Shede Spirits (SH:600702) Sou Hu Cai Jing·2025-09-04 10:54Core Viewpoint - Shede Liquor's financial report for the first half of the year indicates efforts to seek transformation amid challenges, with a notable recovery in the second quarter despite an overall decline in performance [1][3]. Financial Performance - In the first half of the year, Shede Liquor achieved revenue of 2.701 billion yuan, a decrease of 17.01% compared to the same period last year [1]. - Net profit reached 443.3 million yuan, down 24.98% year-on-year [1]. - In the second quarter, revenue was 1.125 billion yuan, with a reduced decline of 3.44% year-on-year, and net profit surged to 97.17 million yuan, an increase of 139.48% [1]. Market Reaction - The capital market reacted positively to the financial results, with Shede Liquor's stock price rising significantly, reaching 67 yuan per share and a total market value of 22.3 billion yuan as of August 25 [3]. - Over the past 11 trading days, the stock price increased by 30.1%, outperforming the liquor sector's 12.77% and the broader market's 6.41% [3]. Strategic Adjustments - Shede Liquor has shifted its strategy from a focus on high-end products to increasing its presence in the ordinary liquor market, with the revenue share of mid-to-high-end liquor decreasing from 79.54% to 73.05% [3]. - Revenue from ordinary liquor increased by 15.86%, raising its revenue share to 16.47% [3]. Industry Challenges - The competitive landscape in the liquor industry is characterized by a "pyramid" structure, with top brands like Moutai and Wuliangye dominating the high-end market, leaving Shede Liquor in a fiercely competitive lower segment [4]. - The company faces challenges with distributor inventory pressures and a reduction in the number of distributors, with 78 fewer distributors and a 3.01% decline in contract liabilities [4]. - Inventory turnover days for Shede Liquor exceed the industry average, indicating ongoing inventory challenges [4]. New Channel Development - To address these challenges, Shede Liquor is focusing on e-commerce and live streaming, achieving sales of 336 million yuan through e-commerce channels, a year-on-year increase of 31.38% [4]. - Despite the growth in online sales, traditional channels remain crucial for liquor consumption, particularly for events and group purchases [4]. Future Outlook - The recovery in the second quarter reflects the effectiveness of Shede Liquor's strategic adjustments, primarily through cost reduction measures [5]. - The sustainability of this recovery remains uncertain, and the company needs to continue exploring suitable development paths while maintaining stable performance [5].