JINHUI(SH:603919) Bank of China Securities·2025-09-01 08:28Investment Rating - The report assigns a rating of "Accumulate" to the company, adjusted from a previous "Buy" rating [1][3]. Core Insights - The company, Jinhui Liquor, demonstrated resilience in its operations with positive growth in revenue and net profit during the first half of 2025, despite industry pressures. The company reported a revenue of RMB 1.76 billion, a year-on-year increase of 0.3%, and a net profit attributable to shareholders of RMB 300 million, up 1.1% year-on-year [3][6]. Summary by Sections Financial Performance - In 2Q25, the company achieved revenue of RMB 650 million, a decline of 4.0% year-on-year, and a net profit of RMB 60 million, down 12.8% year-on-year. The overall revenue and net profit for the first half of 2025 were RMB 1.76 billion and RMB 300 million, respectively [6][8]. - The company's gross margin for 2Q25 was 63.7%, a decrease of 1.0 percentage points year-on-year, while the net profit margin was 9.9%, down 1.0 percentage points year-on-year [8]. Market Position and Strategy - Jinhui Liquor is the leading liquor brand in Gansu Province, focusing on optimizing its product structure and maintaining a healthy cash flow from channels. The company has seen an increase in the revenue share of products priced above RMB 300, which accounted for 21.8% of total revenue in 2Q25, up 3.3 percentage points year-on-year [6][8]. - The company has a total of 960 distributors, with an increase of 12 in the province and a decrease of 16 outside the province as of 1H25 [6]. Future Projections - The report projects revenues for 2025 to be RMB 3.12 billion, with a growth rate of 3.4%, and net profits to reach RMB 393 million, reflecting a growth rate of 1.4% [5][10]. - The estimated earnings per share (EPS) for 2025 is RMB 0.78, with a price-to-earnings (P/E) ratio of 28.5 times [5][10].