Shede Spirits (SH:600702) Huafu Securities·2024-08-23 01:00Investment Rating - The investment rating for the company is "Buy" [3][9] Core Views - The company reported a revenue of 3.271 billion yuan for the first half of 2024, a year-on-year decrease of 7.28%, and a net profit attributable to shareholders of 591 million yuan, down 35.73% year-on-year. In Q2 2024, revenue was 1.165 billion yuan, down 22.75%, and net profit was 41 million yuan, down 88.29% year-on-year. The company has adopted a strategy of controlling volume and stabilizing prices to assist in channel destocking and relieve pressure [1][2] - The company’s mid-to-high-end and regular liquor segments achieved revenues of 2.601 billion yuan and 384 million yuan respectively in H1 2024, with year-on-year declines of 5.61% and 25.18%. In Q2 2024, these segments generated revenues of 876 million yuan and 146 million yuan, down 19.43% and 47.35% respectively. The company is focusing on banquet scenarios, with significant growth in the number of banquets for its key products [1][2] - The company’s revenue from external and internal markets in H1 2024 was 2.076 billion yuan and 910 million yuan, reflecting year-on-year declines of 11.16% and 2.46%. In Q2 2024, revenues from these markets were 655 million yuan and 267 million yuan, down 28.46% and 18.25% respectively. The company is increasingly focusing on high-occupancy base markets [1][2] Financial Performance - The company’s gross margin and net margin for Q2 2024 were 60.9% and 3.5%, down 10.9 and 19.7 percentage points year-on-year. The overall expense ratio increased by 14.1%, with sales expenses rising by 38% primarily due to increased employee compensation [2][6] - The company’s projected net profits for 2024, 2025, and 2026 are 1.237 billion yuan, 1.286 billion yuan, and 1.505 billion yuan respectively, with a maintained "Buy" rating despite short-term performance pressures [2][6]