Shede Spirits (SH:600702) SINOLINK SECURITIES·2025-08-23 15:21Investment Rating - The report maintains a "Buy" rating for the company [5] Core Views - The company reported a revenue of 2.7 billion yuan for the first half of 2025, a year-on-year decrease of 17.4%, and a net profit attributable to shareholders of 440 million yuan, down 25.0% year-on-year. However, the second quarter showed signs of recovery with a revenue of 1.13 billion yuan, a decrease of only 3.4% year-on-year, and a net profit of 100 million yuan, which is an increase of 139.5% year-on-year [2] - The revenue structure indicates that high-end liquor and ordinary liquor segments faced declines, while non-liquor business showed growth. The company is focusing on e-commerce channels and product innovation to drive growth [3] - The company is expected to see a revenue decline of 4.9% in 2025, followed by growth of 8.9% in 2026 and 14.5% in 2027. Net profit is projected to increase significantly in the coming years, with a forecasted growth of 121.2% in 2025 [5] Revenue Analysis - In the first half of 2025, the revenue from high-end liquor, ordinary liquor, and non-liquor businesses was 1.97 billion, 440 million, and 280 million yuan respectively, with year-on-year changes of -24.1%, +15.9%, and -0.7% [3] - The company added 253 new distributors while 331 exited, resulting in a net decrease of 78 distributors, indicating a focus on stabilizing existing relationships while nurturing smaller clients [3] Profitability Metrics - The net profit margin for Q2 2025 increased by 5.2 percentage points to 8.6%, with a gross margin of 60.6%. The company is expected to see an acceleration in cost optimization in the second half of 2025 [4] - The report indicates a significant recovery in profitability metrics, with the company focusing on cost reduction and efficiency improvements [4] Financial Forecast - The projected earnings per share (EPS) for 2025, 2026, and 2027 are 2.30, 2.77, and 3.55 yuan respectively, with corresponding price-to-earnings (P/E) ratios of 26.5, 22.0, and 17.1 [5] - The company is expected to recover from a significant drop in net profit in 2024, with a forecasted net profit of 765 million yuan in 2025, increasing to 1.18 billion yuan by 2027 [10]