Kouzijiao(SH:603589) EBSCN·2025-11-01 07:48Investment Rating - The report maintains a "Buy" rating for the company [6]. Core Views - The company experienced significant revenue decline in Q3 2025, with total revenue of 6.43 billion yuan, down 46.23% year-on-year, and net profit of 0.27 billion yuan, down 92.55% year-on-year [1][2]. - The report highlights that the high-end liquor segment faced the most pressure, with sales revenue dropping by 49.35% in Q3 2025 [2]. - The company's gross margin decreased to 62.66%, down 9.25 percentage points year-on-year, indicating pressure on profitability due to declining high-end liquor sales [3]. - The report projects a downward revision of net profit forecasts for 2025 and 2026 to 0.945 billion yuan and 1.002 billion yuan, respectively, reflecting a significant reduction of 43.77% and 43.68% from previous estimates [4]. Summary by Sections Financial Performance - For the first three quarters of 2025, the company reported total revenue of 31.74 billion yuan, a decline of 27.24% year-on-year, and a net profit of 7.42 billion yuan, down 43.39% year-on-year [1]. - The Q3 2025 sales revenue breakdown shows high-end liquor at 5.77 billion yuan (down 49.35%), mid-range liquor at 0.09 billion yuan (down 28.51%), and low-end liquor at 0.46 billion yuan (up 117.28%) [2]. Profitability and Costs - The Q3 2025 sales gross margin was 62.66%, reflecting a significant decline due to the drop in high-end liquor sales and an increase in low-end liquor sales [3]. - The report notes an increase in tax and additional items as a percentage of revenue to 19.04%, up 2.72 percentage points year-on-year, and a rise in selling expenses to 24.61%, up 12.23 percentage points year-on-year [3]. Forecasts and Valuation - The report revises the net profit forecast for 2025 to 0.945 billion yuan, with EPS estimates of 1.58 yuan, and for 2026 to 1.002 billion yuan, with EPS of 1.68 yuan [4]. - The current stock price corresponds to a P/E ratio of 20 for 2025, 19 for 2026, and 18 for 2027 [4].