Shede Spirits (SH:600702) KAIYUAN SECURITIES·2024-08-23 08:33Investment Rating - The investment rating for the company is "Outperform" (Maintain) as of August 22, 2024 [1]. Core Views - The company is positioned for long-term sustainable development and is actively adjusting inventory levels to respect market conditions, which is reflected in the maintained "Outperform" rating [1]. Financial Performance Summary - In H1 2024, the company achieved revenue of 3.27 billion yuan, a year-on-year decrease of 7.3%. The net profit attributable to shareholders was 590 million yuan, down 35.8% [1]. - In Q2 2024, revenue was 1.17 billion yuan, a year-on-year decline of 22.7%, with a net profit of 40 million yuan, also down significantly [1]. - The company has adjusted its profit forecasts for 2024-2026, expecting net profits of 1.29 billion yuan, 1.26 billion yuan, and 1.35 billion yuan respectively, reflecting declines of 27.1%, 2.1%, and growth of 6.8% [1]. Revenue Breakdown - In Q2 2024, revenue from mid-to-high-end liquor and ordinary liquor was 880 million yuan and 150 million yuan, respectively, representing year-on-year declines of 19.4% and 47.3% [3]. - The decline in mid-to-high-end liquor was attributed to a significant drop in business demand, while the ordinary liquor segment faced challenges due to the clearance of customized products [3]. Inventory and Prepayments - As of the end of Q2 2024, the company's contract liabilities stood at 162 million yuan, a decrease of 68.12% year-on-year, indicating a low level of prepayments due to inventory digestion and price maintenance efforts [4]. Profitability Metrics - The gross margin in Q2 2024 was 60.93%, down 11.21 percentage points year-on-year, primarily due to a decrease in the proportion of mid-to-high-end products [5]. - The net profit margin fell by 19.73 percentage points to 3.64% in Q2 2024, reflecting a significant decline in profitability [5]. Financial Projections - The company forecasts revenues of 6.375 billion yuan, 6.044 billion yuan, and 6.142 billion yuan for 2024, 2025, and 2026, respectively, with corresponding year-on-year changes of -10.0%, -5.2%, and +1.6% [6]. - The projected earnings per share (EPS) for 2024, 2025, and 2026 are 3.88 yuan, 3.79 yuan, and 4.05 yuan, respectively [6].