Shede Spirits (SH:600702) Huaxin Securities·2024-04-27 23:30Investment Rating - The report maintains a "Buy" rating for the company [2][3] Core Insights - The company's revenue growth met expectations, but profits faced slight pressure due to various factors affecting gross margin [2][3] - The company reported total revenue of 2.105 billion yuan for Q1 2024, a year-on-year increase of 4.18%, while net profit attributable to shareholders was 550 million yuan, a decrease of 3.37% year-on-year [2][3] - The report highlights a strategic adjustment in product offerings, with good performance in mid-to-high-end and high-line products, while the sub-high-end segment faced pressure [2][3] Financial Performance Summary - Q1 2024 gross margin was 74.16%, down 4.22 percentage points year-on-year, primarily due to impacts from Tianma Glass and Yelang Ancient [2][3] - Q1 2024 net profit margin was 26.09%, a decrease of 2.07 percentage points year-on-year, with sales and management expense ratios showing a decline of 2.93 and 0.20 percentage points respectively [2][3] - Sales receipts for Q1 2024 were 1.917 billion yuan, down 14.27% year-on-year, with operating net cash flow at 108 million yuan, a decrease of 52.41% [2][3] Product Strategy and Market Performance - The company achieved good growth in the domestic market, with Q1 2024 domestic revenue of 542 million yuan, up 12.22% year-on-year, while provincial revenue was 1.421 billion yuan, down 0.21% year-on-year [2][3] - E-commerce sales showed strong performance, with wholesale and e-commerce revenues of 1.814 billion yuan and 150 million yuan, respectively, reflecting year-on-year increases of 2.78% and 5.86% [2][3] - The company has established a dealer review group to improve dealer quality, focusing on mature markets in provinces like Sichuan, Shanxi, and Henan [3]