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On the evening of March 30, Kweichow Moutai (600519.SH) released its annual report for 2022.

The company achieved operating revenue of 124.1 billion yuan in 2022, representing a year-on-year increase of 16.87%. Net profit for the year was 62.716 billion yuan, delivering a year-on-year increase of 19.55%, about 172 million yuan of profit each day. Basic earnings per share was 49.93 yuan. The company plans to distribute a cash dividend of 259.11 yuan (including tax) for every 10 shares, with a total cash dividend of 32.549 billion yuan (including tax).

After more than a year of reforms, Kweichow Moutai's performance has significantly accelerated. The year 2022 saw the fastest year-on-year growth in revenue and net profit in nearly three years, even surpassing the level of 2019. The year-on-year growth rate in net profit from 2019 to 2021 was 17.05%, 13.33%, and 12.34%, respectively. This means that Kweichow Moutai's performance has exceeded the pre-pandemic levels.

In the annual report, Kweichow Moutai stated that the main reasons for the change in revenue in 2022 include an increase in sales and changes in product structure. Last year, Moutai liquor achieved sales of 107.834 billion yuan, showing a year-on-year increase of 15.37%.

The change in revenue from the direct sales channel (referring to self-operated and iMoutai channels) was a highlight of Kweichow Moutai's 2022 performance and an important source of profits for the company.

Since 2018, Kweichow Moutai has made significant reforms to its marketing system, drastically reducing the number of distributors and expanding the direct sales channel. Kweichow Moutai's revenue from direct sales channel increased from 4.376 billion yuan in 2018 to 24.029 billion yuan in 2021.

The 2022 annual report shows that Kweichow Moutai's direct sales channel generated revenue of 49.379 billion yuan, showing a year-on-year increase of 105.49%, with a gross profit margin of 96.2%. The proportion of sales from direct sales revenue to the total increased to 39.79%.  

Kweichow Moutai's wholesale channels (social distributors, supermarkets, e-commerce, etc.) achieved operating revenue of 74.394 billion yuan in 2022, representing a year-on-year decrease of 9.31%.