Shede Spirits (SH:600702) Nan Fang Du Shi Bao·2025-09-23 07:35Core Viewpoint - Shede Liquor Industry is facing short-term pressure on performance due to rising production costs and a competitive market environment, but is implementing strategies to stabilize prices and reduce inventory, which may lead to long-term growth opportunities [1][2][7]. Group 1: Business Performance - In 2024, Shede Liquor's revenue is expected to decline due to the overall adjustment in the liquor industry and increased competition, particularly in the mid-to-high-end product segment [2][7]. - The company reported a significant increase in first-quarter performance, with revenue reaching 1.576 billion yuan, a 75.68% increase quarter-on-quarter, and net profit surpassing the entire previous year's figure at 346.1 million yuan [7][8]. - The company's gross profit margin has decreased year-on-year due to rising material and labor costs, despite efforts to maintain stable pricing and inventory levels [2][4]. Group 2: Inventory and Production - Shede Liquor confirmed that there is no inventory backlog, and the inventory levels are within a reasonable range, with no significant changes in the aging structure of products [3][4]. - The company is expanding production capacity, with an expected annual increase of 60,000 tons of raw liquor and 342,500 tons of raw liquor storage capacity, which will enhance its long-term production capabilities [5][6]. - The company is focusing on a strategy of "strong sales, inventory reduction, and price stability," which includes offering sales discounts of 3%-5% on various products to promote inventory turnover [2][4]. Group 3: Financial Health - The company's cash flow situation has improved, with cash reserves reaching 1.58 billion yuan at the end of the first quarter, indicating a positive trend in financial health [4][7]. - Shede Liquor's total monetary funds decreased to 1.543 billion yuan by the end of 2024, primarily due to reduced sales returns and increased dividends, which is considered a normal phenomenon in the industry [4][5]. - The company is expected to manage its financial obligations effectively, with cash reserves sufficient to support approximately two months of operational expenses [4][5]. Group 4: Strategic Outlook - The long-term strategy of focusing on aged liquor production is expected to yield higher market and brand value over time, despite short-term debt pressures from expansion projects [4][6]. - The overall liquor industry is projected to maintain stable development, with increasing market concentration, which may benefit Shede Liquor due to its advantages in brand, quality, and distribution channels [8]. - The company is optimistic about future growth, anticipating that the benefits of its aged liquor strategy will become more pronounced by 2025 [8].