Yanghe(SZ:002304) Xin Lang Ke Ji·2025-08-20 10:42Core Viewpoint - Yanghe Co., Ltd. reported a significant decline in revenue and net profit for the first half of the year, marking its worst performance since 2009, with revenue down 35.32% to 14.796 billion yuan and net profit down 45.34% to 4.344 billion yuan [1][2] Revenue and Profit Decline - The decline in revenue accelerated in 2024, with high-end liquor revenue decreasing by 36.52% and ordinary liquor revenue decreasing by 27.24% [2] - Revenue from outside the province dropped by 42.68%, while revenue from within the province also saw a decline [2] - Production volume decreased by 51.63% and sales volume decreased by 32.35% in the first half of the year [2] - Operating cash flow net amount fell sharply from 2.043 billion yuan to 616 million yuan, with inventory reaching a high of 19.075 billion yuan and inventory turnover rate dropping to a historical low of 0.19 [2] Expense Management - The sales expense ratio increased from 11.42% to 14.52%, and management expense ratio rose from 4.32% to 6.34%, leading to a net profit decline that outpaced revenue decline [2][3] - In 2024, Yanghe's sales expense ratio was 19%, significantly higher than competitors like Wuliangye and Shanxi Fenjiu, which were around 10% [3] - The cash collection ratio has been declining since 2022, indicating slower cash recovery from sales [3] Channel and Inventory Issues - Yanghe has been actively adjusting its inventory management since 2024, including halting supply to online platforms and implementing strict inventory controls [4] - The company has faced issues with "stock pressure," where distributors are required to maintain growth despite poor sales conditions [4] - The proportion of contract liabilities to revenue has been significantly higher than industry peers, indicating potential liquidity issues [4] Leadership Changes and Future Outlook - The company is undergoing management changes, with a new chairman appointed in July 2024, raising questions about the ability to return to growth [7] - The previous chairman acknowledged that Yanghe has lagged in this development cycle, indicating a need for strategic adjustments moving forward [7]