Su Wantang stood up, walked to Projection Screen, and opened the laptop.
The first slide appeared on the screen - China Baijiu Industry output and concentration change chart.
"Dear directors, let me first report a set of consumption data."
Su Wantang's voice is not loud, but every word is very clear.
"In the first three quarters of 2018, total retail sales of consumer goods increased by 9.3% year-on-year, and the growth rate slowed down by 1.1 percentage points compared with the same period last year.
Among them, the growth rate of retail sales in September was only 9.2%, setting a new low for the year. The overall large consumption is indeed sluggish."
She switched to the second slide, which was a picture of the production changes of Baijiu Industry.
"Baijiu Industry production has been declining for many years. From January to August 2018, the national Baijiu production dropped by 6.1% year-on-year.
Since the high point in 2016, the cumulative decline has exceeded 15%."
Shen Jue frowned slightly.
Su Wantang continued:
"However, there is a trend worth noting - the concentration of Baijiu Industry continues to increase.
The number of Baijiu enterprises above designated size has decreased from more than 1,600 in 2015 to more than 1,400 in 2018, and industry reshuffle is accelerating.
The market share of leading companies is expanding, and small and medium-sized wineries are being eliminated.
This is our opportunity."
Zhao Chen took over.
"Director Shen, you just said that Maotai dropped from 800 to 600, and Wuliangye was cut in half.
But have you noticed that Moutai's net profit is still growing, and Wuliangye's market share is still expanding.
The stock price fell not because there was something wrong with the company, but because there was something wrong with market expectations.
The market felt that large-scale consumption was no longer viable, and felt that Baijiu could no longer be sold, so it dropped the stock price.
But when Q3 Report comes out, everyone will find that Fundamentals of Baijiu company has not changed at all, only market sentiment has changed."
Sun Zhengping flipped through the materials in his hand and asked, "Which company are you planning to invest in?"
Zhao Chen said, "Shanxi Fenjiu."
Meeting Room was quiet for a moment. Shen Jue leaned on the back of the chair, looked at Zhao Chen, and did not answer the call immediately.
Sun Zhengping pushed up his glasses and wrote down the words "Shanxi Fenjiu" in his notebook.
Wu Hongyuan flipped through the market software on his mobile phone and took a look at the stock price of Shanxi Fenjiu - it had dropped a lot.
"Why Fenjiu?" Shen Jue asked.
Zhao Chen The body leans forward slightly.
"There are two reasons. First, China Resources Strategic Investment at the beginning of the year Shanxi Fenjiu."
Su Wantang switched to the third slide, and several successful investment cases of China Resources in recent years appeared on the screen.
"Everyone, please look," Su Wantang pointed at the data on the screen,
Su Wantang switched to the third slide, and several successful investment cases of China Resources in recent years appeared on the screen.
"Everyone, please look," Su Wantang pointed at the data on the screen,
"China Resources's investment ability in the field of consumer goods is obvious to all.
China Resources C'estbon, in 2018, its revenue exceeded 13.7 billion yuan, a year-on-year increase of more than 10%, with a net profit of 727 million yuan, and a market share of more than 22%, ranking second in the country for bottled water.
It took less than ten years for China Resources to go from a local brand in a corner of southern China to the second in the country.
China Resources Snow Breweries, with a comprehensive turnover of 31.867 billion yuan in 2018, a year-on-year increase of 7.2%, has ranked first in domestic beer sales for more than ten consecutive years and has the highest sales volume of a single brand in the world.
China Resources's integration capabilities and brand operation capabilities in the consumer goods industry have been repeatedly verified by the market."
Su Wantang paused and added:
"In February this year, China Resources acquired 11.45% of Shanxi Fenjiu's shares for 5.16 billion yuan, becoming the second Major Shareholder.
The total share capital of Shanxi Fen Liquor is 866 million shares, and the investment cost of China Resources is about 52 yuan/share. This is the first time China Resources has deployed in Baijiu Industry.
With China Resources's experience and resources in the consumer goods industry, Shanxi Fen Liquor's brand value and channel capabilities will be qualitatively improved.
Now the share price of Shanxi Fenjiu has dropped to more than 40 yuan, which is nearly 20% lower than the purchase price of China Resources.
It has fallen by more than 35% from the historical high price of 67 yuan before China Resources entered the market. This opportunity is better than when China Resources invested."
Zhao Chen took the call.
"Second, Baijiu Industry Q3 Report will most likely not look good. Brokerages predict that the Baijiu sector's performance growth will slow down significantly in the third quarter.
The net profit growth rate of Moutai in the third quarter may only be single digits, and the growth rate of Wuliangye and Luzhou Laojiao will also decline. The entire industry will be hit by market sentiment."
Sun Zhengping asked, "Since Q3 Report doesn't look good, why don't you wait until Q3 Report comes out before buying it?"
Zhao Chen looked at him. "Mr. Sun, after Q3 Report comes out, the market will know that something is wrong. By then, the stock price will have completely fallen.
The window of opportunity is when the market is most pessimistic.
Everyone thinks that if Baijiu fails, the stock price will be cheap. When everyone understands it, the price will not be this price."
Shen Jue was silent for more than ten seconds.
Then she asked a very practical question. "How do you plan to allocate 6.25 billion funds?"
Zhao Chen asked Chen Xi to stand up and walk to Projection Screen.
A fund allocation table appears on the screen.
"Dear directors, let me report on the specific fund allocation plan."
The voice of Chen Xi is very stable, and the data is reported one after another.
"Let's talk about Bidiya first. Currently, Henglong Capital holds 65 million shares of Bidiya, accounting for approximately 2.38% of the total share capital.
Our goal is to buy enough 4.99%.Bidiya's total share capital is about 2.728 billion shares, and 4.99% corresponds to about 136 million shares.
Currently, we hold 65 million shares, and we still need to buy about 71 million shares. Based on the current stock price of about 46 yuan, we still need to invest about 3.27 billion yuan."
"Besides, Shanxi Fen Liquor. Shanxi Fenjiu has a total share capital of 866 million shares, 4.99% corresponding to approximately 43.2 million shares.
Based on the current stock price of about 43 yuan, buying to 4.99% requires about 1.86 billion yuan of funds."
Chen Xi paused and switched to the next slide.
"The total capital of 6.25 billion yuan, minus the 1.86 billion yuan required for Fen Liquor, minus the 3.27 billion yuan required for BYD, leaves about 1.12 billion yuan.
With this money, we plan to buy approximately 3.88 billion shares of Wuliangye. Wuliangye's total share capital, 4.99% corresponding to approximately 194 million shares.
Based on the current stock price of about 60 yuan, 1.12 billion yuan can buy about 18.7 million shares, accounting for about 0.48% of the total share capital.
Although the proportion is not high, Wuliangye is the absolute leader of the strong-flavor Baijiu. Its brand value and channel barriers are extremely high, and its long-term holding value cannot be ignored."
Meeting Room was quiet for a few seconds. Shen Jue flipped through the information in front of him and asked:
"Bidiya buys 4.99% from 2.38%, and still needs 3.27 billion. This amount is not small, will it push the stock price up?"
Chen Xi said, "So we build positions in batches. Don't be in a hurry, buy slowly.
Bidiya has good liquidity. The daily average of Trading Volume is tens of millions of shares. Buying hundreds of thousands of shares every day will not have an impact on the stock price."
Shen Jue nodded and did not ask any more questions.
Sun Zhengping pushed up his glasses, looked at the data on the screen, and suddenly asked a very practical question.
"If Fenjiu's Q3 Report is really bad and the stock price continues to fall, our cost of opening a position will be lower. How to grasp this time window?"
Zhao Chen took the call.
"After Q3 Report comes out, the stock price of Fenjiu will most likely fall.
Enter the market when the market is at its most pessimistic. The cost of Fen Liquor is controlled below 40 yuan, and the cost of Bidiya is controlled below 45 yuan.
Wuliangye Wait until Q3 Report comes out. If it falls deep enough, invest all the remaining 1.12 billion."
Wu Hongyuan leaned back in his chair, looked at the fund allocation table on the screen, and nodded.
"This plan has sufficient data and clear logic. I agree."
Liu Mingyu looked around.
"Dear directors, if there are no other questions, let's vote now."
Vote.
Passed unanimously.