Core Viewpoint - The goal of the elected government is to improve the country, which necessitates driving change and implementing reforms [1] Group 1 - The Prime Minister emphasizes the importance of transformation for national improvement [1]

Group 1 - The meeting emphasized the importance of completing the "13th Five-Year Plan" and achieving the goal of building a moderately prosperous society, while initiating the new journey of building a modern socialist country through effective reforms [1][6] - The meeting highlighted the critical role of state-owned enterprises (SOEs) as a foundation for socialism and their significant contributions during the COVID-19 pandemic, particularly in emergency supply, medical support, and stabilizing supply chains [2] - The meeting discussed the need for a three-year action plan for SOE reform, focusing on enhancing competitiveness, innovation, and risk resistance while maintaining the leadership of the Communist Party [2] Group 2 - The meeting called for accelerating the integration of new-generation information technology with manufacturing, emphasizing the need for structural reforms and the adoption of smart manufacturing practices [3] - It was noted that rural land system reforms should ensure the protection of collective ownership while exploring ways to enhance farmers' rights and interests [3] - The meeting stressed the importance of media integration and the development of a comprehensive media system to enhance public communication and cultural transmission [3] Group 3 - The meeting addressed the need for educational reform, focusing on improving evaluation systems to align with socialist educational goals and reduce the emphasis on standardized testing [4] - It was highlighted that state-owned cultural institutions play a vital role in promoting socialist culture and should focus on producing high-quality artistic works that meet public demand [5] - The meeting reviewed the progress of healthcare reforms since the 18th National Congress, emphasizing the need for a robust healthcare system and the importance of preventive health measures [5][6]

Investment Rating - The investment rating for Wuliangye is maintained as "Buy" [7] Core Views - The company achieved revenue of 89.175 billion yuan in 2024, a year-on-year increase of 7.09%, and a net profit of 31.853 billion yuan, up 5.44% year-on-year. In Q1 2025, revenue reached 36.940 billion yuan, growing by 6.05%, with a net profit of 14.860 billion yuan, an increase of 5.80% year-on-year. The performance in 2024 met expectations, while Q1 2025 slightly exceeded expectations [10] - The company is focusing on three key reform strategies: controlling volume and maintaining prices, establishing sales companies, and building platform companies. This approach aims to streamline the relationship between volume and price, maintain distributor profits, reduce inventory, and enhance the C-end network system focused on direct sales and group purchases [10] - The company is expected to achieve revenue growth rates of 5.13%, 5.43%, and 5.21% for 2025-2027, with net profit growth rates of 4.54%, 5.39%, and 5.43% respectively. The estimated EPS for these years are 8.58, 9.04, and 9.53 yuan, with corresponding P/E ratios of 15.00X, 14.24X, and 13.50X, indicating a favorable valuation [11] Summary by Sections Revenue and Profitability - In 2024, the revenue from other liquor products was 15.251 billion yuan, up 11.79% year-on-year, with a gross margin of 60.81% [2] - The company’s total revenue for 2024 was 89.175 billion yuan, with a net profit of 31.853 billion yuan, reflecting a year-on-year increase of 7.09% and 5.44% respectively [10] - The gross margin for 2024 was 77.05%, with a net margin of 37.22%. In Q1 2025, the gross margin was 77.74% and the net margin was 41.60% [5] Sales and Distribution - The company’s distribution revenue in 2024 was 48.738 billion yuan, a 5.99% increase year-on-year, while direct sales revenue was 34.389 billion yuan, up 12.89% [3] - The number of distributors increased by 82 for Wuliangye and 245 for Wuliangye Fragrance in 2024, with a total of 1.6 million new core terminals added [3] - The company has integrated its marketing regions into three major areas: North, South, and East, enhancing its market responsiveness [4] Cash Flow and Financial Health - Operating cash flow for 2024 was 33.940 billion yuan, a decrease of 18.69% year-on-year, while Q1 2025 saw a significant increase of 2,970.31% to 15.849 billion yuan [5] - The company’s contract liabilities increased by 4.826 billion yuan to 11.690 billion yuan in 2024, with a further increase of 5.119 billion yuan to 10.166 billion yuan in Q1 2025 [6] Future Outlook - The company is expected to maintain a stable growth trajectory, with a focus on enhancing its direct sales and group purchase capabilities, which are anticipated to drive revenue growth in line with macroeconomic indicators [10]