Summary of Key Points
The recent “increase in wholesale prices” and “doubling of performance” by Wuliangye may seem impressive, but they are actually signs of a “false prosperity”: The rise in wholesale prices is due to the manufacturer’s decision to end discounts for distributors (who are still selling at a loss), and the doubling of performance was achieved by deliberately lowering financial figures last year (resulting in actual revenue decline). The true situation can only be confirmed by subsequent semi-annual reports and sales data during the Mid-Autumn Festival and National Day holidays. For now, these two “positive indicators” are merely part of a “numbers game” that do not reflect the real market demand or business conditions.
1. Increase in Wholesale Prices: Not Due to High Demand, but Manufacturers Forcing Distributors to Raise Prices
Recently, Wuliangye’s wholesale prices have increased by 90 yuan. This is not because consumers are snapping up the product, but because the manufacturer has stopped providing discounts to distributors.
Previously, when distributors purchased goods, the manufacturer offered various incentives (such as annual rewards and rebates), so although the listed price was 1019 yuan per bottle, the actual cost was only around 800 yuan. At the end of July, the manufacturer suddenly canceled these discounts, raising the cost per bottle to 850-900 yuan. To minimize their losses, distributors had no choice but to raise the wholesale price. However, the current wholesale price in Zhengzhou is only 745 yuan, meaning they are losing money on each bottle sold.
It’s like having a 5-yuan coupon for buying milk tea, which has now been revoked by the seller; you have to pay more without any improvement in the quality of the product or increased demand.
2. Doubling of Performance: A “Mathematical Trick” from Last Year
Revenue increased by 50% in the first quarter, and the profit forecast for the上半 year has doubled, which seems impressive. However, this is based on “adjusted data from last year.”
Last year, Wuliangye made an accounting correction, reducing the revenue for the first three quarters of 2024 from 60.9 billion yuan to 30.6 billion yuan (a reduction of 30.3 billion yuan). This year’s first-quarter revenue of 22.8 billion yuan represents a 33% increase compared to the adjusted figure from last year (17.1 billion yuan), but a 34.4% decrease compared to the unadjusted figure from last year (34.8 billion yuan).
In other words, they deliberately lowered the financial base line last year, creating an artificial “hole,” and this year’s improvement seems significant only because of that baseline. It’s like scoring 50 points on a test last year and then 75 points this year, claiming a 50% improvement—although in reality, there has been no real progress.
3. Judging the Quality of Baijiu (Chinese Liquor): Don’t Focus on Growth Rates; Look at Two Key Indicators
To determine the true quality of a baijiu company, don’t be misled by percentage changes. Instead, focus on two crucial indicators:
1. Price Compliance with Costs: The wholesale price should be higher than the distributor’s cost. Currently, Wuliangye’s wholesale price is still below the cost, indicating that distributors are selling at a loss, which suggests that market demand has not increased; the price increase is merely forced by the manufacturer.
2. Actual Sales Volume: Focus on the “opening rate” (how many bottles have actually been consumed), not just the “shipment volume” (how much goods have been pressed into distribution). If more goods were shipped during the Spring Festival but fewer were sold, it indicates that the products are being held back by distributors and not actually reaching consumers.
4. The New Chairman’s “Test Period”: Three Key Figures Will Reveal the Truth
The new chairman took office in June, coinciding with these periods of “false prosperity.” Over the next three months, three key indicators will reveal the truth:
1. Semi-annual Report: Check the actual revenue and profit to see if there has been real growth (not just compared to adjusted figures).
2. Sales during Mid-Autumn Festival and National Day: These are peak seasons for baijiu sales; observe how much consumers have actually purchased and whether the opening rate has increased.
3. Will Wholesale Prices Reach 900 Yuan?: If they do, it will indicate that the price increase is driven by real demand. If they remain below the cost level, it means the manufacturer is still forcing distributors to raise prices.
Until these three figures are released, claims of “simultaneous increases in volume and price” are merely empty promises—like two sets of accounts that don’t match up and are waiting to be exposed.
(Note: This analysis is based on public information and does not constitute investment advice.)