Zodiac series, in the Year of Rabbit, Year of Tiger and Year of Pig, the price dropped from 30 yuan to 50 yuan/bottle, while in the Year of Rat and Year of Monkey, the price plummeted from 100 yuan to 200 yuan/bottle; Other series, 30 years down 100 yuan/bottle.

So, what happened? According to the news from the industry, recently, the "yellow cattle" collectively turned against the water. Due to the recent sharp drop in the price of Moutai and some rules of the game of e-commerce, "Mao Mao Circle" has launched counterattacks. In a short period of time, tens of thousands of scalpers have all applied for invoicing in wine conduct. Some scalpers said in the WeChat group: "Let e-commerce smash the bowls of scalpers, then we will smash their pots." There is even news in the market that the scalper party has run away.

Next, how much impact will this have on the price of Moutai?

"Yellow Cattle" Great Rebellion

In early trading today, liquor stocks continued to fall, with LU ZHOU LAO JIAO CO.,LTD and Gujing Distillery dropping more than 4%, while Kweichow Moutai, Shanxi Fenjiu and Wuliangye dropping more than 2%. An unexpected thing happened in the liquor market.

As of yesterday, the price of Kweichow Moutai Feitian series has been completely killed. In 2023-2024, the original box fell by 5 yuan-10 yuan/bottle, and in 2024, the price of bulk bottles fell by 40 yuan/bottle, and the price came to 2430 yuan/bottle; Zodiac series, in the Year of Rabbit, Year of Tiger and Year of Pig, the price dropped from 30 yuan to 50 yuan/bottle, while in the Year of Rat and Year of Monkey, the price plummeted from 100 yuan to 200 yuan/bottle; Other series, 30 years down 100 yuan/bottle. With the continuous decline in the price of Maotai, the huge market of Maotai has also set off a big wave.

Last night, there was a sudden news in the market: in just a few hours, tens of thousands of scalpers all applied for invoicing in liquor conduct. So, what is the reason? The fundamental reason is that the price of Moutai has fallen, and the direct reason is the shipping rules of the e-commerce platform. According to industry analysts, because consumers place orders, the e-commerce platform is not delivered in three to five days, but set for 20 days, so there is no hurry to ask for goods. When the stalls receive goods without money, they have to hit the price. For example, the merchants sell for 2,600 yuan, but they can wait until they hit the price to 2,300 yuan to receive the goods. At the same time, there are subsidies from the platform, and the difference earned once and for all is at least 300 yuan. In this way, only the scalpers lose money, such as the recovery price of 2400 yuan, and the last 2300 yuan. So the scalpers called on everyone to refuse collectively, or to receive the goods and ask for an invoice.

The merchant sets a delivery date of 20 days, so he doesn’t have to ask for goods. If he doesn’t ask for goods, he will have to make a payment when he receives the goods, and the funds will have to turn around. If no one wants goods, he will have to smash the price. It used to be that how many orders are sold today, you have to ask for goods tomorrow. If he asks for goods, he has to pay the stall. If the stall is out of stock, he has to ask for goods at a higher price. In this way, the stall has to ask for goods at a higher price, and basically there is no account period.

"But now, on the other hand, merchants don’t need to ask for goods at all. You have no money to turn over when you receive goods. I will wait for you to hit the price and I will ask for goods again. E-commerce is now eating high-priced subsidies, and then asking for goods at low prices, earning both platform subsidies and the difference in wine prices. Therefore, don’t be polite to these merchants, return the goods, compensate for the compensation, and open the invoice. When the goods arrive, let the courier not sign and drag to find the compensation for the defective products. If you don’t give it, you will refuse it. At least, the e-commerce will lose a freight fee. If you refuse to return, there is still a risk of damage. " Some scalpers said in the WeChat group: "Let e-commerce smash the bowls of scalpers, then we will smash their pots."

How big is the downside?

SDIC Securities believes that the downward trend of Maotai’s approval price is a big depressing factor for the plate. Due to the weak high-end demand, the delivery structure and rhythm of Maotai, the approval price of Maotai still fluctuates and falls, and the market is worried that there is a phenomenon of financial attribute self-eating, that is, the expectation of falling prices will not only weaken the investment demand, but also promote the release of some collection products in the market.

They believe that the main contradiction at present lies in weak demand. After the direct marketing system and non-standard products have no higher price difference, scalpers no longer play the role of distribution channels, and it is difficult for the corresponding products to reach consumers effectively, leading to irrational pricing. For example, the consumption scene of non-standard products is relatively small, which leads to a serious imbalance between supply and demand after heavy volume, and then the approval price goes down. After the spread narrows, the scalper system cannot operate, which further aggravates the contradiction between actual supply and demand.

At present, national consumption is still in the stage of degradation. During the Dragon Boat Festival holiday, consumption also continued the trend of "sinking" and "falling prices" during the May Day holiday. Huachuang Securities believes that this is mainly reflected in three aspects: First, the recovery degree of per capita tourism expenditure is still not as good as that in 2019 (recovery to 89.5%). According to historical data, the recovery degree of per capita tourism expenditure has been around 90% since the May Day holiday last year. Second, cities below the third tier continue to become new growth points of tourism, and their platform orders are hotter than some first-tier and new first-tier cities. Third, the domestic and international air ticket hotel prices are lower than the May Day holiday or the same period last year.

In this context, there is a view that the current house price has fallen to the level around 2015, while the retail price of Maotai has not fallen too much. If compared with this, there is still room to kill. According to the analysis of some insiders, the current retail market of Maotai has not collapsed, and this will only happen if the retail price falls below 2,000 yuan/bottle.

Zheshang Securities believes that the market regulation measures of Kweichow Moutai have been launched one after another, and the market’s expectation of Maotai’s approval price is expected to stabilize, and the performance certainty is still strong. The liquor sector still has the characteristics of high ROE, high cash flow and improved dividend yield, and continues to be optimistic about the medium and long-term investment opportunities in the sector.

Proofreading: Zhao Yan