Shanxi Xinghuacun Fen Wine Factory (SH:600809) HTSC·2025-10-31 08:48Investment Rating - The report maintains a "Buy" rating for the company [6][4]. Core Views - The company has demonstrated resilience in its operations, achieving steady growth despite external pressures, with a focus on national expansion and product diversification [1][2][4]. - The first phase of the company's revitalization plan has been successfully completed, and the second phase is underway, with a strong foundation laid for future growth [1][4]. Summary by Sections Financial Performance - For the first three quarters of 2025, total revenue reached 32.92 billion RMB, with a year-on-year growth of 5.0%. The net profit attributable to the parent company was 11.40 billion RMB, reflecting a slight increase of 0.5% [1]. - In Q3 2025, total revenue was 8.96 billion RMB, with a year-on-year increase of 4.1%, while net profit decreased by 1.4% [1][2]. Product and Market Strategy - The company reported revenue from its main product, Fenjiu, at 32.17 billion RMB for Q1-Q3 2025, up 5.5% year-on-year, while other liquor categories saw a decline of 15.9% [2]. - The company is focusing on a four-pronged strategy for product development, optimizing its distribution channels, and expanding its market presence nationally [1][2]. Regional Performance - Revenue from provincial markets decreased by 7.5% to 11.01 billion RMB, while revenue from outside the province increased by 12.7% to 21.81 billion RMB in the first three quarters of 2025 [2]. - The company’s brand strength is highlighted by its growth in key regions such as the Yangtze River Delta and the Pearl River Delta [2]. Cost and Profitability - The gross margin for the first three quarters of 2025 was 76.1%, a slight increase of 0.1 percentage points year-on-year [3]. - The net profit margin for Q3 2025 was 32.4%, down 1.8 percentage points compared to the previous year [3]. Future Outlook - The company projects earnings per share (EPS) of 10.15 RMB for 2025, with a target price set at 239.80 RMB based on a 22x price-to-earnings ratio for 2026 [4][10].