2022-06-10-深交所-五_粮_液_2021年度报告（英文版）_198页_2mb

Wuliangye Yibin Co., Ltd. 2021 Annual Report Summary

Core Content Overview

Wuliangye Yibin Co., Ltd. (WLY), a leading Chinese Baijiu producer, released its 2021 Annual Report on April 29, 2022. The report outlines the company's financial performance, corporate governance, management discussion, and key operations for the year, while also addressing environmental and social responsibility.

Key Financial Information

• Operating Revenue (RMB): Increased by 15.51% year-on-year to RMB66.209 billion in 2021.
• Net Profit Attributable to Shareholders: Rose by 17.15% to RMB23.377 billion.
• Net Cash from Operating Activities: Surged by 82.16% to RMB26.775 billion, mainly due to increased revenue and cash inflows.
• Basic and Diluted Earnings per Share: Both increased by 17.16% to RMB6.023/share.
• Weighted Average Return on Equity (ROE): Improved to 25.30%, up 0.36 percentage points from the previous year.
• Total Assets: Grew by 19.08% to RMB135.621 billion.
• Equity Attributable to Shareholders: Increased by 15.59% to RMB99.068 billion.

Key Financial Highlights by Quarter

• Q1-Q4 Operating Revenue: RMB24.325 billion, RMB12.427 billion, RMB12.969 billion, RMB16.488 billion respectively.
• Net Profit: RMB9.324 billion, RMB3.877 billion, RMB4.127 billion, RMB6.050 billion respectively.
• Direct-to-consumer Model Revenue: RMB11.595 billion, with a gross profit margin of 85.05%.
• Distributor Model Revenue: RMB50.137 billion, with a gross profit margin of 79.19%.

Exceptional Gains and Losses

• Total Exceptional Gains/Losses (RMB): RMB49.345 million.
• Main Components:
  • Gain on disposal of non-current assets: RMB-23.623 million.
  • Government grants through profit or loss: RMB184.126 million.
  • Capital occupation charges: RMB2.145 million.
  • Non-operating income/expense: RMB-80.307 million.
• Income Tax Effects: RMB21.011 million.
• Non-controlling Interests Effects (net of tax): RMB11.985 million.

Corporate Governance and Compliance

• The Board of Directors and Supervisory Committee ensured the report's accuracy and completeness.
• All eight directors participated in the review, with one voting by teleconference due to travel restrictions.
• The independent auditor was Sichuan Huaxin (Group) CPA (LLP).
• The independent sponsor was Guotai Junan Securities Co., Ltd. for the period from January 1, 2021, to December 31, 2021.
• No significant differences were found between quarterly financial data and the annual report.

Management Discussion and Analysis

Industry Overview

• The Baijiu industry faced downward pressure but showed steady revenue growth of 18.6% year-on-year.
• The industry is becoming more concentrated among top producers, strong brands, and major production areas.
• This trend strengthened the competitive advantage of leading brands like Wuliangye.

Principal Operations

• The company focuses on Baijiu production and sales, with no change in its primary business operations.
• Wuliangye-branded Baijiu is a classic strong-flavor Baijiu, with other series like Wuliang Chun (Spring), Wuliang Chun (Rich Flavor), Wuliang Tequ, and Jianzhuang developed using different production techniques.
• The company emphasized brand value, product strategy, and channel transformation to improve market presence and consumer engagement.

Sales Models

• Distributor Model: Traditional channel operators, exclusive stores, and KA marketplaces.
• Direct-to-consumer Model: Group purchase and online sales through platforms like Tmall, JD, and WeChat.

Distributor Analysis

• The top five distributors accounted for RMB6.058 billion in sales, or 9.15% of total revenue.
• No accounts receivable from top five distributors at year-end.

Retail Store Sales

• Retail stores accounted for more than 10% of total sales.
• Exclusive store numbers increased slightly in all regions, with a total of 1,545 stores at year-end.

Online Sales

• Wuliangye-branded Baijiu and other series were sold online via Tmall, JD, and WeChat.
• The company's online direct-to-consumer sales strategy showed growth.

Purchase Models

• The company uses market-based purchases for raw materials, packaging, and energy.
• No significant changes in the price of major raw materials year-on-year.

Production Models

• All Baijiu products are produced in-house.
• No commissioned processing or production was involved.

Core Competitiveness

Wuliangye's core competitiveness is rooted in five unique aspects:

1. Natural Environment: Unique to the region.
2. Ancient Fermentation Pits: Over 600 years of history.
3. Five-Grain Formula: High-quality and world-renowned.
4. Unique Fermentation Techniques: Create a distinctive microbial zone.
5. Harmonious Culture: Symbol of Chinese culture.

In 2021, the company focused on quality improvement, technological innovation, and cultural construction. It also enhanced its market support and aligned with the trend of consumption upgrading.

Conclusion

The 2021 Annual Report highlights Wuliangye's continued growth in operating revenue and net profit, with a strong emphasis on brand value, product optimization, and digital transformation. The company's core strengths in production and quality, combined with its strategic focus on market expansion and consumer engagement, position it well for future development. The report also underscores the company's compliance with financial and governance standards, as well as its commitment to environmental and social responsibility.