Shede Spirits (SH:600702) Sou Hu Cai Jing·2025-06-12 10:27Core Viewpoint - The company reported a significant decline in revenue and net profit for 2024, attributing the decrease to a drop in sales of high-priced products and increased costs, while also facing scrutiny over its rising debt levels and inventory growth [2][3][12]. Financial Performance - In 2024, the company achieved total revenue of 5.357 billion, a year-on-year decrease of 24.41%, and a net profit of 346 million, down 80.46% [3]. - The gross margin for alcoholic products was 70.93%, reflecting a decrease of 7.65 percentage points compared to the previous year [4][7]. Sales Structure and Pricing - The sales proportion of products priced above 200 yuan fell from 60.38% to 50.68%, negatively impacting overall gross margin [5]. - Average selling prices for most product categories decreased, with discounts of 3%-5% introduced to help distributors manage inventory [5][6]. Cost and Expenses - The unit cost of alcoholic products rose to 22.43 yuan per 500ml, an increase of 38.80% year-on-year, driven by rising material costs and labor expenses [7]. - Despite declining revenue, the company maintained spending on strategic initiatives, with cash inflows from sales dropping to 5.767 billion, a decrease of 1.599 billion [10][11]. Debt and Financing - The company's interest-bearing debt surged by 744.07% to 1.166 billion, constituting 74.95% of its cash reserves, significantly higher than peers in the industry [12]. - The increase in debt is attributed to ongoing investments in the old liquor strategy and expansion projects [12][13]. Inventory Management - The company's inventory value reached 5.219 billion, accounting for 70% of current assets, which is above the industry average [15]. - The growth in inventory is linked to the old liquor strategy, with the company asserting that inventory turnover remains normal and there is no backlog [17][19].