Lin Chen/Text
Jingdong raises salaries and Tencent shares incentives. In the near future, the two things that have been combined are Yanghe shares, which are in the traditional liquor industry.
Recently, Yanghe Co., Ltd. officially announced a core backbone shareholding plan worth 1 billion yuan. In addition, according to the financial network industry and economics, Yanghe has recently initiated a round of salary increase for all employees. The two major moves can be described as Yanghe’s new chairman Zhang Liandong’s biggest move in terms of organizational structure in less than half a year since he took office.
High incentives are bound to hope for the kinetic energy of employees. The shareholding plan covers 5,100 people, accounting for approximately 32% of the total number of employees in Yanghe. And with such a large-scale shareholding plan, it is self-pressurizing that the revenue growth target for this year has been increased from the previous 10% to 15%.
Looking at the liquor peers, many companies have made strides with equity incentives. And Yanghe, which has gone through the two-year active adjustment period, is also ushering in its own new cycle.
Why does Yanghe self-pressurize?
According to Caijing.com, when the annual report was released in April this year and the investment briefing in May, Yanghe described the target for this year’s performance growth rate of 10%. However, in this shareholding plan, Yanghe has set the conditions for unlocking shares to be at least 15% for both 2021-2022 performance growth.
For a company with an annual revenue of about 20 billion yuan, an increase of 5% means that at least 10 more small goals must be achieved each year. If you change to Dream 6+, which is a tens of billions of single-product positioning, you will sell 300,000 more pieces each year, or about 1.2 million bottles.
Even if this goal is difficult, it is also imminent for Yanghe, which has occupied the third position in the industry for more than ten years. Since Yanghe began to actively adjust in 2019, the revenue figures on the surface have fallen by single digits for two consecutive years. The volume has been hovering around 20 billion. During this period, Luzhou Laojiao and Shanxi Fenjiu were catching up to the third place in the industry.
In particular, Shanxi Fenjiu, its equity incentive plan announced at the end of 2018, set unlocking conditions including using 2017 as the base, and the revenue growth rate in 2021 will not be lower than 150%. Roughly converted, its annual income target for this year is 15.09 billion yuan. The just announced performance forecast for the first half of the year shows that its half-year revenue is between 11.737 billion yuan and 12.427 billion yuan. Obviously, this speed has threatened the seating of Yanghe.
“After Zhang Liandong officially took office, he led his team to intensively visit many leading wine companies in the industry. Internally, senior executives were also required to go to the front line of the market and have direct dialogues with distributors to understand the situation.” A person familiar with the matter told Caijing.com. The purpose is to shorten the information transmission time between the headquarters and the grassroots.”
“Dong Zhang was the Secretary of the Party Working Committee of Yanghe New District, Suqian City before, so he has always understood Yanghe’s situation.” A Yanghe employee also revealed to Caijing.com that after the new chairman came, the company did Feel the pressure. “But I think everyone has a faster pace compared to the previous two years. It is a good thing for individuals to see changes.”
How does Yanghe drive itself?
And from pushing actions from top to bottom to taking the initiative to “run”, this may be the original intention of Yanghe’s shareholding plan. As for how to run at a big pace, Yanghe’s internal dream 6+’s ten billion positioning, the latest version of Tianzhilan, the external dislocation competition of Shuanggou, and the urgent need for a national layout of expensive wines are all the new increase in Yanghe’s grasp. hand.
At the shareholders’ meeting in May last year, Yanghe said that it hopes to completely solve market problems through adjustments and accumulate potential energy for the next stage of the company. The investment activity record sheet 4 months later shows that Yanghe believes that through the adjustments made in the previous period, the inventory of dealers has declined.
The recent Huachuang Securities Research Report revealed that Yanghe’s inventory level has been at a historically low level this year, and the channel inventory in East China, Henan, and Hubei has been around one month.
This year’s quarterly report also further verified the arrival of the turning point. Q1 Yanghe’s net cash flow from operating activities increased by 987.75% year-on-year to 2.92 billion yuan, turning from negative to positive. In addition, advance receipts amounted to 6.129 billion yuan, and sales receipts amounted to 9.433 billion yuan, +57.22% year-on-year.
Zhongtai Securities analyzed at the end of April that the strong payment of dealers was related to the increased enthusiasm of dealers to make payments under the dream 6+ price increase. Under the quota system, dealers had low inventory and sufficient profit margins, and the approved price was stable at more than 620 yuan. . Two and a half months later, Zhongtai Securities reminded that the market price of Dream 6+ had risen to about 650 yuan.
Dream 6+ is very expensive in the off-season, and the blue sky, who is about to spend the 18-year-old adult gift, is preparing to launch the new version 2021. In 2003, Tianzhilan swept the country with the ad slogan “The widest in the world is the sea, the sky is higher and farther than the sea, and the feelings of men are bigger than the sky”. In 2013, the fourth generation of Tianzhilan entered the political and business elite circle. In 2015, Sky Blue completed the fifth upgrade by adding more aged wines.
“Sky Blue has always been the best choice for business banquets, wedding banquets, and family banquets.” A dealer from Gulou District, Nanjing said, “I believe the quality and appearance will be better after this upgrade.”
Yanghe’s layout in the high-end and mass markets has also added Shuanggou and expensive wine. At this year’s Sealing Ceremony, Zhang Liandong announced that Shuanggou will adopt a dislocation and a different model from Yanghe, emphasizing the value of dealers, giving more attention to the initiative and enthusiasm of dealers, and also emphasizing the transfer of profits to dealers. Transfer profits to end customers.
At that time, it also mentioned that the goal of double-famous wine was to make Yanghe’s comprehensive competitiveness stronger than that of famous wine companies, better than the head camp, faster than the industry average, and higher than market expectations.
And the current development speed is faster than the industry average is obviously sauce-flavored wine. Recently, many brands including Shuijingfang and Hainan Yedao have announced that they have joined forces with local companies in Guizhou to set foot in sauce and wine. As early as 2016, Yanghe, which spent 190 million yuan on the acquisition of Guizhou Guizhou wine, had very little mention of the wine in its past financial reports. Most only Guijiu, as a subsidiary, has information on the ending book balance of RMB 943.3 million.
But now, many regional markets have “turned from foreign to sauce”, and the sauce-flavored wine track has expanded. How to make your wine bigger and stronger, Zhang Liandong once revealed at the exchange meeting that the business of your wine products will be good in 2020, but the volume is still relatively small. In 2021, the company will further focus on the creation of precious wines and promote the national layout of precious wines. The current personnel and organizational structure have been further expanded and improved.
Concluding remarks
It is said that both Ma Yun and Sun Zhengyi believe that if you want to choose between “first-class idea, third-rate implementation” and “first-class execution, third-rate idea”, you should choose the latter.
Yanghe’s core backbone shareholding plan is obviously intended to solve the implementation problem. In June of this year, Yanghe launched the “Hundred Days Tackling” special action, officially sounding the clarion call of “Second Entrepreneurship”.
The last Wuliangye who shouted the slogan “Second Entrepreneurship” used a shareholding plan to make employees and dealers 16 times profitable in three years, and also allowed itself to jump from 30 billion + revenue to 50 billion +.
After the adjustment of the 20 billion steps is completed, a better era belonging to Yanghe people still has to rely on Yanghe people to fight on their own.
【Author: Lin Chen】 (Edit: Lin Chen)
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