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Original title: Increased sales expenses and increased taxes Willing to wine industrySlowdown in third quarter performance growth Source: 21st Century Business Herald
On October 22, Shede Liquor (600702.sh) closed at 195.69 yuan per share, down 0.01% year-on-year. The wine industry has been in the trough of stock price adjustments for many days, and even the liquor stocks have not been lifted when they collectively turned red.
On October 21, judging from the first three quarters of performance released by Shede Wines, many indicators of the company set new highs in recent years. However, the year-on-year growth rate of revenue and net profit in the third quarter slowed down compared with the year-on-year growth rate in the first half of the year.
The financial report shows that from January to September, the willing wine industry achieved revenue of 3.6 billion yuan, a year-on-year increase of 105%, and realized a net profit of nearly 1 billion yuan, setting a miracle with a year-on-year growth rate of more than 200%. Times! However, in the third quarter, the revenue and net profit of the willing wine industry increased by about 60% year-on-year respectively, which was not as fast as the year-on-year growth rate in the first half of this year.
A number of indicators hit new highs
Before the actual controller Guo Guangchang took over, Shede Wines was deeply involved in the turmoil of listed company funds being occupied by the original major shareholders. Coupled with the superimposed impact of the epidemic, Shede Wines experienced a decline in both revenue and net profit in the first half of last year. At 1 billion yuan and 160 million yuan, the sales scale and profitability have shrunk significantly.
In the first three quarters of last year, with the gradual control of the epidemic, the revenue of the wine industry has not recovered to the level of the same period in 2019, a year-on-year decline; net profit of 310 million yuan, a slight increase from the same period in 2019.
This year is the first year that Fosun has taken control of the wine industry. With the arrival of new directors and the change of management, under the support of the old wine strategy, the wine industry is willing to take on a new look. In the first half of the year, Shede Wines achieved impressive performance in terms of revenue and net profit growth of 133% and 348% year-on-year respectively, and the growth rate of net profit exceeded the growth rate of revenue. The listed company’s share price also climbed to 266.01 yuan.
In the first three quarters of this year, under the combined efforts of mid-to-high-end wine and low-end wine, the revenue and net profit of Shede Liquor reached new highs, far exceeding the performance of the original major shareholder, Tianyang Holdings. For the current performance, Xide Liquor attributed it to the increase in sales in the wine market.
In addition to the bright revenue and net profit figures, from January to September, the net cash flow from operating activities of the willing wine industry was 1.6 billion yuan, which was nearly twice that of the same period last year. Among them, the indicator for the third quarter is the sum of the first half of this year. The amount of contract liabilities of the willing wine industry also increased significantly, reaching 850 million yuan from January to September, and this figure was less than 400 million yuan in the first half of the year.
After the accounting policy is changed, Xide Liquor will include the amount of the goods received for delivery into the contract liabilities. Although there are still accounts received in advance, from the semi-annual report, it is a small amount of money with disputes, temporary deductions or unsettled amounts over a one-year period.
Contract liabilities are the real large amounts of advance receipts, which are equivalent to the performance “reservoir”. The larger the number, the more the relationship between the “strong factory and weak business” manufacturers. There are a large amount of dealers paying in advance, and liquor manufacturers can control the delivery time to adjust the current or next income of the financial statements. The life of the winery can be said to be quite good.
This year, after entering Fosun’s territory, the Willing Wine Industry has recruited people everywhere and entered the expansion period of its sales layout. Judging from the operating data announcements in the first three quarters, there were 2,177 dealers in total, an increase of 416 from the end of 2020.
Growth slowed in the third quarter
However, in the third quarter, the growth pace of the willingness to wine industry slowed down. The year-on-year growth rate of revenue and net profit was not as good as that in the first half of the year, and the growth rate of net profit was slower than that of revenue. According to the financial report, in the third quarter, the willing wine industry achieved revenue of 1.2 billion yuan, a year-on-year increase of 65%, and realized a net profit of 234 million yuan, a year-on-year increase of 60%.
In this regard, some investors believe that the year-on-year growth rate of performance in the third quarter of this year has slowed, largely because of the larger base in the same period last year. The first half of last year was strongly impacted by the epidemic, and liquor sales were greatly affected. By the third quarter of last year, willingness to achieve explosive growth occurred, with both revenue and net profit increasing greatly from the previous month.
The 21st Century Business Herald reporter noted that, just as many indicators are outstanding, in the third quarter of this year, the sales expenses of the wine industry have increased significantly. In the first half of the year, the expenses were 340 million yuan, a year-on-year increase of 49%. Sales expenses in the third quarter increased to 600 million yuan, an increase of 62% year-on-year. Due to the increase in revenue, in the third quarter, the tax and surcharge of the wine industry increased by 200 million yuan from the 330 million yuan in the first half of the year. These factors have caused the profit growth rate to slow down year-on-year.
It is worth noting that although from January to September, the cash received by the willing wine industry for selling goods and providing labor services was 4.3 billion yuan, which was more than twice the amount of the same period last year and the same period of the previous year, but the currency funds of the willing wine industry in the first three quarters of this year Compared with the same period last year and even before the epidemic in 2019, the increase was not large, at 1.4 billion yuan.
Why didn’t monetary funds increase significantly year-on-year with revenue and net profit?
This is related to the adoption of acceptance bills in the accounts receivable of the willing liquor industry.
The company’s accounts receivable financing was at a high level. From January to September this year, it was 630 million yuan, compared with 245 million yuan in the same period last year. In the same period of 2019, this item was zero. Especially in the third quarter of this year, the financing of the receivables of the willing wine industry increased by as much as 75% compared with the first half of the year.
This year’s semi-annual report shows that all the financing of receivables is bank acceptance bills. However, the company believes that there is no major credit risk in the bank acceptance bills it holds, and there will be no major losses due to bank defaults, and no bad debt provision has been made. It can be seen that, in recent years, bank acceptance bills have increased significantly, which is an important reason for the slow growth of monetary funds in the wine industry.
The third quarterly report also reflects that the investment by the major shareholders of the wine industry and the industry are not wrong. As early as June of this year, Shede Wines announced that the company and its subsidiaries would use short-term idle self-owned funds to purchase low-risk wealth management products, with a peak value of no more than 1.5 billion yuan. Within this amount, funds can be used on a rolling basis. It wasn’t until the third quarter of this year that there was a transactional financial asset worth 1.4 billion yuan on the balance sheet of Willy Liquor. From this point of view, the real money lying on the accounts of the wine industry will not only charge interest on bank deposits. However, due to the short financial management time, the company’s current investment income is not as good as the long-term equity investment income of more than 2.8 million yuan in the same period last year.
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Editor in charge: Wei Xiaodan
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