SCSF(SH:600779) Xin Lang Cai Jing·2025-09-02 01:36Core Viewpoint - Water Jiufang reported a significant decline in both revenue and net profit for the first half of 2025, indicating a challenging market environment and potential issues with its distribution channels [1][2][4]. Financial Performance - For the first half of 2025, Water Jiufang achieved revenue of 1.498 billion yuan, a year-on-year decrease of 12.84%, and a net profit of 105 million yuan, down 56.52% [1][2]. - In Q1 2025, the company recorded revenue of 959 million yuan, a 2.74% increase year-on-year, while Q2 revenue plummeted to 539 million yuan, a 31% decline [2][3]. - The wholesale sales revenue was 924 million yuan, reflecting a 34.35% decrease, and the number of distributors decreased by 24.29%, with 17 fewer distributors compared to the previous year [3][4]. Market Conditions - The overall white liquor industry is undergoing a deep adjustment phase, with weak consumer demand particularly affecting traditional consumption scenarios like business banquets [2][4]. - High inventory levels were reported, exacerbated by lower-than-expected consumption during the Spring Festival [2][4]. Distribution Challenges - Water Jiufang's distribution model relies heavily on large distributors, which poses risks if key distributors decide to exit, as seen with the rumored non-renewal of a major distributor in Henan [2][3]. - The company has faced significant anxiety among its distributors due to potential market pressures from inventory clearance and loss of confidence in the distribution network [3][4]. Management and Strategy - The first half of 2025 marks the first performance report under the leadership of General Manager Hu Tingzhou, who took office in August 2024 [1][5]. - Water Jiufang has experienced frequent leadership changes, with six different general managers in the past ten years, which may have contributed to a lack of strategic continuity [5][6]. - The company is attempting to regain distributor confidence and address pricing issues by temporarily halting sales of its core product, aiming to reduce inventory levels [4][6].