Yanghe(SZ:002304) Minsheng Securities·2025-08-20 07:16Investment Rating - The report maintains a "Recommended" rating for the company, with a target price of 73.58 CNY, corresponding to a P/E ratio of 27, 25, and 22 for the years 2025, 2026, and 2027 respectively [6][4]. Core Views - The company is experiencing a significant decline in revenue and profit, with a 35.32% year-on-year decrease in revenue to 14.796 billion CNY and a 45.34% drop in net profit to 4.344 billion CNY for the first half of 2025 [1]. - The company is focusing on inventory reduction and price stabilization, with a 32.35% decrease in sales volume but a 4.59% increase in price per ton for its liquor products [2]. - The company is increasing its marketing expenses, leading to short-term pressure on profitability, with a net profit margin decrease of 5.38 percentage points to 29.36% [3]. Summary by Sections Financial Performance - For the first half of 2025, the company reported a revenue of 14.796 billion CNY, a decrease of 35.32% year-on-year, and a net profit of 4.344 billion CNY, down 45.34% [1]. - The second quarter of 2025 saw a revenue of 3.729 billion CNY, a decline of 43.67%, and a net profit of 707 million CNY, down 62.66% [1]. Sales and Market Dynamics - The company sold 78,200 tons of liquor in the first half of 2025, a decrease of 32.35%, while the price per ton increased to 189,200 CNY [2]. - Revenue from mid-to-high-end liquor products was 12.672 billion CNY, down 36.52%, while ordinary liquor products generated 1.840 billion CNY, down 27.24% [2]. - The company is adjusting its distribution network, with an increase of 11 distributors in the domestic market but a decrease of 268 in the provincial market [2]. Cost and Profitability - The gross margin for the first half of 2025 was 75.02%, a decrease of 0.33 percentage points year-on-year, while the net profit margin was 29.36%, down 5.38 percentage points [3]. - The company increased its sales expense ratio to 14.52%, up 3.10 percentage points, and management expense ratio to 5.85%, up 1.73 percentage points [3]. Future Outlook - The company aims to stabilize its operations and expand its market presence while waiting for demand recovery, with projected net profits of 4.140 billion CNY, 4.508 billion CNY, and 5.152 billion CNY for 2025, 2026, and 2027 respectively [4][5].