King's Luck(SH:603369) Sou Hu Cai Jing·2025-09-03 12:52Core Viewpoint - The performance of Jiangsu Jinshiyuan (stock code: 603369.SH) in the first half of 2025 showed a significant downturn, marking the first decline in both revenue and net profit since 2021, primarily driven by a substantial drop in second-quarter performance [1][3]. Group 1: Financial Performance - The company reported a revenue of 6.95 billion yuan, a year-on-year decrease of 4.84%, and a net profit of 2.229 billion yuan, down 9.46% [3]. - In the second quarter, revenue and net profit fell sharply by 29.69% and 37.06%, respectively, attributed to the impact of the "ban on alcohol" policy and the traditional off-season [3]. - The revenue from high-end products, particularly the special A+ category, saw a decline of 7.37%, significantly affecting overall performance [1][3]. Group 2: Market Challenges - The company faced intense competition in its home market of Jiangsu, with local competitors like Yanghe and Anhui Kouzi gaining market share [1]. - The market share in core cities was pressured by both local and external brands, leading to a 6.07% decrease in revenue from the Jiangsu market [3]. - The growth rate of the company's revenue from outside Jiangsu slowed to 4.78%, a significant drop from 36.39% in the previous year [3]. Group 3: Inventory and Cash Flow - The company's contract liabilities decreased from 1.593 billion yuan at the end of 2024 to 600 million yuan, a decline of 62.35%, indicating reduced willingness of distributors to stock products [4]. - Inventory turnover days increased from 451.1 days to 549.8 days, highlighting issues with inventory buildup and sluggish sales [4]. - The net operating cash flow also declined year-on-year, reflecting challenges in cash recovery due to poor sales performance [4]. Group 4: Production and Future Outlook - Despite facing numerous challenges, the company has made efforts in capacity optimization, with stable growth in raw liquor production and an increase in the quality of its products [4]. - A new 20,000-ton clear elegant sauce workshop has been completed and is set to commence full production, although the success of this expansion plan remains uncertain amid weak terminal sales and inventory pressure [4].