The first shareholder meeting of Kweichow Moutai(600519.SH) after the change of leadership is held! Responding to hot issues such as dividends, prices, internationalization, etc.

On the afternoon of May 29th, Kweichow Moutai (600519.SH) held its 2023 shareholder meeting at the Maotai Conference Center in Kweichow Moutai Town. During the meeting, the newly appointed chairman, Zhang Deqin, responded to issues such as increasing dividend payout ratio, raising the suggested retail price of Feitian Maotai, progress in innovative businesses like Maotai ice cream and sauce-flavored lattes, internationalization of the business, and shareholder wine purchases. It is worth noting that ahead of the shareholder meeting, Kweichow Moutai announced that due to the number of registered attendees exceeding the capacity of the original venue, they planned to adjust the meeting location. This shareholder meeting was the largest annual meeting in recent years, with over 1700 shareholders in attendance, setting a new record since 2019. In recent years, Kweichow Moutai has shown significant financial growth. In 2023, Kweichow Moutai achieved a total operating income of 150.56 billion yuan, an 18.04% year-on-year increase, a total profit of 103.663 billion yuan, an 18.20% year-on-year increase, and a net profit of 74.734 billion yuan, a 19.16% year-on-year increase. In the first quarter of 2024, the company achieved a total revenue of over 46 billion yuan and a total profit of over 33 billion yuan, setting historical records. Ding Xiongjun promoted the "Five Unified Marketing Method" to drive marketing system reform, introduced new products like Maotai ice cream, increased the proportion of direct sales channels, and achieved profit redistribution. In terms of production capacity, in 2023, Maotai Liquor's designed production capacity reached 42,800 tons, and the series liquor's designed production capacity reached 44,500 tons, with additional capacity expected to be released in 2024. During his speech, Zhang Deqin put forward the "Three Obeisance" principle, that is, when quantity conflicts with quality, quantity obeys quality. When profit conflicts with quality, profit obeys quality, and when speed conflicts with quality, speed obeys quality. Regarding brand building, Zhang Deqin pointed out that a brand is a responsibility, a consensus among relative groups and situations. He believes that the key to brand building lies in improving reputation. In terms of Maotai's competitive environment, Zhang Deqin believes that the natural environment where Maotai liquor is brewed is characterized by cleaner water, greener mountains, and bluer skies, making the liquor more aromatic. In terms of internationalization, data shows that the company's overseas operating income in 2023 was 4.35 billion yuan, with only a 2.61% year-on-year increase. Compared to the domestic market, there is still significant room for expansion in the international market. Regarding the future planning of overseas operations, Kweichow Moutai's management responded that the company has been committed to internationalization. Currently, the overall situation of Baijiu internationalization is not very satisfactory and faces many difficulties, but Maotai has elevated internationalization to one of its top strategic priorities, and the company is currently conducting in-depth research on internationalization. Regarding pricing issues, Kweichow Moutai announced in 2023 a 53% increase in the ex-factory price of Feitian and Wuxing Maotai liquor, with an average increase of about 20%, marking the first price increase in nearly 6 years and attracting widespread market attention. Zhang Deqin stated that the company will carefully consider, analyze, and conduct research, but ultimately it will depend on the company's final operations. Regarding future operational goals, he believes that specifying a specific number is not scientific. In response to shareholders' concerns about the difficulty of buying Maotai, Zhang Deqin stated that Maotai will strive to cater to individualized consumer demands in the future. Following the meeting, Yang Delong, Chief Economist of Qianhai Open Source Fund, expressed that since the ex-factory price has already increased once, if there is an expectation of future price increases, such as an annual price increase, it would undoubtedly improve the company's performance and boost investor confidence. Of note, in this shareholder meeting, dividends were the most concerned issue for shareholders. According to Kweichow Moutai's 2023 annual report, including the special dividend in the middle of the year, Kweichow Moutai distributed a total of 56.55 billion yuan in cash dividends to shareholders in 2023, accounting for 75.67% of the company's 2023 net profit attributable to equity holders, with an increase of approximately 1.8 billion yuan from the previous year, reaching a new historical high. In response to shareholder concerns about Maotai's dividends, Zhang Deqin stated that how to distribute dividends and how to increase dividends, in a sense, the demands of state-owned major shareholders and small and medium shareholders are consistent. He also mentioned that the company will consider increasing the dividend payout ratio. Finally, regarding the relationship with Wuliangye in the future, Zhang Deqin stated that after taking office at Maotai, he visited Wuliangye and told the Wuliangye team, "Remember, competition with Maotai will intensify, I know the 'tricks' of Maotai, you may not know the 'tricks' of Maotai in the future." He also expressed that he hopes the two companies will improve each other through competition, without using resources to help each other, but encouraging Wuliangye to move forward.