Core Insights - The company, BaiRun Co., Ltd. (002568), held a mid-year performance briefing on September 19, 2025, focusing on its product innovation and market strategies [1] Group 1: Product Development - BaiRun Co. is continuously enhancing its "358" product matrix to stabilize category growth through multi-dimensional strategies [1] - The company has launched several new flavors and products, including Qingmei Longjing, Chun Jian White Peach, Sunshine Rose Grape, and Le Orange Oolong, which have been well-received by consumers [1] - The new jelly wine products sold out quickly in their first online release, indicating strong market demand [1] Group 2: Health and Innovation - BaiRun Co. is actively introducing various zero-sugar new products in its Strong and Refreshing series, promoting a lighter consumption experience with zero sugar and zero purine [1] - The company is committed to continuous development in flavor innovation, product innovation, and health-oriented offerings [1] Group 3: Business Overview - BaiRun Co.'s main business segments include the ready-to-drink cocktail business and the flavor and fragrance business [1] - The ready-to-drink cocktail segment primarily focuses on the research, production, and sales of the "RIO" brand cocktails [1]

Core Viewpoint - The stock of BaiRun Co., Ltd. has experienced fluctuations, with a current price of 25.44 CNY per share, reflecting an 8.20% decline year-to-date and a 1.24% drop over the last five trading days [1] Company Overview - BaiRun Co., Ltd. was established on June 19, 1997, and listed on March 25, 2011. The company is located in Shanghai and specializes in the research, production, and sales of flavor and fragrance products, as well as pre-mixed cocktails [1] - The main revenue composition of the company includes 87.14% from alcoholic products, 11.34% from edible flavors, and 1.52% from other sources [1] Financial Performance - For the first half of 2025, BaiRun Co., Ltd. reported a revenue of 1.489 billion CNY, a year-on-year decrease of 8.56%, and a net profit attributable to shareholders of 389 million CNY, down 3.32% compared to the previous year [2] - The company has distributed a total of 2.673 billion CNY in dividends since its A-share listing, with 833 million CNY distributed over the last three years [3] Shareholder Information - As of June 30, 2025, the number of shareholders for BaiRun Co., Ltd. increased by 15.89% to 34,500, while the average circulating shares per person decreased by 13.14% to 20,936 shares [2] - Notable institutional holdings include Xingquan Helun Mixed A, which is the seventh largest shareholder with 12.41 million shares, and the Wine ETF, which is the tenth largest shareholder with 11.00 million shares, having increased its holdings by 1.34 million shares [3] Market Activity - On September 19, 2023, BaiRun Co., Ltd. saw a net inflow of main funds amounting to 5.2069 million CNY, with significant buying activity from large orders [1]

Investment Rating - The report provides a positive investment rating for the low-alcohol and beverage sectors, recommending specific companies based on their performance and market positioning [2]. Core Insights - The report emphasizes the structural recovery in the consumer goods sector, highlighting the importance of channel dynamics and product innovation in driving growth [2][25]. - It identifies key players in the beer segment, such as Yanjing Beer and Zhujiang Beer, which are expected to outperform due to their strong regional presence and operational efficiency [2][11]. - The report also notes the challenges faced by the seasoning and food supply sectors, particularly due to weak downstream demand, but suggests potential for recovery as the restaurant industry stabilizes [2][26]. Summary by Sections Beer Sector - The beer sector experienced a revenue of 41.73 billion yuan in the first half of 2025, with a year-on-year growth of 2.8% [7]. - Major companies like Qingdao Beer and China Resources Beer showed mixed performance, with Qingdao Beer achieving a revenue increase of 1.9% [11][12]. - The report highlights the impact of channel structure on revenue performance, with companies like Yanjing and Zhujiang benefiting from a higher proportion of non-immediate sales channels [11][12]. Yellow Wine Sector - The yellow wine sector reported a revenue of 1.93 billion yuan in the first half of 2025, reflecting a year-on-year growth of 3.4% [26]. - Kuaijishan, a leading player, achieved a double-digit growth rate of 11% in the same period, driven by its high-end and youth-oriented strategies [26][27]. - The report indicates a trend of market share concentration among leading companies, with Kuaijishan and Guyue Longshan capturing a larger portion of the market [31]. Seasoning and Food Supply Sector - The seasoning and food supply sector faced revenue pressure due to weak restaurant demand, but companies that successfully launched new products or expanded channels showed resilience [2][26]. - The report suggests that a recovery in restaurant demand could lead to increased supply chain needs, benefiting leading companies in the sector [2][26]. Beverage Sector - The beverage sector is highlighted for its high growth potential, particularly for companies like Dongpeng Beverage, which is expanding its national presence [2]. - The report recommends focusing on companies that are effectively navigating the competitive landscape and capitalizing on emerging consumer trends [2][26].

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The report indicates that the retail sales growth rate in August 2025 has slowed down, primarily due to the diminishing effects of the "old-for-new" policy and a gradual recovery in consumer demand. However, with economic stimulus policies being implemented, the macroeconomic environment is expected to improve in the medium to long term, leading to an increase in household income and consumer willingness, which will benefit the food and beverage sector [4] - The liquor industry is approaching the peak demand season around the Mid-Autumn Festival and National Day, showing signs of improvement in demand. The fundamentals of the liquor market are expected to stabilize and trend upwards as consumption scenarios recover. The current bottoming out presents long-term investment value [4] - The report recommends focusing on new channels, new products, and new markets to identify new consumption targets that align with industry development trends. Specific recommended stocks include Weilian Meishi, Yanjinpuzi, Ximai Food, Dongpeng Beverage, Youfu Food, Wancheng Group, and Bairun Co., Ltd. [4] Summary by Sections Industry Trends - The food and beverage sector is experiencing a retail sales growth rate of 3.4% year-on-year in August 2025, with a month-on-month decline of 0.3 percentage points [5] - The growth rates for food, beverages, and tobacco and alcohol categories in August 2025 are 5.8%, 2.8%, and -2.3% respectively, indicating a month-on-month decline in the tobacco and alcohol category due to high base effects and lack of consumption scenarios [5][6] Subsector Observations - The liquor industry is currently in a bottom recovery phase, with sales under pressure but showing signs of improvement due to the upcoming festive season. The fundamentals are gradually stabilizing [7] - Ximai Food is accelerating its health business by launching new products in the health food segment, focusing on traditional Chinese medicine ingredients and weight loss products, which are expected to become significant growth drivers for the company [7]

Core Viewpoint - Liu Xiaodong, the controlling shareholder of Bairun Co., has transferred 6.01% of his shares to Liu Jianguo for 1.47 billion yuan, marking his first significant reduction since 2019 amid declining sales in the pre-mixed cocktail segment and the nascent whiskey business [1][2][4]. Group 1: Share Transfer Details - Liu Xiaodong transferred 63 million shares, representing 6.01% of the total share capital, to Liu Jianguo at a price of 23.337 yuan per share, which is a 7.54% discount to the closing price of 25.24 yuan on September 10 [1][2]. - Following the transfer, Liu Xiaodong retains a 34.58% stake in Bairun Co., while Liu Jianguo becomes a significant shareholder with 6.01% [1][2]. - Liu Jianguo's acquisition is characterized as a long-term financial investment, with no intention to participate in company management or appoint board members [2]. Group 2: Business Performance and Challenges - Bairun Co. has experienced a continuous decline in its main business, with a 6.61% revenue drop in 2024 and an 8.56% decline in the first half of the year [4][5]. - The revenue from pre-mixed cocktails, including sparkling water, was 2.677 billion yuan in 2024, down 7.18% year-on-year, with sales volume decreasing by 8.81% [4][5]. - The company faces significant challenges in sales channels, primarily relying on offline sales, which have been impacted by reduced foot traffic in supermarkets [5]. Group 3: Whiskey Business Potential - Bairun Co. is expanding its whiskey production capacity, having raised funds for whiskey aging projects, with an expected increase of 33,800 kiloliters in whiskey raw material capacity [6][7]. - The company plans to launch two whiskey products in November 2024, with additional products scheduled for release in 2025, indicating a potential shift in focus to whiskey as a second growth curve [7][8]. - The domestic whiskey market is highly competitive, with foreign brands dominating and a growing number of local companies entering the market [7][8].

Core Viewpoint - The report from Tianfeng Securities indicates that Bairun Co., Ltd. is experiencing a decline in revenue and net profit for Q2 2025, primarily due to the adjustment period of its pre-mixed cocktails, although whisky contributions remain positive [1] Financial Performance - For Q2 2025, Bairun's operating revenue, net profit attributable to the parent, and net profit excluding non-recurring gains and losses are projected to be 752 million, 208 million, and 178 million yuan respectively, reflecting year-on-year declines of 8.98%, 10.85%, and 22.61% [1] Product Development - The company is continuously improving its "358" product matrix, having launched jelly wine in June with positive sales feedback, and is set to introduce a light enjoyment series of 12-degree pre-mixed cocktails in August [1] Future Outlook - Despite slight pressure on terminal demand, the profit forecast has been adjusted downwards, with expected net profits for 2025 and 2026 revised to 770 million and 870 million yuan respectively, and a new forecast for 2027 set at 990 million yuan [1] - The rating for Bairun Co., Ltd. remains "Buy" [1]

Group 1 - The core point of the news is the significant share transfer transaction involving Bairun Co., a leading pre-mixed cocktail company in China, where the actual controller Liu Xiaodong sold 63 million shares (6.01% of total shares) for a total price of 1.47 billion yuan to Liu Jianguo, the owner of Pentium Electric [2] - Following the transaction, Liu Xiaodong's shareholding decreased from 40.59% to 34.58%, while Liu Jianguo became a significant shareholder with over 5% ownership [2] - The share transfer price was set at 23.337 yuan per share, which is a 10% discount from the closing price the day before the agreement [4] Group 2 - Liu Jianguo's investment has already seen a paper profit of over 192 million yuan within a day, as Bairun Co.'s stock price rose by 4.52% to 26.38 yuan per share on September 11 [4] - Liu Jianguo has committed not to reduce his holdings in the acquired shares for twelve months post-transfer and stated that this investment is a long-term financial investment without involvement in daily management [4] - Bairun Co. has been facing performance pressure, with a reported revenue of 1.489 billion yuan in the first half of 2025, a year-on-year decline of 8.56%, and a net profit of 389 million yuan, down 3.32% year-on-year [5] Group 3 - The sales volume of Bairun Co.'s core product, RIO pre-mixed cocktails, has been declining, with a total sales drop of 3.13 million boxes in 2024 and an additional decrease of 2.18 million boxes in the first half of 2025 [5] - The offline channel, which is the main sales avenue, saw a revenue decline of 9.63% year-on-year, contributing significantly to the overall performance downturn [5]

Summary of Key Points from Conference Call Records Industry Overview Baijiu Industry - The baijiu sector has reached a bottom in fundamentals, with valuations at low levels and market expectations recovering. Demand-side pressures are dissipating, and seasonal catalysts are expected to boost interest in brands like Luzhou Laojiao and Zhenjiu Shede for short-term opportunities, while Moutai, Fenjiu, and Gujing Gongjiu are recommended for long-term investment [1][2][4] Beverage and Snack Industry - The beverage sector is favorable for leading companies such as Nongfu Spring and Dongpeng Beverage, while the snack sector shows good alignment between valuation and growth potential. Key products to watch for Q4 catalysts include Weijia and Yanjinpuzi, with Yili identified as a bottom-value recovery company [1][5] Whisky Industry - In 2024, whisky imports are expected to decline by approximately 40%, with high-aged whisky's share also decreasing. Instant consumption channels now account for over 30% of sales, with dining and home consumption being the primary scenarios [3][13] Beer Industry - Both Yanjing Beer and Zhujiang Beer have seen their valuations drop to attractive levels, with Yanjing at 23-24 times earnings and Zhujiang at 21 times, both reflecting 2025 valuation levels. These companies are noted for their growth potential driven by flagship products [19] Company-Specific Insights Zhenjiu Lid - Zhenjiu Lid has launched an equity payment plan to bind the interests of alliance merchants, with the first quarter's alliance contributing approximately 320 million yuan in revenue. The acupuncture business is projected to account for 5% of the company's total revenue in 2024 [6][8][7] Baijun Co., Ltd. - Baijun's major shareholder transferred 6% of shares to Homa's Liu Jianbo, which is expected to empower Baijun in business expansion and overseas market development. The shareholding structure remains stable, providing opportunities for deeper collaboration [12] Restaurant Chain Industry - The restaurant chain sector has shown signs of recovery since Q2 2025, with stable performance from leading companies like Lihua Bao and Baba Foods. The frozen food leader Anjins has also shown significant improvement in revenue [10][11] Zhujiang Beer - Zhujiang Beer is focusing on expanding its market share through its flagship product, Pure Draft 97, while also launching new products to maintain competitiveness. The company is developing its "15th Five-Year Plan" for future growth [15][17][18] H&H International Holdings - H&H International expects high single-digit revenue growth for the year, with EBITDA margins around 15%. The health supplement business is performing well, while the milk powder segment anticipates low double-digit growth [20] Jianhe Health - Jianhe Health's fundamentals are improving, driven by new consumer customer acquisition in China and profitability improvements in its overseas subsidiaries. The company is expected to see good performance in Q3 due to new orders [21][22] Additional Insights - The baijiu sector is currently viewed as a mid-to-long-term value investment opportunity, with market expectations warming up as demand-side pressures ease [2] - The innovative model of the Wan Shang Alliance is expected to have a significant impact on the company's financials, with a focus on long-term development and binding interests with distributors [9]

Investment Rating - The investment rating for the company is "Buy" with a target price not specified [6][17] Core Views - The company is expected to show potential elasticity in performance in H2 2025, despite a decline in revenue and net profit in Q2 2025 [1][4] - The company is continuously improving its product matrix, launching new products such as jelly wine and a light cocktail series, which are expected to contribute positively to sales [4] Financial Performance Summary - In Q2 2025, the company reported revenue of 752 million yuan, a year-on-year decrease of 8.98%, and a net profit of 208 million yuan, down 10.85% [1] - The company's liquor products, edible flavors, and other businesses generated revenues of 1.297 billion yuan, 169 million yuan, and 23 million yuan respectively in H1 2025, with liquor accounting for 87.14% of total revenue [2] - The offline and digital retail channels achieved revenues of 1.311 billion yuan and 155 million yuan respectively in H1 2025, with a year-on-year decline of 9.63% and 0.57% [3] - The gross margin and net margin for Q2 2025 were 71.00% and 27.63%, showing slight year-on-year declines [4] - Operating cash flow for Q2 2025 was 155 million yuan, reflecting a significant year-on-year increase of 592.30% [4] Financial Forecast Summary - The company is projected to achieve revenues of 3.263 billion yuan in 2023, decreasing to 3.048 billion yuan in 2024, and then gradually increasing to 3.897 billion yuan by 2027 [5][11] - The net profit attributable to the parent company is expected to decline from 809 million yuan in 2023 to 719 million yuan in 2024, before recovering to 990 million yuan by 2027 [5][11] - The earnings per share (EPS) is forecasted to be 0.77 yuan in 2023, decreasing to 0.69 yuan in 2024, and then increasing to 0.95 yuan by 2027 [5][11]

Core Viewpoint - The announcement from BaiRun Co., the parent company of RIO, indicates a significant share transfer involving its controlling shareholder Liu Xiaodong, who plans to transfer 63 million shares, representing 6.01% of the total share capital, to Liu Jianguo for a total consideration of 1.47 billion yuan, at a discounted price of 23.337 yuan per share [1][2][3]. Shareholder Changes - Before the transaction, Liu Xiaodong held 425,588,502 shares, accounting for 40.59% of the total share capital. After the transfer, he will hold approximately 362,588,502 shares, which is 34.97% of the total, remaining the largest shareholder and actual controller of the company [2][3]. - Liu Jianguo will acquire 63 million shares, making him a shareholder with over 5% ownership, specifically 6.01% of the total share capital [3]. Purpose of Share Transfer - The company stated that the purpose of this share transfer is to enrich the shareholder structure and introduce resources that promote the company's development. However, Liu Jianguo's professional background does not relate to the beverage or fast-moving consumer goods industry, suggesting this acquisition may be more of a financial investment [3][4]. Company Performance - BaiRun Co. remains the leading brand in the pre-mixed cocktail sector, with RIO being the top brand. However, the company has faced challenges, including a decline in revenue and profit. In the first half of the year, the company reported revenue of 1.489 billion yuan, a year-on-year decrease of 8.56%, marking the third consecutive year of revenue decline. The net profit attributable to shareholders was 389 million yuan, down 3.32% year-on-year [5][7]. - The company has reduced its sales expenses to 300 million yuan, a decrease of 24% year-on-year, indicating a shift in marketing strategy. The sales volume and production of alcoholic products have also seen double-digit declines, with inventory turnover days increasing from 313.6 days to 464.6 days [7]. - The company is facing significant challenges in the North China and Southwest markets, with revenues in these regions declining by 23% and 21.4% year-on-year, respectively [7].