The Net Profit Of Shunxin Agriculture In 2020 Is Close To A Year-On-Year Cut, And The Revenue And Gross Profit Rate Of Niulanshan Erguotou Will Drop In The Past 100 Years

In the second year of entering the "ten billion liquor enterprise", Shunxin agriculture (000860. SZ) will suffer a near cut in net profit in 2020.

On the evening of April 13, Shunxin Agriculture released its financial report of 2020. In 2020, the company's revenue reached 15.511 billion yuan, an increase of 4.10% over the same period of last year; the net profit attributable to shareholders of listed companies was 420 million yuan, a decrease of 48.10% over the same period of last year.

Real estate is a drag on Performance

After the release of Shunxin agricultural annual report, many securities companies said that their performance in 2020 was lower than expected.

For example, in the performance forecast of Shenwan Hongyuan securities, Shunxin's revenue in 2020 will increase by 9% year-on-year, and the net profit attributable to its parent will decrease by 32%.

In 2020, liquor and pork will still be the two pillar industries of Shunxin agriculture. Their revenue accounted for 65.66% and 29.89% of the total revenue of Shunxin agriculture, respectively.

As the company's largest business, the liquor industry of Shunxin agriculture realized sales revenue of 10.185 billion yuan in 2020, a decrease of 1.01% compared with the previous year. In the whole year, the output and sales volume of liquor reached 690500kl and 690100kl respectively.

Shunxin agriculture divides its liquor products into three categories: high-grade liquor, medium grade liquor and low-grade liquor, corresponding to the three price levels of "≥ 50 yuan / 500ml", "≥ 10 < 50 yuan / 500ml" and "< 10 yuan / 500ml". From the perspective of product category, both high-end and low-end liquor of Shunxin agriculture will suffer both revenue and gross profit rate decline in 2020.

The revenue of low-grade liquor represented by aging and traditional Erguotou decreased by 1.52% and the gross profit rate decreased by 10.53%; the revenue of high-end liquor represented by classic Erguotou and Centennial Niulanshan decreased by 12.68% and 0.35% respectively. Only the middle grade liquor represented by Zhenpin maintained an 11.62% growth in revenue, but its gross profit rate also fell by 3.85%.

In 2020, liquor and pork will still be the two pillar industries of Shunxin agriculture. -Visual China

In 2020, the overall sales revenue of the pork industry segment of the company reached 4.637 billion yuan, an increase of 30.26% over the previous year, which contributed to the company's main revenue increase. Among them, the sales revenue of slaughtering business was 4.209 billion yuan, and that of breeding livestock breeding industry was 427 million yuan.

In commenting on the annual report, Zheshang securities believed that Shunxin's breeding and livestock breeding industry's profitability was significantly improved thanks to the overall high operation of pig prices. "Overall, the profitability of the pork sector is relatively stable." Zhejiang Securities said.

Shunxin Agriculture said on the 14th that the expansion of real estate business losses in 2020 was the main reason for the decline in performance.

Last year, the real estate business impairment loss dragged down the profit side performance of Shunxin agriculture. In 2020, the real estate business loss of Shunxin will reach 534 million yuan, an increase of 195 million yuan compared with that in 2019.

In fact, the real estate business has been a drag on the performance of Shunxin agricultural business, Shunxin's real estate business began to lose money as early as 2011.

At the online performance presentation meeting held on the afternoon of April 14, an Yuanzhi, general manager and Secretary of the board of directors of Shunxin agriculture, said that the company would continue to focus on the development of its main business, vigorously develop the meat and liquor industry, and promote the divestiture of real estate business.

As for the schedule of real estate divestiture, Li Yinglin, chairman of Shunxin agriculture, said that foreign port projects are expected to be completed this year, and Beijing projects are also actively promoting de industrialization. The company's determination to withdraw from the real estate business remains unchanged. While taking the initiative to remove the real estate business, the company is also seeking the overall or partial project stripping scheme to solve the problems left over by history as soon as possible.

The 21st century economic reporter noticed that the promotion fee of Shunxin agriculture will increase by 54.22% in 2020. In response to this, Shunxin agriculture related people said that although the promotion fee increased, but the advertising cost also decreased by 17.60% year on year.

"Our overall (Marketing) expenses are relatively stable, but different promotion strategies bring different promotion / advertising choices. Reflected in the statement, it is the rise and fall of different expense subjects. " The person said.

The gross profit margin of high-end and low-grade liquor decreased

In Shunxin agricultural business, liquor is undoubtedly the most concerned part of the market. Although the revenue decreased slightly by 1.01%, Shunxin agriculture still held the title of "10 billion liquor enterprise" in 2020.

However, both high-end and low-end liquor, which have both revenue and gross profit margins, have their own "pain points" in 2020.

Among the 10.185 billion yuan revenue of Shunxin liquor, low-grade liquor contributed three-quarters. Bainiuer, which sold 7.632 billion yuan in the whole year, is still its basic liquor plate.

In 2020, the gross profit rate of Shunxin's low-grade liquor was 35.08%, with a decrease of 10.53%. In the liquor product series, the gross profit rate was the lowest with the largest decline.

Shenwan Hongyuan Securities believes that the main reason for the decline in gross profit rate is that "(low-grade liquor) is most sensitive to cost changes, and the cost increases and sales discounts increase".

"Low grade liquor is our mass-produced wine. If the sales volume is reduced, the cost of each bottle of liquor will be increased." Shunxin agricultural related people also said that the price sensitivity of low-grade liquor was stronger, so the gross profit rate changed more. "Last year, the rise of packaging materials and grain and other raw materials really had a certain impact, and the rise of grain price had a greater impact than the increase of packaging material price."

The gross profit rate of low-grade liquor dropped sharply, while the performance of high-grade liquor was affected by Xinguan epidemic. In 2020, the operating revenue of Shunxin high-grade liquor will drop by 12.68% and the gross profit rate will drop by 0.35%.

"Our product structure in Beijing is that the proportion of medium and high-grade liquor is relatively high. Last year, high-grade liquor was greatly affected by the epidemic situation in Beijing. " Shunxin agricultural sources told reporters.

Compared with the revenue and net profit of high-end liquor and middle-grade liquor, Shunxin's mid-range liquor achieved a revenue growth of 11.62% last year.

According to Shunxin agriculture's annual report, the precious aging series is the new product that Niulanshan has focused on Cultivating in recent two years. It has been put into some core markets such as Beijing and Yangtze River Delta, and the terminal channel display and publicity expenses also focus on covering the product. At present, treasure aging is still in the product introduction period, and the revenue growth is in line with the company's expectations.

As a result of the focus of terminal channel display and publicity expenses, the operating cost of Shunxin middle grade liquor increased by 19.27% last year.

In this regard, Shunxin agricultural personage told reporters that the treasure series must be the "fist product for restructuring and product upgrading" of the company in the future, and "this is a strategy we have formulated since 2019. In the past two years, we have been strengthening the promotion of rare aging The person said.

In a recent agricultural expert summary of Shunxin obtained by the reporter, relevant experts said that in Shandong market, where liquor competition is the most intense in China, 60% - 70% of the overall cost of Shunxin is invested in precious products. Shunxin's emphasis on treasures can be seen from this.

"Different treasures, 70% of the consumption is in the catering terminal, and big stores have entrance fees and exhibition fees. In the later stage, we need to stimulate consumers, and the cost may be higher than this year. " The expert said.

In its annual report, Shunxin Agriculture said that the sales revenue from foreign markets accounted for more than 80% of the company's total sales. According to Shunxin agricultural personage, Beijing market is the most mature market of the company at present, and its product structure and sales mode have been very mature. "In the next step, we will continue to strengthen the cultivation and strive to keep the foreign markets in line with the Beijing market." The person said.

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