WLY(SZ:000858) Guotou Securities·2025-09-04 08:16Investment Rating - The report assigns a "Buy-A" investment rating to the company with a 6-month target price of 147.63 CNY [4][7]. Core Insights - The company reported a revenue of 52.771 billion CNY for H1 2025, reflecting a year-on-year growth of 4.19%. The net profit attributable to shareholders was 19.492 billion CNY, up 2.28% year-on-year [1]. - In Q2 2025, the company achieved a revenue of 15.831 billion CNY, showing a minimal growth of 0.10%, while the net profit decreased by 7.58% to 4.632 billion CNY [1]. - The company continues to demonstrate resilience in a challenging market environment, with a slight decline in gross margin attributed to lower margins from other alcoholic products [3]. Revenue and Profit Analysis - For H1 2025, the revenue breakdown by product shows that liquor sales accounted for 49.120 billion CNY, with a growth of 4.3%. Other segments like plastic products and printing also contributed, but with varying growth rates [2]. - The company’s liquor sales are primarily driven by its flagship product, with revenue from Wuliangye reaching 40.998 billion CNY, a growth of 4.6% [2]. - The sales channels indicate that direct sales grew by 8.6% to 21.195 billion CNY, while distributor sales grew by 1.2% to 27.925 billion CNY [2]. Cost and Profitability Metrics - The gross margin for Q2 2025 was reported at 74.69%, a slight decrease of 0.32 percentage points year-on-year, while the net margin fell by 2.43 percentage points to 29.26% [3]. - The company has increased its sales and management expenses to adapt to industry changes, leading to a rise in expense ratios [3]. Future Projections - Revenue growth is projected to be 1.2% in 2025, 3.7% in 2026, and 5.5% in 2027. Net profit growth is expected to decline by 1.4% in 2025, followed by recoveries of 3.9% and 6.2% in the subsequent years [4]. - The report anticipates that the company will maintain a strong market position due to its brand influence and established distribution network [3].