Sales revenue declined, and the net profit of Yilit in the first three quarters fell by 47.57% year-on-year.

Our reporter Wang Jinchen

In the third quarter of 2022, Yilit's revenue and net profit fell by 60.
04% and 79.
18% year-on-year, respectively, among the 19 A-share liquor listed companies that have disclosed three quarterly reports, Yilit is one of the few liquor companies
that has experienced a year-on-year decline in revenue and net profit.

Yilit mainly attributed the decline in performance to the impact
of the epidemic on the consumer market.
According to disclosure, the sales revenue of Yilit in and outside the territory of Yilit declined in the first three quarters of this year
.
Among them, the sales revenue in Xinjiang in the first three quarters was 998 million yuan, a year-on-year decrease of 9.
19%; Xinjiang achieved sales revenue of 287 million yuan, down 18.
59%
year-on-year.

In addition, Yilit issued an announcement that it expects sales revenue and net profit in 2022 to decrease by about
30% year-on-year.
This means that Elite will see a decline
in net profit for three consecutive years.
Under the decline in performance, Yilit has recently increased the layout
of sales personnel, brand investment, brand building, product marketing and promotion.

Weak net profit may now fall for the third consecutive time

Public information shows that Xinjiang Yilite Industrial Co.
, Ltd.
is a well-known enterprise of Xinjiang liquor, with a large production base of pure grain solid fermented liquor, with a finished wine production capacity of 50,000 tons / year, and a raw wine storage capacity of 150,000 tons
.
In 1999, Yilit was listed on the A-share market, and is one of the earliest listed liquor enterprises in
China.

According to the data of the three quarterly reports released recently, Yilit achieved revenue of 1.
307 billion yuan in the first three quarters of this year, a year-on-year decline of 10.
77%.

The net profit was 140 million yuan, down 47.
57%
year-on-year.
Among them, the revenue in the third quarter was 173 million yuan, a year-on-year decline of 60.
04%.

The net profit was 11.
3336 million yuan, down 79.
18%
year-on-year.

A-share liquor listed companies have recently fully disclosed their three quarterly results
.
According to combing, 5 listed companies experienced a year-on-year decline in revenue or net profit, among which Yilit's net profit fell significantly, and revenue and net profit declined
year-on-year.

In fact, Yilit's net profit has shrunk continuously from 2020
.
Data show that from 2019 to 2021, Yilit achieved net profits of 447 million yuan, 342 million yuan and 313 million yuan respectively, a year-on-year increase of 4.
43%, -23.
48% and -8.
53%
respectively.

In the first half of this year, Yilit achieved revenue of 1.
133 billion yuan, a year-on-year increase of 9.
96%; The net profit attributable to the parent was 128 million yuan, a year-on-year decrease of 39.
46%.

For the decline in performance, the financial report said that it was mainly affected by the epidemic, logistics and sales were hindered, and sales revenue decreased
.
The financial report also reminded that as of the disclosure date of the third quarterly report, the epidemic has not yet ended, and the pressure in the fourth quarter is still huge
.
As a result, the company expects sales revenue and net profit to decline by about
30% year-on-year in 2022.

This means that Elite will see a decline
in net profit for three consecutive years.

From the perspective of operating data, at the product level, seventy percent of Yilit's revenue is contributed
by high-end wine.
However, in the first three quarters of this year, the sales revenue of Yilit high-end fell by more than 20%.

From January to September 2022, the sales revenue of Yilit high-end wine, mid-range wine and low-grade wine was 821 million yuan, 392 million yuan and 71 million yuan respectively, a year-on-year decrease of 21.
95%, an increase of 16.
65% and an increase of 13.
75%.

At the level of regional sales, as a veteran local wine company, Yilit has a strong channel advantage in Xinjiang, accounting for more than half
of the regional market share.
In the first half of this year, Yilit achieved sales revenue of 927 million yuan, a year-on-year increase of 18.
85%.

Overseas sales achieved sales revenue of 206 million yuan, a year-on-year decrease of 17.
5%.

In this regard, the financial report explained that the company's revenue from the foreign market mainly comes from the Zhejiang market, and in the first half of the year, Jiangsu, Zhejiang and Shanghai regions were affected by the sudden epidemic, and the terminal consumption in the market stagnated; At the same time, the Zhejiang market is upgrading the structure of products, and the revenue during the adjustment period is affected, so the sales revenue of the foreign market has declined
.

The reporter noted that in the first three quarters of this year, the sales revenue of Yilit in and outside the territory
declined.
Among them, the sales revenue in the first three quarters of Xinjiang was 998 million yuan, a year-on-year decline of 9.
19%.

Xinjiang achieved sales revenue of 287 million yuan, down 18.
59%
year-on-year.

There is no small resistance to expanding the market outside the territory

From the perspective of sales channels, Yilit is mainly
customer agent.
As of the end of the first half of 2022, the company had 66 liquor distributors, an increase of 10 over the previous year
.
Among them, 56 are in Xinjiang and 10 are
outside Xinjiang.

In addition, the reporter also noted that due to the obstruction of sales, the inventory of Yilit is high, and the accounts receivable have surged
.

Data show that at the end of the third quarter of this year, the balance of Yilite's book inventory was 1.
671 billion yuan, which has exceeded the revenue
of the same period.
At the same time, accounts receivable surged from 16.
259 million yuan at the end of last year to 186.
032 million yuan at the end of September 2022, an increase of 1044.
18%.

Yilite explained in the financial report that the significant increase in accounts receivable was mainly due to the company's increase in credit lines to dealers during the reporting period, granting a total of 180 million yuan
to dealers.

In this regard, some people in the industry explained that in order to support channels, wine companies increase subsidies to distributors to relieve their pressure, which is a more common phenomenon
in the industry.

According to the above-mentioned person, liquor sales generally adopt the model of first payment and later delivery, and before receiving the order and not shipping, the liquor company will recognize the payment collected as a contract liability
.
"For liquor companies, contract liabilities are a reservoir of performance
.
"

According to the data of the third quarterly report, Yilit's advance receipt of goods was 69.
6322 million yuan as of the end of September 2022, a decrease of 16.
95%
from 83.
848 million yuan at the end of last year.

In order to promote dynamic sales, the reporter noted that Yilite recently issued a recruitment announcement to recruit 20 regional market sales business personnel, working in various cities and prefectures in Xinjiang, responsible for terminal promotion, display management and the implementation of the company's sales policies in the area under its jurisdiction, expanding new markets to develop new customers, increasing product sales scope, and following up dealer payment
.

For Yilit, which wants to "go global", expanding the number of dealers is also a key problem
that needs to be solved.

It is reported that in terms of the overseas market, Yilit has increased investment in recent years to adjust the structure of overseas channels, including signing a strategic cooperation agreement with Beijing Shengchu Marketing Consulting Company, establishing Xinjiang Yilit Brand Operation Co.
, Ltd.
, and realizing the binding of interests with distributors
.
Yilite brand in the territory of investment layout, brand building, product marketing and promotion and other work in an all-round way
.

However, at present, Yilit's expansion into the overseas market seems to be hindered
.
According to the third quarterly report, as of the end of September this year, the number of dealers outside the territory of brand operating companies was 108, a year-on-year decrease of 9.

It is pointed out that if the products of foreign liquor companies want to enter the Xinjiang market, they need to face high transportation costs, so the special geographical location is one of the advantages of Yilite becoming a famous liquor enterprise in
Xinjiang.
However, when Yilit wants to sell its products abroad, the original advantages will also become difficulties and pain points
.

Responsible Editor: Zhang Jiazhen Review: Ouyang Meihua