Shede Spirits (SH:600702) EBSCN·2024-08-23 00:06Investment Rating - The report maintains a "Buy" rating for the company [4] Core Views - The company reported a total revenue of 3.271 billion yuan for H1 2024, a year-on-year decrease of 7.28%, and a net profit attributable to the parent company of 591 million yuan, down 35.73% year-on-year [2] - In Q2 2024, total revenue was 1.165 billion yuan, a decline of 22.61% year-on-year, with a net profit of 41 million yuan, down 88.4% year-on-year [2] - The company is actively controlling volume and stabilizing prices, leading to a temporary decline in revenue [2] - The sales revenue for mid-to-high-end liquor and ordinary liquor in Q2 2024 was 876 million yuan and 146 million yuan, respectively, with year-on-year changes of -5.66% and -25.19% [2] - The company is focusing on enhancing its market presence in the banquet sector, anticipating that mass consumption will continue to support growth in the second half of the year [2] Summary by Sections Financial Performance - The company’s gross profit margin in Q2 2024 was 60.93%, a decrease of 10.95 percentage points year-on-year, primarily due to pressure on traditional products and an increase in lower-margin product sales [2] - The net profit margin for Q2 2024 was 3.48%, a significant drop of 19.74 percentage points year-on-year [2] - Cash flow from operating activities was negative 129 million yuan in Q2 2024, compared to positive 412 million yuan in Q2 2023 [2] Market Strategy - The company has adjusted its sales strategy to manage channel pressures, focusing on improving sales dynamics and controlling cash flow and delivery schedules [2] - The company aims to strengthen its market operations in Sichuan and enhance its banquet market strategy to capture market share [2] Earnings Forecast and Valuation - The net profit forecasts for 2024-2026 have been revised down to 1.26 billion yuan, 1.43 billion yuan, and 1.63 billion yuan, representing reductions of 35%, 39%, and 42% from previous estimates [2] - The current stock price corresponds to a P/E ratio of 12, 11, and 9 for the years 2024, 2025, and 2026, respectively [2]