Core Viewpoint - The A-share market showed a strong performance on the last trading day of June, with notable gains in the military, pharmaceutical, and photovoltaic sectors. The pharmaceutical commercial sector saw significant late-session gains, while the liquor sector experienced a sudden surge in stock prices. Additionally, computing hardware stocks reached historical highs, indicating a positive market sentiment overall [1][2]. Group 1: Pharmaceutical Sector - The pharmaceutical commercial sector experienced a late surge, with stocks like Huaren Health rising from a near 5% drop to a nearly 7% increase, closing up 4.61% [1]. - Recent reports indicate that major liquor companies such as Wuliangye and Luzhou Laojiao are seeing good growth in banquet market scale and opening rates, with strategies focusing on lower-end and innovative products [6]. Group 2: Liquor Sector - The liquor sector saw a significant rally at 13:11, with stocks like Jiugui Liquor, Shede Liquor, and Shui Jing Fang rising by 6.88%, 3.48%, and 2.92% respectively by the end of trading [4]. - Analysts suggest that the overall valuation of the liquor sector is low, with frequent stock buybacks and increased dividend payouts expected to attract more capital inflow [6]. Group 3: Computing Hardware Sector - Computing hardware stocks were notably active, with companies like Jingwang Electronics and Xinyi Sheng reaching historical highs. Jingwang Electronics hit a limit-up, while Xinyi Sheng closed up 3.12% at 127.02 yuan per share, with a market capitalization of 126.05 billion yuan [8][10]. - The demand for optical modules is expected to exceed supply by a factor of two in 2024, driven by strong growth in the AI sector and overseas markets [11]. Group 4: Photovoltaic Sector - The photovoltaic sector showed strength, particularly in the back-contact (BC) battery segment, with stocks like Saiwu Technology hitting the limit-up and GCL-Poly Energy rising over 6% [12][13]. - The acceleration of new technologies such as BC and solid-state batteries is anticipated, with production capacity expected to exceed 100GW by the end of 2025 [15].

Group 1 - The liquor stocks experienced an afternoon rally, with specific companies showing significant gains [1] - Jiu Gui Jiu (000799) rose over 5%, indicating strong market interest [1] - She De Jiu Ye (600702) increased by more than 2%, reflecting positive investor sentiment [1] Group 2 - Other companies such as Huang Tai Jiu Ye (000995), Shui Jing Fang (600779), and Kou Zi Jiao (603589) also saw upward movement, suggesting a broader trend in the liquor industry [1]

Core Viewpoint - The article emphasizes the resilience and growth potential of leading consumer companies like Shui Jing Fang amidst global economic uncertainties, highlighting their strategic positioning as safe investment options [1][2]. Group 1: Market Context - The global capital market is facing multiple challenges, including geopolitical tensions, energy price fluctuations, supply chain restructuring, and monetary policy adjustments, leading investors to seek companies with predictable growth [2][5]. - In the first quarter of 2025, China's retail sales of consumer goods increased by 4.9% year-on-year, with high-end consumption showing a notable recovery trend [2]. Group 2: Company Performance - Shui Jing Fang reported a revenue of 959 million yuan in Q1 2025, a year-on-year increase of 2.74%, and a net profit of 190 million yuan, up 2.15%, continuing the growth trend from 2024 [2][8]. - The company maintains a healthy inventory level, which supports dealer confidence and promotes positive channel dynamics [8]. Group 3: Strategic Initiatives - Shui Jing Fang has adopted a differentiated strategy with its "Shui Jing Fang + First Fang" brand strategy, focusing on the mid-to-high-end market (300-800 yuan) and the high-end market (800 yuan and above) [5][7]. - The company is enhancing its operational capabilities through refined marketing strategies and channel management, categorizing markets into fortress, pioneer, and potential segments, and implementing tailored marketing strategies [7]. Group 4: Industry Trends - The Chinese liquor industry is entering a phase of stock market maturity, with consumer behavior becoming more nuanced, leading to a focus on emotional connections with brands [4][5]. - The market is witnessing a concentration of market share among leading companies with strong brand, channel, and management advantages, indicating a shift towards premiumization in the industry [8]. Group 5: Future Outlook - Shui Jing Fang's dynamic price-to-earnings ratio is currently around 15, which is considered low historically, suggesting potential for upward valuation as the company’s performance remains robust [8]. - The company is expected to achieve significant growth by focusing on product upgrades and channel refinement, positioning itself favorably for the recovery of consumer demand [8].

Core Viewpoint - In 2024, Shuijingfang continues to implement its ESG sustainable development strategy themed "Shuijingfang · Respecting the Future," focusing on high-quality products and services to enhance people's quality of life [2] Group 1: Product Quality and Safety - In 2024, Shuijingfang achieved third-party certification audits through HACCP and ISO9001 [3] - All packaging material suppliers have signed food safety requirements and standards, obtaining ISO9001 certification [3] - The company conducted 80 training sessions on quality management and food safety, covering 1,535 employees with a total training duration of 2,172 hours [3] Group 2: Responsible Marketing and Consumer Experience - Shuijingfang established and strictly adheres to the "Shuijingfang Marketing Code," requiring partners to comply as well [3] - The company ensures a quick response to customer inquiries and complaints within 5 minutes, achieving 100% timely resolution of feedback [3] - In collaboration with the Chengdu Tourism Association, Shuijingfang launched the first wine and tourism integration route in Chengdu to enhance brand value and create new growth points [3] Group 3: Employee Satisfaction and Training - The company conducts an annual "Your Voice" survey with a 99% participation rate from employees in 2024 [3] - Shuijingfang provided 24,036.45 hours of targeted training for 100% of full-time employees, with an average training duration of 11.93 hours per employee [3] Group 4: Supplier Management - Shuijingfang has a comprehensive supplier screening system, including background checks and on-site evaluations [4] - The company implemented an annual performance management plan for suppliers, focusing on quality, delivery, technology, and compliance [4] - In 2024, 89 key suppliers were identified, with 59 completing the SEDEX self-assessment [4] Group 5: Corporate Social Responsibility - In 2024, Shuijingfang donated a total of 1.88 million yuan to support six major public welfare areas [5] - The company has over 1,000 volunteers, contributing a total of 759 hours of service [5] - The "Friendly Neighbor Plan" was upgraded to promote community harmony through factory open days and diverse community activities [5] Group 6: Environmental Sustainability - Shuijingfang set a carbon reduction target to reduce Scope 1 and Scope 2 greenhouse gas emissions by at least 60,000 tons of CO2 equivalent from 2024 to 2030 [6] - The company aims to improve water efficiency by 30% by 2030 compared to 2020 [6] - In 2024, the cooling water in the brewing workshop of the Qionglai factory achieved 100% recycling, with a total recycled volume of 821,060 tons [6] Group 7: Governance and Compliance - The board organized six training sessions on independent director system reform, registration system interpretation, and information disclosure in 2024 [6] - Shuijingfang established a risk management system centered on the "three lines of defense" [6] - The company reviewed nine policies, including the "Business Conduct Code" and "Guidelines for Preventing Conflicts of Interest," to ensure compliance management aligns with business development [6] Group 8: Intellectual Property Protection - Shuijingfang formed a specialized brand protection team to conduct nationwide anti-counterfeiting efforts [7] - The company developed a self-research anti-counterfeiting digital coding system, significantly enhancing product anti-counterfeiting capabilities [7] - In 2024, Shuijingfang provided 222 instances of authenticity verification services for consumers [7]

Investment Rating - The report maintains an "Increase" rating for the food and beverage industry, indicating a positive outlook for growth in the sector [4]. Core Insights - The report emphasizes the importance of growth in the beer sector during the peak season and highlights the ongoing transformation within the liquor industry, particularly in the Chinese baijiu market [1][2]. - It identifies three main investment themes in the baijiu sector: leading brands, high-certainty regional brands, and flexible stocks benefiting from recovery and increased risk appetite [1]. - The report notes that the beer production in China reached 3.584 million kiloliters in May, showing a year-on-year increase of 1.3%, indicating stable growth as the peak season approaches [3]. Summary by Sections Baijiu Sector - The report discusses the cyclical adjustments in the baijiu industry, with companies like Wuliangye and Shui Jing Fang acknowledging the current deep adjustment phase and focusing on brand and product enhancement [2]. - It highlights Wuliangye's commitment to shareholder returns, promising a dividend payout ratio of no less than 70% from 2024 to 2026, with a total dividend amount of at least 20 billion [2]. Beer and Beverage Sector - The report mentions the leadership change at Zhujiang Beer and the completion of a significant milestone by Bai Run's Laizhou distillery, indicating a strong competitive position in the whiskey market [3]. - It also notes the upcoming listing of IFBH Limited on the Hong Kong Stock Exchange, which is expected to strengthen its market position in the coconut water segment, holding a 33.9% market share in mainland China [6]. Consumer Goods - The report highlights the significant growth in e-commerce sales during the 618 shopping festival, with a 10% year-on-year increase in GMV, indicating a robust recovery in consumer spending [7]. - It points out the competitive landscape in the snack food sector, with Three Squirrels leading sales across major platforms, while also noting the challenges for new entrants in the market [7].

General Provisions - The company aims to protect the legal rights of the company, shareholders, employees, and creditors, and to regulate its organization and behavior according to relevant laws [1][3] - The company was established as a joint-stock company in accordance with national regulations and has undergone name changes from "Sichuan Pharmaceutical Co., Ltd." to "Sichuan Quanjing Co., Ltd." and finally to "Sichuan Shuijingfang Co., Ltd." [1][2] - The company was approved for its initial public offering of 26.6 million shares in 1996 and is listed on the Shanghai Stock Exchange [1][3] Company Structure - The registered capital of the company is RMB 487,503,198 [2] - The company is a permanent joint-stock company, and the general manager serves as the legal representative [2][3] - The company’s assets are divided into equal shares, and shareholders are liable for the company’s debts only to the extent of their subscribed shares [2][3] Business Objectives and Scope - The company's business objective is to establish a dynamic operating system, improve technology and management levels, and develop its core business centered on Chinese liquor while also engaging in diversified operations [5] - The main business scope includes food production and sales, with additional activities in biobased materials technology research and development, manufacturing, and sales [5] Share Issuance and Management - The company issues shares in the form of stocks, adhering to principles of openness, fairness, and justice [6][7] - The total number of shares issued by the company is 487,503,198, all of which are ordinary shares [6][7] - The company can increase its capital through various methods, including issuing shares to unspecified or specific objects, distributing bonus shares, or converting reserves into capital [7][8] Shareholder Rights and Responsibilities - Shareholders have rights to dividends, voting, supervision of company operations, and access to company documents [10][11] - Shareholders must comply with laws and the company’s articles of association, and they cannot withdraw their capital except as legally permitted [14][39] - Shareholders holding more than 5% of voting shares must report any pledges of their shares to the company [14] Shareholder Meetings - The company holds annual and temporary shareholder meetings, with the annual meeting required to be held within six months after the end of the previous fiscal year [47] - Shareholder meetings are the company's decision-making body, with powers including electing directors, approving profit distribution plans, and making decisions on major company changes [45][46] - The company must provide legal opinions on the legality of the meeting procedures and the qualifications of attendees [50] Voting and Resolutions - Resolutions can be ordinary or special, with ordinary resolutions requiring a simple majority and special resolutions requiring a two-thirds majority [79][80] - Shareholders can exercise their voting rights based on the number of shares they hold, with each share granting one vote [82] - The company must ensure that the voting process is transparent and that results are disclosed promptly [30][83]

Group 1 - The core opinion of the legal opinion letter is that the procedures for convening and holding the 2024 annual general meeting of Sichuan Shui Jing Fang Co., Ltd. comply with relevant laws and regulations [1][7] - The meeting was held on June 18, 2025, at the designated location, and the actual time and place matched the notice provided [3][4] - A total of 976 shareholders and their proxies attended the meeting, representing 317,967,677 shares, which is 65.6264% of the total shares with voting rights [4][5] Group 2 - The voting process combined on-site and online voting, with the online voting period from June 18, 2025, 9:15 to 9:25 and 9:30 to the end of the meeting [3][4] - The resolutions presented at the meeting were approved with a high percentage of votes in favor, with the majority of proposals receiving over 99% approval [5][7] - The legal opinion concludes that the resolutions passed during the meeting are legal and valid, adhering to the requirements of the Company Law and the company's articles of association [7][8]

Group 1 - The company is restructuring its product matrix with a dual-brand strategy to accurately cover diverse consumer groups, focusing on "Shuijingfang" for mid-to-high-end and "Diyifang" for high-end markets [1] - The company plans to cultivate a second star product priced between 300-800 RMB, following the success of its existing product, which is expected to drive future performance growth [1] - The company is also launching a mid-range sub-brand "Tianhao Chen" to meet consumer demand for high cost-performance products [1] Group 2 - The company is enhancing channel construction and optimizing the value chain distribution mechanism to promote high-quality business development [2] - It will implement refined channel management and classify markets into three categories: fortress, vanguard, and potential, tailoring strategies to each market's characteristics [2] - The company aims to strengthen partnerships with distributors through initiatives like the "Gold Customer Plan" and "Doubling Plan" to stimulate distributor potential [2] Group 3 - The company anticipates revenue growth driven by changes in consumption scenarios, with a focus on emotional connections with consumers [3] - Revenue projections for 2025-2027 are 5.665 billion, 6.370 billion, and 7.427 billion RMB, with corresponding net profits of 1.479 billion, 1.697 billion, and 2.017 billion RMB [3] - The company maintains a strong recommendation rating based on its commitment to brand value and sustainable development [3]

Core Viewpoint - In 2024, the company continues to implement its ESG sustainable development strategy themed "Water Well · Respect the Future," aiming to enhance the quality of life through high-quality products and services [3]. Group 1: Product Quality and Safety - The company has achieved third-party certifications for HACCP and ISO9001 in 2024 [4]. - All packaging suppliers have signed food safety requirements and standards, and have obtained ISO9001 certification [5]. - The company conducted 80 training sessions on quality management and food safety, covering 1,535 employees with a total training duration of 2,172 hours [5]. Group 2: Responsible Marketing and Consumer Experience - The company adheres to a strict marketing code and requires partners to comply as well [5]. - Customer inquiries and complaints are responded to within 5 minutes, with 100% of issues addressed promptly [5]. - A new wine tourism route was launched in collaboration with the Chengdu Tourism Association to enhance brand value and create new growth points [5]. Group 3: Employee Satisfaction and Training - The company conducted an annual "Your Voice" survey with a 99% participation rate in 2024 [6]. - A total of 24,036.45 hours of targeted training were provided, covering 100% of full-time employees, with an average training duration of 11.93 hours per employee [7]. Group 4: Supplier Management - A comprehensive supplier screening system is in place, including background checks and on-site evaluations [8]. - An annual performance management plan for suppliers was established, focusing on quality, delivery, technology, and compliance [8]. - In 2024, 89 key suppliers were identified, with 59 completing the SEDEX self-assessment [8]. Group 5: Corporate Social Responsibility - The company donated a total of 1.88 million yuan to support six major public welfare areas in 2024 [9]. - Over 1,000 volunteers contributed a total of 759 hours of service [10]. - The "Friendly Neighbor Program" was upgraded to promote community harmony through factory open days and diverse community activities [10]. Group 6: Industry Standards and Environmental Management - The company collaborated with the Sichuan China Baijiu Golden Triangle Liquor Industry Association to release management guidelines for the use of group standards [11]. - It actively participated in the formulation of production technical specifications for Sichuan liquor [11]. - The company conducted a comprehensive assessment of its carbon emissions and set a target to reduce scope 1 and 2 emissions by at least 60,000 tons of CO2 equivalent from 2024 to 2030 [12]. Group 7: Water Resource and Packaging Management - A water risk assessment is regularly conducted, with a goal to improve water efficiency by 30% by 2030 compared to 2020 [13]. - The company achieved 100% recycling of cooling water in its production workshop, amounting to 821,060 tons [14]. - Efforts to reduce plastic use include optimizing packaging to save nearly 70 tons of ABS plastic annually [15]. Group 8: Corporate Governance and Compliance - The board of directors participated in training related to independent director reforms and information disclosure [16]. - A risk management system based on a "three lines of defense" approach was established, ensuring compliance management aligns with business development [16]. - A specialized brand protection team was formed to enhance product anti-counterfeiting capabilities [17].

Investment Rating - The report maintains a "Strong Buy" rating for the company [1][7][3] Core Views - The management team is stable, and a performance culture is enhancing employee execution capabilities. The company emphasizes a self-driven approach during external fluctuations, viewing them as opportunities for growth [7] - The North China market is performing exceptionally well, with a significant increase in the number of distribution stores. The company plans to expand its market share through key projects and a robust distribution strategy [7] - Marketing strategies focus on emotional connections with consumers, with plans to introduce low-alcohol products and enhance new retail channels [7] - The company is committed to strict inventory control and cautious, sustained investment in brand building and channel expansion [7] - The projected EPS for 2025-2027 is 2.87, 3.02, and 3.21, respectively, with a corresponding PE ratio of 14x for 2025 [7] Financial Data and Valuation - Total revenue is projected to grow from 4,953 million in 2023 to 5,810 million in 2027, with a CAGR of approximately 4% [2][15] - Operating profit is expected to increase from 1,698 million in 2023 to 2,120 million in 2027, reflecting a steady growth trend [2][15] - Net profit attributable to the parent company is forecasted to rise from 1,269 million in 2023 to 1,563 million in 2027, with a consistent growth rate [2][15] - The company’s current share price is 41.02 yuan, with a total market capitalization of 20 billion yuan [3][3] Key Financial Ratios - The projected ROE is expected to decline from 32.3% in 2023 to 20.9% in 2027, indicating a gradual decrease in return on equity [16] - The asset-liability ratio is projected to decrease from 47.8% in 2023 to 34.3% in 2027, suggesting improved financial stability [16] - The net profit margin is expected to improve from 25.6% in 2023 to 26.9% in 2027, indicating enhanced profitability [16]