Core Viewpoint - The company is experiencing a decline in revenue and profitability due to inventory destocking challenges and increased competition in the market [1][2][4]. Financial Performance - In 2024, the company achieved operating revenue of 28.876 billion yuan, a year-on-year decrease of 12.83%, and a net profit attributable to shareholders of 6.673 billion yuan, down 33.37% [1]. - For Q1 2025, the company reported operating revenue of 11.066 billion yuan, a decline of 31.92% year-on-year, and a net profit of 3.637 billion yuan, down 39.93% [1][2]. - The gross margin for Q1 2025 decreased by 0.44 percentage points to 75.6%, while the net profit margin fell by 4.4 percentage points to 32.9% [2]. Market Trends - The market for mid-to-high-end liquor in 2024 generated revenue of 24.317 billion yuan, down 14.8% year-on-year, while ordinary liquor revenue was 3.931 billion yuan, a slight decrease of 0.5% [1]. - The company faced challenges in both domestic and international markets, with domestic revenue at 12.748 billion yuan (down 11.4%) and international revenue at 15.5 billion yuan (down 14.35%) [1]. Strategic Adjustments - The company is implementing several reforms to improve its operational status, including quota management for distributors and optimizing expense allocation [3]. - A new product, the seventh generation of Hai Zhi Lan, is set to be launched in the second quarter in Jiangsu province [3]. Profit Forecast and Valuation - Due to increased competition, the company's 2025 profit forecast has been reduced by 37.7% to 5.98 billion yuan, with a new target price set at 83 yuan, reflecting a 21% decrease [4]. - The current price corresponds to a P/E ratio of 17x for 2024/25, while the target price reflects a P/E of 21x/20x [4].