Core Viewpoint - The company reported a significant decline in revenue and a net loss for the first half of 2025, indicating challenges in its financial performance and necessitating strategic adjustments to its product lines and operational management [1]. Financial Performance - The company's revenue decreased by 27.47% to 484 million yuan, with a net loss of 72.2 million yuan in the first half of 2025 [1]. Product Line Adjustment - The company has restructured its product lines to focus on three main categories: high-end (Fuhuo Xiang series), mid-range boxed (Jinzong Nianfen series), and light bottle liquor (Jinzong Tegong), aiming to streamline its offerings and enhance performance [2]. - The total revenue from different product segments includes: - High-end liquor: 37.3 million yuan - Mid-range liquor: 113.4 million yuan - Low-end liquor: 251.3 million yuan [2]. Financial Control and Cost Management - The company upgraded its financial control system to improve expense management, transitioning from a rigid model to a more flexible and strategic approach, resulting in savings of nearly 27 million yuan in display expenses and significant reductions in promotional costs [3]. - The company is focusing on resource allocation by region and product, controlling fixed investment amounts based on market development stages, and enhancing the approval process for expense items [3]. Marketing and Organizational Restructuring - The company has restructured its sales regions and optimized market leadership roles, aiming to build a talent pool and improve organizational efficiency [3]. - The marketing center has been relocated to Fuyang to strengthen local market development and enhance collaboration with government entities for better support [3]. - Plans are in place to optimize management levels and improve operational efficiency, with a target of maintaining a maximum of three management levels and increasing the overall management span by 10% [3].

Core Insights - The company is projected to experience a decline in revenue from 5.164 billion RMB in 2023 to 4.921 billion RMB in 2024, representing a year-on-year decrease of 4.7% [1] - Adjusted net profit is expected to shift from a profit of 20.9 million RMB in 2023 to a loss of 919 million RMB in 2024 [1] Revenue Breakdown - Revenue from freshly brewed tea is expected to decrease by 4.2% to 3.388 billion RMB [2][3] - Revenue from baked goods is projected to decline by 3% to 528 million RMB [2][3] - Revenue from bottled beverages is anticipated to grow by 0.8% to 293 million RMB [2][3] - Revenue from other products is expected to increase by 6.4% to 711 million RMB [2][3] Store Network and Strategy - As of December 31, 2024, the company has expanded its tea shop network from 1,655 to 1,798 stores, including 1,453 direct-operated and 345 franchised stores [3] - The company has halted expansion of direct-operated and franchised stores since May of the previous year, focusing instead on ensuring profitability for each store [4] - A successful store transformation in Shenzhen led to a 31% increase in performance, prompting plans to replicate this model in first-tier cities [4] - The company is adjusting its product line to reduce SKUs and enhance quality in response to changing consumer behavior and cost pressures [4]