Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 20.14 CNY per share, based on a valuation of 84 billion CNY [4][7][12]. Core Insights - The company is expected to experience a decline in revenue and gross margin for 2025-2026, with revised earnings per share projections of 0.29, 0.50, and 0.57 CNY for 2025, 2026, and 2027 respectively [4][12]. - The report highlights the growing potential of instant retail channels for the company, driven by a younger consumer demographic and changing consumption habits [11]. - The company has a strong advantage in the instant retail space due to its extensive store network and partnerships with leading liquor brands, ensuring product authenticity [11]. Financial Performance Summary - Revenue (in million CNY) is projected to decline from 10,121 in 2023 to 9,713 in 2025, before recovering to 10,865 by 2027, reflecting a growth rate of -6.5% in 2024 and 2.6% in 2025 [6]. - Operating profit is expected to drop significantly from 256 million CNY in 2023 to 87 million CNY in 2024, with a recovery to 132 million CNY in 2025 [6]. - Net profit attributable to the parent company is forecasted to decrease from 235 million CNY in 2023 to 44 million CNY in 2024, before rebounding to 120 million CNY in 2025 [6]. - The company's gross margin is projected to decline from 10.7% in 2023 to 9.0% in 2024, with a slight recovery to 9.8% by 2027 [6]. Market Position and Strategy - The company has a wide store network with 2,000 stores and over 30,000 service points across major cities in China, positioning it well for growth in the instant retail market [11]. - The report notes that major liquor brands are increasingly entering the instant retail space, indicating a competitive landscape that the company is well-prepared to navigate [11]. - The shift in consumer behavior towards instant purchasing, particularly among younger demographics, presents a significant opportunity for the company to enhance its market share [11].
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