Core Viewpoint - Shede Liquor Industry experienced a stock price increase of 5.14%, reaching 62.00 CNY per share, with a trading volume of 4.55 billion CNY and a turnover rate of 2.24%, resulting in a total market capitalization of 20.631 billion CNY [1] Group 1: Company Overview - Shede Liquor Industry Co., Ltd. is located in Tuo Pai Town, Shehong City, Sichuan Province, established on November 9, 1996, and listed on May 24, 1996 [1] - The company's main business involves the manufacturing and sales of liquor, with revenue composition as follows: liquor accounts for 89.52%, including mid-to-high-end liquor at 73.05%, ordinary liquor at 16.47%, glass bottles at 8.58%, and other supplementary products at 1.90% [1] Group 2: Fund Holdings - Longxin Fund has one fund heavily invested in Shede Liquor Industry, specifically Longxin Consumer Selected Quantitative Stock A (004805), which held 23,200 shares in the third quarter, representing 7.03% of the fund's net value, making it the sixth-largest holding [2] - The fund has a current scale of 7.595 million CNY and has experienced a loss of 6.9% this year, ranking 4207 out of 4216 in its category; over the past year, it has lost 7.35%, ranking 3873 out of 3889 [2] - The fund manager, Yuan Jie, has been in position for 206 days, with total assets under management of 671 million CNY, achieving a best fund return of 71.99% and a worst return of -4.9% during her tenure [2]

Investment Rating - The investment rating for the company is "Outperform the Market" [7][19] Core Views - The company continues to experience revenue and net profit adjustments, with a total revenue of 3.702 billion yuan for the first three quarters of 2025, down 17.0% year-on-year, and a net profit of 472 million yuan, down 29.4% year-on-year [1][4] - The decline in revenue is influenced by policy changes, but low-priced products and e-commerce channels are performing well, with e-commerce sales increasing by 71.4% year-on-year in Q3 2025 [2][4] - The company is expected to recover growth in the coming years as market conditions improve, with projected revenues of 4.619 billion yuan in 2025, down 13.8% year-on-year, but with a recovery of 10.3% in 2026 and 12.0% in 2027 [4][11] Financial Performance Summary - For Q3 2025, the company reported a gross margin of 62.1%, a decrease of 1.57 percentage points year-on-year, and a net profit margin decline of 3.7 percentage points [3][4] - The company’s operating cash flow showed a net outflow of 312 million yuan, indicating pressure on cash flow performance [3][4] - The projected earnings per share (EPS) for 2025 is 1.74 yuan, with a significant increase in net profit expected in subsequent years, reaching 7.79 billion yuan by 2027 [5][11]

Investment Rating - The investment rating for the company is "Outperform the Market" [7][19]. Core Views - The company continues to experience revenue and net profit adjustments, with a total revenue of 3.702 billion yuan for the first three quarters of 2025, down 17.0% year-on-year, and a net profit of 472 million yuan, down 29.4% year-on-year [1][4]. - The decline in revenue is influenced by policy changes, but low-priced products and e-commerce channels are performing well, with e-commerce sales increasing by 71.4% year-on-year in Q3 2025 [2][4]. - The company is expected to recover growth in the coming years as market conditions improve, with projected revenues of 4.619 billion yuan in 2025, down 13.8% year-on-year, but increasing by 10.3% and 12.0% in 2026 and 2027, respectively [4][11]. Financial Performance Summary - For Q3 2025, the company reported a gross margin of 62.1%, a decrease of 1.57 percentage points year-on-year, and a net profit margin decline of 3.7 percentage points [3][4]. - The company’s operating cash flow showed a net outflow of 312 million yuan, a decrease of 188 million yuan year-on-year, indicating pressure on cash flow [3][4]. - The projected earnings per share (EPS) for 2025 is 1.74 yuan, with a significant increase in net profit expected in subsequent years [5][11].

Core Insights - The liquor sector experienced a slight decline of 0.09% on October 30, with Huangtai Liquor leading the drop [1] - The Shanghai Composite Index closed at 3986.9, down 0.73%, while the Shenzhen Component Index closed at 13532.13, down 1.16% [1] Liquor Sector Performance - Notable gainers in the liquor sector included: - Macau Sina: Closed at 40.08, up 2.59% with a trading volume of 137,600 shares and a transaction value of 556 million [1] - ST Yanshi: Closed at 5.67, up 2.35% with a trading volume of 51,300 shares and a transaction value of 29.27 million [1] - Yanghe Distillery: Closed at 70.82, up 2.06% with a trading volume of 81,100 shares and a transaction value of 574 million [1] - Other companies like Kweichow Moutai and Wuliangye saw minor declines of 0.36% and 0.30% respectively [2] Capital Flow Analysis - The liquor sector saw a net outflow of 586 million from institutional investors, while retail investors contributed a net inflow of 65.5 million [2] - Major stocks with significant capital inflows included: - Yingjia Gongjiu: Net inflow of 52.03 million from institutional investors [3] - Luzhou Laojiao: Net inflow of 37.36 million from institutional investors [3] - Conversely, stocks like Yanghe Distillery and Kweichow Moutai experienced net outflows from both institutional and retail investors [3]

Investment Rating - The report maintains a "Recommendation" rating for the company with a target price of 78 yuan [1]. Core Views - The company reported a revenue of 3.7 billion yuan for the first three quarters of 2025, a decrease of 17.0% year-on-year, and a net profit of 470 million yuan, down 29.4% year-on-year. In Q3 alone, revenue was 1.0 billion yuan, down 15.9%, with a net profit of 29 million yuan, down 63.1% [1][7]. - The report indicates that the company is undergoing a process of clearing inventory and is expected to gradually stabilize in the coming year due to a low base effect. The company is focusing on maintaining prices and reducing inventory while promoting products aimed at younger consumers [1][7]. Financial Summary - Total revenue for 2024 is projected at 5.357 billion yuan, with a year-on-year decline of 24.3%. For 2025, revenue is expected to be 4.283 billion yuan, down 20.1%, and is forecasted to recover to 4.486 billion yuan in 2026, with a growth of 4.7% [3]. - The net profit for 2024 is estimated at 345 million yuan, reflecting a significant decline of 80.5% year-on-year. The profit is expected to recover to 454 million yuan in 2025, with a growth of 31.1%, and further to 559 million yuan in 2026, with a growth of 23.4% [3]. - The earnings per share (EPS) are projected to be 1.04 yuan for 2024, increasing to 1.36 yuan in 2025 and 1.68 yuan in 2026 [3][7]. Sales and Profitability - The company's gross margin for Q3 was 62.1%, a decrease of 1.6 percentage points year-on-year, primarily due to a slight shift in product mix. The net profit margin for Q3 was 2.9%, down 3.7 percentage points year-on-year [1][7]. - Sales from the mid-to-high-end liquor segment fell by 23.4% year-on-year in Q3, while the ordinary liquor segment saw an 18.0% increase, mainly driven by the T68 product line [1][7]. Cash Flow and Debt - The company reported a negative operating cash flow of 310 million yuan in Q3, compared to a negative 120 million yuan in the same period last year. The contract liabilities at the end of Q3 were 110 million yuan, a decrease of 40 million yuan from the end of Q2 [1][7].

Core Viewpoint - Shede Liquor Industry Co., Ltd. reported a stable performance in the first three quarters of 2025, with revenue of 3.702 billion yuan and a net profit of 472 million yuan, indicating effective strategies in a challenging market environment [2][3]. Financial Performance - The company achieved a gross margin increase of 1.49 percentage points to 62.09% in Q3, reflecting improved profitability through effective pricing and product structure optimization [3]. - Operating costs decreased by 8.81% year-on-year, and management expenses fell by 13.07%, showcasing ongoing efficiency improvements [3]. - Total assets grew to 12.558 billion yuan, indicating continued scale expansion [3]. Market Strategy - Shede Liquor is actively adjusting its strategies in response to market conditions, focusing on inventory reduction and price stabilization [3][4]. - The strategic flagship product "T68" saw a sales revenue increase of 16.46% year-on-year, contributing positively to overall performance [3]. Channel Optimization - The company has enhanced its e-commerce presence, achieving 450 million yuan in e-commerce sales, a 39.62% increase year-on-year, by leveraging traditional and emerging online sales channels [3][5]. Product Innovation - Shede Liquor is focusing on both high-end and low-alcohol products to capture diverse market segments, including the launch of a low-alcohol variant and innovative packaging strategies [5][6]. - The introduction of the "Shedai Zizai" low-alcohol product and the "Shedai Blind Box" reflects the company's commitment to innovation and appealing to younger consumers [6]. Brand Development - The company is enhancing its brand strength through diverse marketing strategies, including cultural marketing initiatives that resonate with consumers [7]. - Shede Liquor has integrated ESG principles into its business model, aiming for sustainable development and long-term growth [7]. Industry Outlook - The white liquor industry is expected to recover in the fourth quarter, supported by favorable policies and seasonal demand, with Shede Liquor positioned for improved performance [8].

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [5][14]. Core Insights - The company reported a revenue of 3.7 billion yuan for Q3 2025, a year-on-year decrease of 17.0%, and a net profit attributable to shareholders of 470 million yuan, down 29.4% year-on-year [2]. - The revenue for Q3 2025 was 1.0 billion yuan, reflecting a 15.9% decline year-on-year, with a net profit of 30 million yuan, a significant drop of 63.2% year-on-year [2]. - The revenue structure shows that high-end and ordinary liquor segments faced declines, while non-liquor products saw a growth of 16.5% year-on-year [3]. - The company added 352 new distributors and had a total of 2,554 distributors by the end of Q3 2025, indicating a strategic focus on expanding its distribution network [3]. Revenue and Profitability Analysis - The gross profit margin for Q3 2025 decreased by 1.6 percentage points to 62.1%, while the net profit margin fell by 3.7 percentage points to 2.9% [4]. - The company’s revenue is projected to decline by 13.5% in 2025, followed by growth of 10.7% in 2026 and 16.1% in 2027 [5]. - The earnings per share (EPS) are expected to be 1.42 yuan in 2025, increasing to 2.74 yuan by 2027 [5]. Financial Forecasts - The company’s revenue for 2025 is estimated at 4.635 billion yuan, with a net profit of 473 million yuan [10]. - The projected return on equity (ROE) is expected to improve from 6.7% in 2025 to 11.4% in 2027 [10]. - The price-to-earnings (P/E) ratio is forecasted to decrease from 41.8 in 2025 to 21.7 in 2027, indicating a potential increase in valuation attractiveness [10].

Core Insights - The company reported a revenue of 3.7 billion yuan for the first three quarters of 2025, a decrease of 17.0% year-on-year, and a net profit attributable to shareholders of 470 million yuan, down 29.4% year-on-year [1] - In Q3 alone, the company achieved a revenue of 1.0 billion yuan, a decline of 15.9%, and a net profit of 29 million yuan, down 63.1% year-on-year [1] - The revenue performance met expectations, while profit performance was slightly below prior expectations due to external demand shocks impacting profitability and cash flow [1] Financial Performance - Q3 gross margin was 62.1%, a decrease of 1.6 percentage points, primarily due to a slight shift in product structure [1] - The overall tax rate increased, with the operating tax rate at 18.4%, reflecting the impact of demand shocks and rigid expenses [1] - The company aims for gradual stabilization in the coming year based on a low base [1] Strategic Adjustments - The company is accelerating adjustments with a clear strategy, maintaining price stability for key products while reducing inventory [1] - There is a focus on promoting cultural and creative alcoholic beverages and enhancing marketing efforts for products like T68 [1]

Core Viewpoint - Shede Spirits (600702.SH) reported a decline in revenue and net profit for the first three quarters of 2025, indicating potential challenges in the company's financial performance [1] Financial Performance - The company achieved a revenue of 3.702 billion yuan for the first three quarters, representing a year-on-year decrease of 17% [1] - The net profit attributable to shareholders was 472 million yuan, down 29.43% year-on-year [1] - The net profit after deducting non-recurring items was 460 million yuan, reflecting a decline of 29.69% compared to the previous year [1] - Basic earnings per share stood at 1.4441 yuan [1]

Core Viewpoint - Shede Spirits (600702.SH) reported a decline in revenue and net profit for the first three quarters of 2025, indicating potential challenges in the company's financial performance [1] Financial Performance - The company achieved a revenue of 3.702 billion yuan for the first three quarters, representing a year-on-year decrease of 17% [1] - The net profit attributable to shareholders was 472 million yuan, down 29.43% year-on-year [1] - The non-recurring net profit stood at 460 million yuan, reflecting a decline of 29.69% compared to the previous year [1] - Basic earnings per share were reported at 1.4441 yuan [1]