Core Insights - The implementation of the "liquor restriction order" has led to a significant decline in traditional channels such as restaurants and group purchases, while new consumption scenarios like home drinking and late-night orders have emerged in some regions [1][2][5] - The impact of the policy has spread beyond traditional channels, affecting a broader range of consumption behaviors and leading to a shift in consumer preferences [1][4] Group 1: Changes in Consumption Patterns - Some distributors have reported an increase in orders for home drinking and family stockpiling, despite a decrease in restaurant orders [2][4] - In regions with more relaxed policy enforcement, there are reports of late-night orders and a shift from high-alcohol beverages to wines and lower-alcohol options [4][5] - The overall business environment remains challenging, with many distributors noting that the increase in home consumption is insufficient to offset the decline in business-related consumption [5][10] Group 2: Impact on Different Market Segments - The "liquor restriction order" has affected all price segments, with mid-to-high-end products, particularly those reliant on government and business purchases, facing the most significant impact [6][8] - Distributors in various regions have reported sales declines of 30%-50% in retail channels, particularly in smoke shops where high-end wines are less prominent [7][10] - Some distributors are pivoting towards lower-priced retail products to mitigate the impact of the policy, focusing on innovative products aimed at younger consumers [8][11] Group 3: Strategic Adjustments by Distributors - Distributors with diversified channel strategies are better positioned to withstand the pressures from the "liquor restriction order," as e-commerce and instant retail channels remain relatively stable [6][8] - Many distributors are exploring partnerships with non-governmental channels, such as tea shops, to stimulate sales and reach new consumer demographics [5][10] - The overall sentiment in the industry is pessimistic, with many distributors reporting a significant drop in consumer confidence and spending willingness [7][8]

Core Viewpoint - The company reported FY2024 results that met market expectations, with a slight decline in revenue but an increase in net profit, indicating resilience in a weak demand environment [1][2]. Financial Performance - FY2024 revenue was 23.51 billion, down 0.3% year-on-year, while net profit was 4.34 billion, up 8.6% year-on-year [1]. - In 2HFY24, revenue reached 12.63 billion, an increase of 2.6% year-on-year, and net profit was 2.47 billion, up 9.5% year-on-year [1]. - The gross margin improved by 1 percentage point year-on-year, benefiting from lower raw material prices [2]. - The net profit margin increased by 1.5 percentage points to 18.4% due to reduced financial expenses and effective tax rate [2]. Revenue Breakdown - Revenue performance by category for FY2024 showed declines in rice snacks (-1.2%) and leisure products (-2.6%), while dairy products saw a slight increase (+1.3%) [1]. - The company achieved low single-digit growth in revenue for rice snacks, driven by the launch of sub-brands [1]. - Emerging channels and overseas markets contributed to double-digit revenue growth, with sales from the snack wholesale channel increasing to approximately 10% of total sales [1]. Future Outlook - For FY2025, revenue is expected to grow steadily, with profit margins likely to remain stable [2]. - The company has implemented organizational changes to enhance marketing strategies and expand channels, which may positively impact future performance [2]. - The company anticipates stable growth across various product categories, supported by inventory management and reduced promotional spending [2]. Valuation and Estimates - The company is trading at 12.8/12.0 times FY2025/2026 P/E ratios [3]. - FY2025 profit forecast has been raised by 5.2% to 4.5 billion, with FY2026 forecast introduced at 4.7 billion [3]. - The target price has been increased by 10% to 5.8 HKD, reflecting an upward valuation trend [3].

Core Viewpoint - CICC maintains profit expectations for Zhou Hei Ya (01458) for 2025 and 2026, raising the target price by 20% to HKD 3.0, indicating a potential upside of approximately 13.2% from the current price [1] Group 1: Store Quality and Structure - In 2025, the company will focus on enhancing store quality and optimizing store structure, emphasizing "people, goods, and environment" [2] - The company will enhance membership operations and attract traffic through online channels and in-store competitions among staff [2] - There are no specific targets for the number of stores in 2025, with a focus on improving store quality instead [2] - The store structure adjustment is expected to be completed by 2024, with a net reduction of 504 and 252 stores in commercial and community areas, respectively, while increasing transportation hub stores by 36 [2] - Same-store operations showed a year-on-year increase in Q1 2025 and April-May, indicating steady improvement in overall store performance [2] Group 2: Emerging Channels - The company is making steady progress in emerging channels, with products entering Sam's Club, Pang Donglai, and Yonghui stores [3] - In March 2024, the company's marinated products entered the Sam's Club channel, ranking in the Top 6 of the seasoning and sauce category by sales data [3] - The company has also entered Pang Donglai and some Yonghui stores, accelerating expansion into leading regional supermarkets [3] - Zhou Hei Ya has recently entered the MIX supermarket in Malaysia, laying a solid foundation for future expansion into Southeast Asia and other markets [3]

Investment Rating - The report maintains a "Buy" rating for the company, expecting a relative increase of over 15% compared to the CSI 300 index in the next six months [34][17]. Core Views - The company achieved a revenue of 8.124 billion yuan in 2024, representing a year-on-year growth of 33.74%, while the net profit attributable to shareholders decreased by 19.21% to 334 million yuan due to high shipping costs and increased sales expenses [5][6]. - The company is focusing on product innovation and expanding its sales channels, particularly in emerging platforms like TEMU, TikTok, and SHEIN, which have shown significant growth [6][12]. - The logistics optimization strategy, including the establishment of additional warehouses in Europe and the U.S., has improved delivery efficiency and reduced costs [10][11]. Summary by Sections Financial Performance - In 2024, the company reported a net cash flow from operating activities of 2.294 billion yuan, a year-on-year increase of 53.02% [5]. - The gross profit margin for 2024 was 34.65%, a decrease of 1.67 percentage points compared to the previous year [15]. - For Q1 2025, the company achieved a revenue of 2.091 billion yuan, a year-on-year increase of 13.56%, with a net profit of 111 million yuan, up 10.30% [5][16]. Revenue Growth Drivers - The revenue growth was driven by strong performance in new and secondary products, which accounted for 37% of total revenue, with a year-on-year growth of 89% [6]. - The furniture and home goods categories saw significant growth, with revenues of 4.198 billion yuan and 2.953 billion yuan, respectively, both showing over 35% growth [7]. - The company has diversified its sales channels, with B2C and B2B revenues of 6.837 billion yuan and 1.196 billion yuan, respectively, reflecting a year-on-year increase of 38.43% and 14.43% [9]. Supply Chain and Logistics - The company has established a global mixed warehousing network, with a self-operated warehouse area of 334,900 square meters by the end of 2024, covering key markets in Europe and the U.S. [10]. - The logistics strategy includes optimizing warehouse locations to enhance delivery speed and reduce costs, with average shipping costs decreasing by 0.7 to 2.4 USD per package [10][11]. - The company is transitioning its supply chain to Southeast Asia to mitigate geopolitical risks and reduce costs, with 20% of shipments to the U.S. already sourced from this region [14]. Future Outlook - The company is projected to achieve net profits of 385 million yuan, 548 million yuan, and 709 million yuan in 2025, 2026, and 2027, respectively, with corresponding EPS of 0.96 yuan, 1.37 yuan, and 1.76 yuan [19][17]. - The ongoing expansion into new sales channels and the optimization of logistics are expected to support sustained revenue growth and improve profitability in the coming years [12][17].