Core Viewpoint - Water Jiufang reported a significant decline in both revenue and net profit for the first half of the year, indicating challenges in the white liquor industry due to high inventory levels and weak consumer demand [2][3][4]. Financial Performance - The company expects to achieve a revenue of 1.498 billion yuan in the first half of the year, a year-on-year decrease of 12.84% [2]. - The net profit attributable to shareholders is projected to be 105 million yuan, down 56.52% from the previous year, representing a decrease of 137 million yuan [2]. - The adjusted net profit after excluding non-recurring items is expected to be 48 million yuan, a decline of 78.74% year-on-year [2]. - In Q1, the company reported a revenue of 959 million yuan and a net profit of 190 million yuan, suggesting a Q2 revenue of approximately 539 million yuan, a year-on-year decrease of about 31.34% [2]. Industry Context - The white liquor industry is undergoing a deep adjustment phase, with traditional consumption scenarios like business banquets facing ongoing pressure [3]. - The overall consumption performance during the Spring Festival was below expectations, leading to higher-than-expected channel inventory levels, which affected subsequent months' shipment volumes [3]. - The trend of weak consumer demand intensified in Q2, further impacting the inventory reduction process and slowing down the recovery of shipments [3]. Inventory Management - Water Jiufang emphasizes channel inventory levels as a core KPI for management, with daily monitoring of sales data [3]. - The company reported a sales volume increase of 543,000 liters in the first half of the year, a year-on-year increase of 14.54%, all from mid-to-high-end liquor [3][5]. Pricing Strategy - The company has faced challenges due to high channel inventory and sluggish terminal sales, leading to low-price dumping and sales disruptions among distributors [4]. - Water Jiufang is focusing on stabilizing its pricing system, particularly for its core product, Zhenniang No. 8, which contributes over 50% of its annual revenue [5]. - The company has implemented measures to control the distribution of Zhenniang No. 8 and stabilize its value chain, including halting sales of certain product specifications until further notice [5].