Core Viewpoint - The financial reports of the Hong Kong stock market reveal significant performance pressures, but the strategic direction and growth logic evolution are more noteworthy. The company Zhenjiu Liduo has delivered a high-quality performance under market pressure and has released new growth expectations, making it a valuable subject for analysis [1] Financial Performance - Zhenjiu Liduo achieved a revenue of 7.07 billion RMB in 2024, reflecting a year-on-year growth of 0.5%. The adjusted net profit reached 1.68 billion RMB, up 3.3%, with key indicators maintaining growth for four consecutive years. Both gross margin and adjusted net profit margin increased by 0.6 percentage points, indicating overall positive performance in profitability [2] - The overall gross margin of Zhenjiu Liduo reached 75.5% when calculated according to A-share accounting standards, significantly higher than its initial listing and on par with the average gross margin of the liquor industry. The operating cash flow net amount surged by 116.3% to 780 million RMB, marking a substantial improvement from a negative figure in 2022 [4] Strategic Adjustments - Zhenjiu Liduo has strategically controlled volume and intentionally slowed the market expansion pace of its Zhen San Shi series, focusing on high-quality products in the mid-to-high-end price range, which saw an 8.8% year-on-year increase in revenue [4] - The company has also reduced low-margin, low-price products in its e-commerce channels and cut several hundred million RMB worth of side products, maintaining long-term growth potential. As a result, distribution revenue grew by 2.1%, demonstrating strong performance [4] Market Position - In terms of industry ranking, Zhenjiu remains the fourth largest sauce liquor company in China and the largest private liquor enterprise in Guizhou. Liduo ranks fifth among blended liquor brands in China and continues to maintain the fastest growth among the top five blended brands [7] Long-term Growth Potential - The current adjustments in the liquor industry are driven by multiple long-term structural factors rather than simple cyclical fluctuations. Companies that transition from extensive expansion to high-quality development are expected to thrive in the long run. Zhenjiu Liduo's strategic choices align with high-quality development and aim to establish new growth points while creating differentiated advantages [8] - The company is actively reducing side products to stabilize its pricing system and enhance brand value, while also deepening its layout in the sauce liquor category, which is expected to capture over 50% of the liquor market share in the next decade [8] Channel and Brand Strategy - Zhenjiu Liduo is implementing a "dual-channel growth strategy," introducing new channels such as corporate group purchases and cross-industry collaborations. In 2024, the high-end liquor division achieved high double-digit growth through these new channels [8] - The company emphasizes the quality of its distributors and has seen double-digit growth in revenue per distributor for both Zhenjiu and Liduo brands in 2024. It also focuses on experiential marketing to enhance brand recognition and customer loyalty [9] Investment Appeal - Multiple factors are catalyzing the revaluation of Zhenjiu Liduo's value in the capital market. With the government prioritizing consumption recovery, market expectations for the consumption sector are rising, making Zhenjiu Liduo an attractive investment opportunity as a rare value stock in the Hong Kong liquor market [12][14]

Core Viewpoint - The financial report for 2024 reveals that the company, Zhenjiu Lid, experienced a slight revenue increase but a significant decline in net profit, indicating potential challenges in maintaining growth and profitability in a competitive market [1][2]. Financial Performance - In 2024, Zhenjiu Lid achieved a revenue of 7.07 billion yuan, a year-on-year increase of only 0.5%, while the net profit attributable to shareholders was 1.324 billion yuan, reflecting a year-on-year decline of 43.1% [1][2]. - The gross profit for the same period was 4.143 billion yuan, showing a year-on-year growth of 1.5% [2]. Sales and Brand Performance - The core brand "Zhenjiu" has seen a continuous decline in sales over the past four years, with sales figures of 14,761 tons in 2021, 12,856 tons in 2022, 12,630 tons in 2023, and 12,284 tons in 2024 [4]. - Other brands, including "Lidu," "Kaitou," and "Xiangjiao," contributed over 30% of revenue, but also experienced sales declines in 2024 [4]. Cash Flow and Inventory Management - Despite profit pressures, the company's operating cash flow improved significantly, reaching 781 million yuan in 2024, a year-on-year increase of 116.3% [4]. - Inventory levels have risen sharply from 1.74 billion yuan in 2020 to 7.503 billion yuan in 2024, indicating potential issues with inventory management and channel profitability [5][6]. Pricing and Market Challenges - The company faces pricing pressures, with significant discrepancies between suggested retail prices and actual market prices for key products, leading to concerns about channel control [5]. - The average annual sales per store have decreased to 920,000 yuan, indicating declining channel efficiency [5]. Strategic Positioning and Market Dynamics - The overall white liquor market is characterized by a few dominant players, with Zhenjiu Lid struggling to establish a strong foothold in the high-end segment [7]. - The company's high-end product revenue accounted for only 24% of total revenue, with a year-on-year decline of nearly 11%, highlighting challenges in brand upgrading [7]. Geographic Market Focus - Zhenjiu Lid's market presence is primarily concentrated in Guizhou and Jiangxi, with local brands contributing most of the revenue [8]. - The company needs to enhance its capabilities for national brand development and consumer engagement to achieve further growth [8].

Core Viewpoint - The first performance announcement for the 2024 fiscal year from the Chinese liquor company Zhenjiu Lidu shows a slight revenue increase of 0.5% to 7.07 billion RMB and a 3.3% rise in adjusted net profit to 1.68 billion RMB, indicating resilience and strategic optimization during a challenging period for the liquor industry [1][3][4]. Financial Summary - Revenue for 2024 reached 7.07 billion RMB, up from 7.03 billion RMB in 2023, reflecting a growth of 0.5% [3]. - Adjusted net profit increased to 1.68 billion RMB from 1.62 billion RMB, marking a growth of 3.3% [3]. - Operating cash flow surged by 116.3% to 781 million RMB, indicating strong cash management [4]. Profit Quality Improvement - Adjusted net profit rose from 520 million RMB in 2020 to 1.68 billion RMB in 2024, achieving a 223% increase over four years [4]. - Gross margin improved to 58.6%, with an adjusted net margin of 23.7%, both up by 0.6 percentage points year-on-year, showcasing effective cost control [4]. Shareholder Returns - The company declared a dividend of 712 million HKD, a 16.7% increase year-on-year, reflecting confidence in cash flow and sustainable profitability [5]. - The growth in revenue from mid-range products (8.8% increase) and strategic adjustments in high-end products highlight a rational approach during industry downturns [5]. Market Trends - The mid-range liquor market (300-800 RMB price range) is experiencing significant growth, with a projected market size increase of 12% in 2024, outpacing the overall industry growth of approximately 5% [5]. - Zhenjiu Lidu's strategic focus on mid-range products aligns with market trends and consumer behavior shifts [5]. Brand Strategy - Zhenjiu Lidu's four brands (Zhenjiu, Lidu, Xiangjiao, and Kaikouxiao) are positioned across various price segments, with Zhenjiu being the main revenue driver, accounting for 63.4% of total revenue [14]. - The company is implementing a "quantity control and price maintenance" strategy, focusing on core products and optimizing customer structure [14]. Future Outlook - The company aims for high-quality development through seven key focus areas, including team building, quality management, and brand awareness [16]. - The 2024 financial report reflects a strategic shift towards "controlled growth" rather than blind expansion, providing a replicable model for other companies in the industry [16].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company is undergoing a healthy adjustment, with steady growth in its product lines, particularly in the Li Du brand, which has shown resilience in a challenging market environment [7] - The company has received multiple accolades at the 112th National Spring Sugar and Wine Commodity Trade Fair, enhancing its brand reputation [7] - The financial forecasts indicate a gradual recovery in revenue and profit margins, with expectations for non-IFRS net profit to reach RMB 16.8 billion in 2025, reflecting a slight adjustment from previous estimates [7] Financial Summary - Total revenue projections for the company are as follows: - 2023A: RMB 7,060 million - 2024A: RMB 7,067 million - 2025E: RMB 7,304 million - 2026E: RMB 8,107 million - 2027E: RMB 9,289 million - The year-on-year growth rates for total revenue are projected to be 20.56% for 2023A, 0.10% for 2024A, 3.36% for 2025E, 10.99% for 2026E, and 14.59% for 2027E [1] - The net profit attributable to the parent company is forecasted as follows: - 2023A: RMB 2,327 million - 2024A: RMB 1,324 million - 2025E: RMB 1,494 million - 2026E: RMB 1,804 million - 2027E: RMB 2,251 million - The year-on-year growth rates for net profit are projected to be 125.96% for 2023A, -43.12% for 2024A, 12.90% for 2025E, 20.71% for 2026E, and 24.77% for 2027E [1] - The company's earnings per share (EPS) are expected to be: - 2023A: RMB 0.69 - 2024A: RMB 0.39 - 2025E: RMB 0.44 - 2026E: RMB 0.53 - 2027E: RMB 0.66 [1] - The price-to-earnings (P/E) ratio is projected to be 9.58 for 2023A, 16.84 for 2024A, 14.92 for 2025E, 12.36 for 2026E, and 9.91 for 2027E [1]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company is undergoing a healthy adjustment, with steady growth expected for the Li Du brand. The report anticipates a gradual recovery in demand after a period of consolidation [7] - The company has received multiple awards, indicating strong brand recognition and market positioning [7] - Revenue and profit forecasts have been slightly adjusted due to increased competition in the mid-range liquor segment, but the long-term outlook remains positive [7] Financial Summary - Total revenue projections for the company are as follows: - 2023A: 7,060 million RMB - 2024A: 7,067 million RMB - 2025E: 7,304 million RMB - 2026E: 8,107 million RMB - 2027E: 9,289 million RMB - Year-on-year growth rates are expected to be 20.56%, 0.10%, 3.36%, 10.99%, and 14.59% respectively [1] - Net profit attributable to the parent company is forecasted as: - 2023A: 2,327 million RMB - 2024A: 1,324 million RMB - 2025E: 1,494 million RMB - 2026E: 1,804 million RMB - 2027E: 2,251 million RMB - Year-on-year growth rates are projected at 125.96%, -43.12%, 12.90%, 20.71%, and 24.77% respectively [1] - Non-IFRS net profit estimates are: - 2023A: 1,622.60 million RMB - 2024A: 1,676.28 million RMB - 2025E: 1,681.85 million RMB - 2026E: 1,929.36 million RMB - 2027E: 2,288.12 million RMB - Year-on-year growth rates are 35.52%, 3.31%, 0.33%, 14.72%, and 18.59% respectively [1] - The latest diluted EPS is projected to be: - 2023A: 0.69 RMB - 2024A: 0.39 RMB - 2025E: 0.44 RMB - 2026E: 0.53 RMB - 2027E: 0.66 RMB [1] - The P/E ratios based on the latest diluted EPS are: - 2023A: 9.58 - 2024A: 16.84 - 2025E: 14.92 - 2026E: 12.36 - 2027E: 9.91 [1]

Core Viewpoint - The white liquor industry is experiencing a downturn, with first-tier brands showing relative resilience while second and third-tier brands face significant declines in stock prices [1][2][6]. Group 1: Market Performance - First-tier liquor stocks, including Jinshiyuan, Luzhou Laojiao, Guizhou Moutai, Shui Jing Fang, and Shanxi Fenjiu, have shown slight increases, with none exceeding a 2% weekly rise [2][5]. - The WINE index saw a weekly decline of 0.97%, with second and third-tier brands like Yingjia Gongjiu, Zhenjiu Lidu, and Huangtai Liquor experiencing larger drops, particularly Zhenjiu Lidu and Huangtai Liquor, which fell over 4% [2][5]. - Guizhou Moutai led the market capitalization growth, adding 14.4 billion yuan, the only brand to exceed a 10 billion yuan increase [2]. Group 2: Company-Specific Issues - Zhenjiu Lidu's stock has declined by 11% since its annual report release, with modest revenue growth and slightly below-market expectations for net profit due to a reduction in low-margin products from its e-commerce strategy [6][7]. - Zhenjiu Lidu's revenue share for the second half of 2024 is expected to decline compared to last year, raising questions about the effectiveness of its inventory control strategy in restoring rapid growth [7]. - Huangtai Liquor has faced a continuous downward trend in stock price, attributed to poor governance, including the replacement of three secretaries in three years and a lack of cash dividends, which is rare in the liquor industry [7].

Core Viewpoint - The Chinese liquor industry is facing unprecedented operational challenges in 2024, characterized by a "double whammy" of declining volume and price due to weak consumer demand [1][2]. Financial Performance - Zhenjiu Lidu reported a revenue of 7.067 billion RMB in 2024, a slight increase of 0.5% year-on-year, while adjusted net profit rose by 3.3% to 1.676 billion RMB [2][3]. - Shareholders' net profit plummeted by 43.1% to 1.324 billion RMB, primarily due to changes in the fair value of non-operating financial instruments [2][3]. - The company experienced a significant revenue decline in the second half of 2024, with a 16.46% drop compared to the same period in 2023 [4]. Brand Performance - Zhenjiu Lidu's main brand, Zhenjiu, accounted for 63.4% of total revenue in 2024, down from 65.2% the previous year, while the Li Du brand saw an increase to 18.6% [7]. - The revenue from the Zhenjiu brand decreased by 2.25% to 4.48 billion RMB, attributed to adjustments in sales channels and a strategic reduction in product expansion [7][8]. - Li Du brand revenue increased by 18.3% to 1.313 billion RMB, helping to offset declines from other brands [8]. Inventory and Production - Zhenjiu Lidu's inventory reached a record high of 7.503 billion RMB, a 17.54% increase year-on-year, indicating challenges in revenue growth despite stable sales [12]. - The company has continued to expand production capacity, with new facilities coming online in 2024, increasing the annual production capacity of its flagship products [11]. Market Strategy - The company is focusing on high-end market penetration, but this strategy has led to increased sales expenses, which reached 1.611 billion RMB in 2024, accounting for 22.8% of revenue [17]. - Zhenjiu Lidu is implementing a diversified marketing strategy to enhance brand visibility and consumer engagement, including experiential marketing and high-end tasting events [16][21]. Industry Context - The liquor industry is transitioning from an incremental growth phase to a more competitive, saturated market, necessitating a shift towards premiumization and brand differentiation [20][21]. - The overall profitability of Zhenjiu Lidu remains under pressure, with its gross margin at 58.6%, which is lower compared to industry leaders like Moutai and Wuliangye [20].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price not specified [5]. Core Views - The company is expected to focus on long-term quality growth while actively managing inventory levels, leading to a projected revenue of 70.67 billion yuan for 2024, with a slight increase of 0.5% year-on-year [1]. - The company anticipates a challenging second half of 2024, with revenues expected to decline by 16.5% to 29.34 billion yuan, driven by a decrease in sales volume and a slight increase in price per ton [1][2]. - The company is strategically simplifying its product lines, particularly in the high-end segment, to stabilize market prices and ensure long-term development [2]. Revenue and Profitability - For 2024H2, the company expects a revenue of 29.34 billion yuan, with a year-on-year decline of 16.5%, and a net profit of 5.72 billion yuan, down 22.9% [1]. - The gross margin improved slightly to 58.44%, up 0.26 percentage points year-on-year, attributed to the release of self-owned production capacity and a focus on high-margin products [3]. - Adjusted net profit margin decreased to 22.44%, down 0.92 percentage points, primarily due to increased management expenses related to depreciation and amortization [3]. Strategic Focus - The company is focusing on a dual-channel growth strategy, enhancing its presence in key markets while optimizing its organizational structure to support high-end product development [2][4]. - The company plans to adjust its product offerings to emphasize mid-range and high-end price points, aiming to capture changing consumer demands [4]. - The company has increased its number of distribution partners and retail outlets, indicating a commitment to expanding its market reach [2]. Financial Forecast - The revenue forecast for 2025-2027 has been adjusted downwards, with expected revenues of 73.28 billion yuan, 81.00 billion yuan, and 87.86 billion yuan respectively, reflecting the ongoing industry adjustment [4]. - The projected net profits for the same period are 15.25 billion yuan, 18.20 billion yuan, and 23.05 billion yuan, with corresponding price-to-earnings ratios of 14.9, 12.5, and 9.9 [4].

港股公司报告 | 公司点评 珍酒李渡（06979） 证券研究报告 24H2 着眼长线主动降速，25 年高质量增长可期 事件：公司发布 2024 年年报。2024 年公司收入/归母净利润/经调净利润 分别为 70.67/13.24/16.76 亿元（同比+0.5%/-43.1%/+3.3%），其中 2024H2 公司收入/归母净利润/经调净利润分别为 29.34/5.72/6.58 亿元（同比 -16.5%/-22.9%/-19.8%）。 24H2 主动去库保证渠道良性，高端聚焦主品结构阶段承压。2024H2 公司 实现营收 29.34 亿元（同比-16.46%），销量/吨价分别同比-16.79%/+0.40%。 | 投资评级 | | | --- | --- | | 行业 | 必需性消费/食物饮品 | | 6 个月评级 | 买入（维持评级） | | 当前价格 | 7.26 港元 | | 目标价格 | 港元 | 分品牌看，2024H2 珍酒/李渡/湘窖/开口笑营收分别为 17.77/6.38/3.50/1.13 亿元（同比-21.95%/+2.91%/-10.64%/-31.02%）。 分价格带看，2024H2 ...

Core Viewpoint - The financial report of Zhenjiu Lidu reveals a significant decline in net profit for 2024, indicating challenges in the current liquor industry cycle and highlighting issues with brand performance and market positioning [1][3][8]. Financial Performance - Zhenjiu Lidu reported an operating income of 7.07 billion yuan, a slight increase of 0.5% year-on-year, while the net profit attributable to shareholders plummeted by 43.1% to 1.324 billion yuan, primarily due to changes in the fair value of non-operating financial instruments [1][3]. - Adjusted net profit stood at 1.68 billion yuan, reflecting a year-on-year growth of 3.3% [1]. - The overall net profit margin decreased from 33.10% in 2023 to 18.73% in 2024 [3]. Brand Performance - The core brand, Zhenjiu, generated revenue of 4.48 billion yuan, down 2.3% year-on-year, and has seen a continuous decline in sales for four consecutive years, with sales dropping to 12,284 tons [3][5]. - The Lidu brand, however, achieved revenue growth of 1.313 billion yuan, an 18% increase, attributed to market expansion beyond Jiangxi [3][5]. - The other brands, Xiangjiao and Kaikouxiao, focused on the Hunan market, with revenues accounting for 11.4% and 4.8% respectively, and Kaikouxiao's revenue decreased by 12% due to a sluggish wedding market [3][5]. Product Segmentation - Revenue from high-end products accounted for approximately 24% of total revenue, with a decline of nearly 11% to 1.709 billion yuan; mid-range and below products generated about 2.36 billion yuan, with a minimal growth of 0.1% [5]. - The company has implemented various strategies to enhance its high-end offerings, including launching new premium products and hosting experiential events, but faces ongoing challenges in achieving higher market positioning [5]. Inventory and Operational Challenges - The inventory turnover days increased significantly to 854.95 days in Q4 2024 from 679.64 days at the end of Q3, indicating rising inventory pressure [7]. - Despite expressing confidence in future growth and aspirations to become a world-class brewing enterprise, the company faces numerous uncertainties and challenges in navigating the current adjustment period in the liquor industry [8].