Core Viewpoint - Goldman Sachs has given a "buy" rating to Zhenjiu Lidu (06979), with a target price of HKD 8.08 based on a projected P/E ratio of 14.5 times for 2026, applying a 25% discount relative to the average A-share P/E ratio [1] Recent Developments - In March, management noted an increase in orders from distributors due to replenishment demand post-Spring Festival, but no significant retail demand recovery has been observed year-to-date. The sales base during the Spring Festival was also high. The management aims for flat year-on-year revenue and expects a modest improvement in net profit margin [2] - For the first half of 2025, management anticipates sales not to be lower than the second half of 2024, with potential improvements in the second half of 2025. Sales in Guizhou are expected to grow by double digits in 2024, while Henan remains stable, Hunan progresses well, and Shandong lags behind [2] Retail Demand and Operational Dynamics - Since June 2024, demand has remained weak, and management believes distributor confidence in the industry is low. The company plans to avoid putting excessive pressure on channels and will strictly control channel rebates to maintain stable wholesale prices. The company has also suspended consumer red envelope activities since last year and will gradually explore the banquet market, potentially leveraging the Zhen10 product [3] 2025 Outlook - Management expects a quarter-on-quarter improvement in the first half of 2025, with sales targets remaining flat year-on-year. The high-end liquor segment aims for double-digit sales growth, with the Lidu brand continuing to drive growth. If local government debt issues improve, there could be greater growth opportunities. The employee stock ownership plan for 2025 is yet to be determined [4] Production Capacity and Capital Expenditure - By the end of 2025, the company's base liquor inventory is projected to reach approximately 120,000 to 130,000 tons, with a potential sales value of RMB 40-50 billion based on the average selling price of approximately RMB 365,000 per ton in 2024. Management expects capital expenditures to gradually decrease starting in 2027 [5]
高盛：予珍酒李渡(06979)“买入”评级 预计下半年市场复苏更明显