bestpokerbonus| On the eve of the arrival of "Mao Wufen", why did China Resources reduce its holdings of Shanxi Fenjiu?

Article | zebra consumption Yang Wei

If there is no major accident, the seating of Chinese spirits will be rewritten this year.

From the trend, Shanxi Fenjiu, which is growing more rapidly, or anti-Chaoyanghe shares on the revenue scale during the year, will turn "Mao Wuyang" into "Mao Wufen", which has lasted for more than a decade.

However, on the eve of the major change, the second shareholder of Shanxi Fenjiu, China Resources Huachuangxinrui suddenly announced the reduction of its holdings, making this scene more dramatic.

At this moment, why did Huachuang Xinrui make such a choice? Will Yanghe shares be willing to give way?

China Resources reduced its holding for the second time

Yesterday, the hottest topic in the A-share liquor plate was China Resources Huachuang Xinrui to Shanxi Fenjiu (600809).BestpokerbonusThe reduction of .SH).

Huachuang Xinrui is the second largest shareholder of Shanxi Fenjiu and the strategic investor introduced by the company during the mixed reform in 2018. Shanxi Fenjiu is booming, and all major institutions strongly recommend it. Why do major shareholders choose at this time?BestpokerbonusReduce your holdings? All sides need to weigh it carefully.

In this regard, Huachuang Xinrui has its own explanation in the reduction plan.

Up to now, Huachuang Xinrui holds 136 million shares of Shanxi Fenjiu, accounting for 11.16% of the company's total share capital. The company is held by China Resources Entrepreneurship and Lianhe Fund by 80.62% and 19.38% respectively.

According to the relevant cooperation agreement of Lianhe Fund, facing the arrangement of fund expiration and withdrawal, it is necessary to reduce its indirect holdings of Shanxi Fenjiu shares. As a result, Huachuang Xinrui plans to reduce its holdings of no more than 8 million shares through bulk trading. According to the closing price of Shanxi Fenjiu on May 21, the market value of these 8 million shares is more than 2 billion yuan.

In the announcement of the reduction of holdings, China Resources Entrepreneurship said that it had firm confidence in the development prospects of Shanxi Fenjiu and highly recognized the long-term value of the company. Will continue to hold Shanxi Fenjiu shares through Huachuang Xinrui, there is no plan to reduce the holdings.

Even so, the announcement of the reduction caused great fluctuations in market sentiment. At the opening of trading yesterday, Shanxi Fenjiu fell more than 3%. Although there was a slight increase in intraday trading, it still fell 1.22% throughout the day, leading the A-share liquor sector down, with the market value losing 4 billion yuan a day.

In fact, this is not the first time Huachuang Xinrui has reduced its holdings of Shanxi Fenjiu. In the third quarter of 2023, 2.7 million shares were reduced through block trading, cashing out hundreds of millions of yuan. At that time, its shares in Shanxi Fenjiu had just passed the 60-month limit period agreed upon in the agreement. Because the new rules for reducing holdings have not been issued, the behavior of reducing holdings has not been announced. That silently reduced holdings, most likely because of Lianhe Fund due to withdraw from the relevant arrangements.

If it is calculated according to the shares of Huachuang Xinrui held by Lianhe Fund, it may further reduce its indirect holdings of Shanxi Fenjiu shares.

A successful investment

China Resources Entrepreneurship is the strategic business unit of China Resources Group's integrated consumer goods and retail services business, which has three major business segments: beer, food and beverages. Among them, China Resources Beer is the largest beer production and sales enterprise in China, and Yibao is the leader of pure water subdivision track.

But in the past, in the field of liquor with Chinese characteristics and great growth, it has always been a blank area of China Resources.

In 2018, to promote the mixed reform of Shanxi Fenjiu, we need a partner with strong strength and broad vision to jointly promote the company to implement the nationalization strategy more quickly. China Resources is undoubtedly a good choice.

In February of that year, Fenjiu Group transferred 11.45% of its stake in Shanxi Fenjiu to Huachuang Xinrui, with a transfer price of 52.04 yuan per share, with a total consideration of 5.16 billion yuan.

Since then, Shanxi Fenjiu started the revival plan, under the high-end and national two-wheel drive, ushered in a period of rapid growth for several years.

In 2018, the revenue of medium and high-priced spirits was 5.739 billion yuan, accounting for 61.66% of the company's liquor business income. By 2023, the two groups of figures rose to 23.203 billion yuan and 73.10% respectively, while the gross profit margin of medium-and high-price spirits rose from 75.18% to 84.09% in the same period.

Fen Liquor is the national standard maker of Chinese Fen-flavor Liquor. It won the first-class medal of Panama World Exposition in 1915 and is the only Chinese liquor brand to win this honor.

In its Xinghua Village, du Mu even asked the shepherd boy where there was a restaurant, and he pointed to the apricot blossom village in the distance, endorsing its long history.

However, for a long time, Shanxi Fenjiu did not really go to the national market. Until 2019, the company's market revenue outside the province reached 5.96 billion yuan, surpassing Shanxi Province for the first time with a slight margin of less than 200 million yuan. In 2023, the company's market revenue outside the province reached 19.659 billion yuan, accounting for 61.93% of the company's alcohol revenue.

From 2018 to 2023, the revenue scale of Shanxi Fenjiu continuously broke through the 10 billion, 20 billion and 30 billion yuan mark, and the net profit of returning mother also broke through the 10 billion mark in 2023.

During this period, the company's share price also ushered in a big rise. Based on the closing price on May 21, Huachuang Xinrui invested in Shanxi Fenjiu, with a floating profit of more than 30 billion yuan.

After Shanxi Fenjiu, China Resources invested money in seed wine and Jinsha wine industry, but failed to write successfully.

The number of seats may change greatly.

In the past, the Chinese liquor industry was known as "Mao Wujian". Later, with the relative decline of Jiannanchun, Yanghe replaced it, and the top three in 2010 became "Mao Wuyang".

The status of Maotai and Wuliangye in Chinese spirits is almost unshakable, and the third member of the industry has become the focus of the industry. Shanxi Fenjiu and Luzhou laojiao (000568.SZ) are both strong contenders for this position. Judging from the trend, a major change in the ranking of this industry is likely to occur this year.

In 2023, the operating income of Yanghe, Shanxi Fenjiu and Luzhou laojiao is 33.13 billion yuan, 31.93 billion yuan and 30.23 billion yuan respectively. Yanghe is in the lead temporarily, but the gap between the three companies is not too big. However, in terms of growth rate, Shanxi Fenjiu and Luzhou laojiao have far exceeded Yanghe shares.

In fact, according to the index of net profit of returning mother, Luzhou laojiao has already opposed 1 billion yuan of Chaoyang River with 10.37 billion yuan in 2022 and continued to take the lead with 13.25 billion yuan in 2023.

In 2023, Shanxi Fenjiu also caught up and achieved a net profit of 10.44 billion yuan, which covered Yanghe shares.

In the first quarter of this year, Shanxi Fenjiu continued to maintain a growth level of more than 20%, achieving an operating income of 15.34 billion yuan, while Yanghe shares grew by only 8.03%, with an operating income of 16.25 billion yuan, further narrowing the income gap between the two sides.

At the annual shareholders 'meeting held last week, Shanxi Fenjiu once again emphasized that it will strive to achieve a year-on-year increase in operating income by about 20% in 2024. Judging from the company's development trend in the past three years, this goal is very promising to be achieved.

According to media reports, Yanghe (002304.SZ) has set a revenue growth target of 5%-10% for 2024. Even if the target upper limit is successfully reached, Yanghe will hand over its position as the third largest player in the industry to the more radical Shanxi Fenjiu at the end of the year.

The majority of liquor investors have already started to use the money in their accounts to vote for trends. At the close of May 21, the market values of Shanxi Fenjiu, Luzhou Laojiao and Yanghe were 318.8 billion yuan, 282.1 billion yuan and 145.9 billion yuan respectively.