Yanghe(SZ:002304) Sou Hu Cai Jing·2025-11-09 04:17Core Viewpoint - Jiangsu Yanghe Brewery Co., Ltd. has experienced significant revenue and profit declines, marking the lowest levels since 2012, indicating severe challenges in the white liquor industry [6][8][10]. Financial Performance - In the first three quarters of 2025, Yanghe's revenue dropped by over 34%, a significant decline compared to previous years, with only a slight better performance than peers like Shui Jing Fang and Jiu Gui Jiu [6][10]. - The net profit for the first three quarters of 2025 fell by 53.7%, reflecting a more severe downturn than revenue, reaching the lowest level since 2012 [8][10]. - Revenue decline began in Q4 2023 and has continued for six consecutive quarters, with many quarters experiencing declines exceeding 40% [10][13]. Profitability and Cost Structure - The gross profit margin has decreased significantly, with the main business profit margin dropping from 41% in 2022 to below 30% in 2025, driven by rising operating costs and taxes [17][19]. - The company has faced challenges with inventory turnover, with over 1000 days in Q3 2025, indicating potential issues with unsold stock [23]. Cash Flow and Investment - Despite fluctuations in cash flow, Yanghe has not faced severe cash outflows like some smaller competitors, maintaining a relatively stable financial position [21]. - The company has been investing heavily in fixed assets, which may not be beneficial in the current market environment [21]. Market Position and Strategy - Yanghe's market presence is strong, with a significant share in the white liquor sector, but it faces increasing competition and market pressure [5][19]. - The company has maintained a cautious approach to sales strategies, focusing on cash transactions to mitigate risks associated with receivables [25].