Shede Spirits (SH:600702) Xin Lang Cai Jing·2025-08-24 06:28Core Viewpoint - The company reported a decline in revenue and net profit for the first half of 2025, but showed signs of recovery in the second quarter, with a focus on innovation and brand enhancement to drive future growth [1][4]. Financial Performance - For 25H1, total revenue, net profit attributable to the parent, and net profit excluding non-recurring items were 2.7 billion, 440 million, and 440 million respectively, representing year-on-year declines of 17.4%, 25.0%, and 24.1% [1]. - In 25Q2, total revenue, net profit attributable to the parent, and net profit excluding non-recurring items were 1.13 billion, 100 million, and 100 million respectively, with year-on-year changes of -3.4%, +139.5%, and +194.2% [1]. Product and Market Strategy - The company is focusing on four core products and innovating cultural products targeted at younger demographics to create differentiation [1]. - The strategy emphasizes channel development post-inventory reduction in 2024, leveraging platform push and consumer pull to enhance sales and brand influence [1]. - The company aims to find growth in existing markets by implementing a strategy of "downward channel, upward brand, and comprehensive C-end focus" [1]. Regional Performance - In 25H1, revenue from mid-to-high-end liquor was 1.97 billion, while ordinary liquor revenue was 440 million, with year-on-year changes of -24% and +16% respectively [2]. - By region, revenue from within the province was 780 million, and from outside the province was 1.64 billion, with year-on-year changes of -14% and -21% [2]. - The company has 2,585 distributors as of the end of 25Q2, a decrease of 78 from the end of 24 [2]. Cost and Profitability - The gross profit margin for 25H1 decreased by 3.7 percentage points to 65.7%, primarily due to product mix changes [3]. - The selling expense ratio increased by 1.1 percentage points to 21.2% in 25H1, attributed to higher marketing investments [3]. - The net profit margin for 25H1 was 16.4%, reflecting a year-on-year decrease of 1.7 percentage points [3]. Future Outlook - The company maintains a long-term perspective, anticipating a recovery in business demand to improve performance [4]. - Revenue forecasts for 2025-2027 have been slightly adjusted downwards to 4.69 billion, 4.90 billion, and 5.21 billion respectively, with year-on-year changes of -12.5%, +4.5%, and +6.4% [4]. - The earnings per share (EPS) estimates for 2025-2027 have been slightly increased to 1.47, 1.57, and 1.71 respectively, reflecting a positive outlook [4].