SCSF(SH:600779) Orient Securities·2025-03-30 02:23Investment Rating - The investment rating for the company is "Buy" (maintained) with a target price of 66.66 CNY, based on a current stock price of 50.85 CNY [1]. Core Views - The report indicates that the company is expected to experience a revenue growth of 5% and a net profit growth of 6% in 2024, reflecting a resilient performance during industry downturns [8][35]. - The company is actively reforming its product and market strategies under the new management, aiming to enhance market penetration and brand positioning [28][34]. - The valuation of the company is considered to have significant upside potential, with a reasonable valuation level set at 22 times the price-to-earnings ratio for 2025, indicating a favorable investment opportunity [5][54]. Summary by Sections 1. Industry Indicators and Trends - Early indicators show signs of recovery in the liquor industry, suggesting it may be nearing a cyclical bottom, supported by improving real estate transactions and rising machinery sales [8][12]. - The price indicators for premium liquor are approaching cyclical lows, indicating limited downside potential for prices [25]. 2. Company Performance and Strategy - The company has effectively managed inventory levels, leading to stable performance during industry downturns, with proactive measures taken to reduce stock levels since 2020 [35][36]. - The new management is implementing a dual-brand strategy, focusing on both mid-range and high-end markets, which is expected to enhance brand recognition and market share [28][34]. 3. Financial Projections - The company’s revenue and profit forecasts for 2024-2026 have been adjusted, with expected earnings per share of 2.76 CNY, 3.03 CNY, and 3.42 CNY respectively [5][6]. - The projected financial metrics indicate a steady growth trajectory, with revenue expected to reach 5,683 million CNY in 2025, reflecting an 8.9% year-on-year increase [6]. 4. Market Dynamics - The report highlights that the core consumption scenarios for mid-range liquor are showing signs of stabilization, with slight improvements in restaurant revenues and consumer confidence [42][46]. - The company is expected to benefit from a potential economic recovery, which could lead to increased demand for its products [49].