King's Luck(SH:603369) Haitong Securities International·2025-10-31 12:49Investment Rating - The report maintains an "Outperform" rating for Jiangsu King's Luck [2][9] Core Insights - The company reported a total revenue of RMB 8.88 billion for Q1 to Q3 2025, a decrease of 10.7% year-on-year, with a net profit attributable to shareholders of RMB 2.55 billion, down 17.4% year-on-year [3][11] - Q3 alone saw total operating revenue of RMB 1.93 billion, down 26.8% year-on-year, and a net profit of RMB 320 million, down 48.7% year-on-year [11][12] - The report indicates that the baijiu industry is currently in a bottoming phase, with profit compression from destocking being unavoidable, but the company's strong provincial market position is expected to support a rebound in performance [14] Financial Performance Summary - Revenue projections for 2025-2027 are estimated at RMB 10.28 billion, RMB 11.00 billion, and RMB 11.87 billion respectively, with net profits of RMB 2.69 billion, RMB 2.89 billion, and RMB 3.12 billion [6][14] - The diluted EPS for the same period is projected to be RMB 2.16, RMB 2.31, and RMB 2.50 [6][14] - The gross profit margin for Q3 2025 was reported at 75.0%, down 0.6 percentage points year-on-year, while the net profit margin decreased by 7.1 percentage points to 16.6% [13][12] Product and Market Analysis - In Q3 2025, revenue from high-end products (Special A+ tier) fell by 38.0%, while mid-tier products showed resilience with a decline of only 1.1% [4][12] - The company's revenue from provincial markets decreased by 29.8% year-on-year, while extra-provincial revenue declined by 13.8%, indicating better performance in extra-provincial markets [4][12] - Direct sales revenue grew by 47.6% year-on-year, contrasting with a 30.3% decline in wholesale agency revenue [4][12]