Core Viewpoint - Shede Liquor has been awarded the "Guoxin Cup ESG Golden Bull Award Top 100" for its long-term commitment and systematic practices in environmental, social, and governance (ESG) fields, highlighting its leading position in the liquor industry regarding ESG development [2][4]. Group 1: Environmental Initiatives - Shede Liquor has pioneered the "ecological brewing" concept since the 1980s, establishing a 6.5 million square meter ecological brewing industrial park with a greening rate of 98.5% [6]. - The company has implemented various energy-saving and carbon-reduction measures, including clean energy projects, high-temperature cooling water recycling, distributed photovoltaic power generation, and the use of environmentally friendly materials [8]. - Shede Liquor's Wind ESG environmental score is 5.39, significantly higher than the industry average of 3.27, demonstrating its ecological advantages and sustainable development capabilities [11]. Group 2: Social Responsibility - The company actively engages in social responsibility initiatives, including rural revitalization, educational funding, and industrial empowerment, contributing to the common development of the enterprise and society [15]. - Shede Liquor collaborates with local governments to establish a 200,000-acre dedicated grain base for brewing, enhancing rural economic vitality through a "company + base + farmers" model [15]. - The company has received multiple accolades, including "2024 Sichuan ESG Benchmark Enterprise" and "2025 Responsibility China ESG Annual Ceremony Public Welfare Innovation Leading Enterprise," reflecting its commitment to ESG practices [18].

Core Viewpoint - Jinhuijiu has a rich history dating back to the Western Han Dynasty, evolving through various historical periods to become a modern enterprise with significant production capacity and brand heritage [1][2]. Group 1: Company History and Development - Jinhuijiu's brewing history can be traced back to the Western Han Dynasty, with significant development during the Tang and Song Dynasties, leading to the establishment of a strong industry in the Ming and Qing Dynasties [1]. - The company was formed in 1951 by consolidating several well-known local distilleries and registered the "Jinhuijiu" brand in 1960, eventually going public in 2016 [1]. - Today, Jinhuijiu operates a national AAAA-level ecological brewing park with an annual production capacity of tens of thousands of tons, combining historical depth with modern operational capabilities [1]. Group 2: Production and Quality - The core production area of Jinhuijiu, located in Longnan Huixian, benefits from a unique microclimate ideal for brewing, surrounded by 150 square kilometers of original forest [2]. - The water source, "Haiyan Shenquan," is weakly acidic, providing an excellent base for high-quality liquor production, while the century-old fermentation pits contain over 160 types of microorganisms that contribute to the unique flavor profile of Jinhuijiu [2]. - The company employs a traditional "three low" brewing method, which preserves flavor compounds, and has integrated modern technology to enhance fermentation control, winning a national award for technological progress [2]. Group 3: Financial Performance - In the third quarter of 2025, Jinhuijiu reported revenues of 2.306 billion yuan and a net profit of 324 million yuan, demonstrating resilience amid industry adjustments [3]. - The company has seen a 13.75% year-on-year increase in revenue from high-end products priced above 300 yuan, while products priced between 100-300 yuan grew by 2.36% [3]. - The sales proportion of products priced above 100 yuan increased by 5.79 percentage points compared to the previous year, indicating a shift towards higher-margin products [3]. Group 4: Market Strategy and Digital Transformation - Jinhuijiu's market strategy focuses on national expansion while deepening its presence in the Northwest, achieving 1.689 billion yuan in revenue from the provincial market in the first three quarters of 2025 [3]. - The company has established regional marketing centers in key cities like Xining and Urumqi, enhancing its market reach in the Northwest [3]. - The digital transformation strategy has led to a 25.22% year-on-year increase in online channel revenue, supported by a model that integrates online and offline consumer experiences [4]. Group 5: Brand and Recognition - Jinhuijiu has received multiple prestigious awards, including gold medals at the 2025 IWSC China Spirits Competition, reflecting the industry's recognition of its product quality [5]. - The company was also recognized as a "2025 Annual Integrity and Business Model Case" by the Gansu Provincial Department of Commerce and included in the "2024-2025 Annual Respected Enterprises" list by Economic Observer [5]. Group 6: Industry Trends - The white liquor industry is expected to enter a mild recovery phase in the fourth quarter, driven by stabilizing terminal prices and improving consumer confidence due to macroeconomic recovery [6]. - Jinhuijiu is well-positioned to leverage its cultural heritage, product upgrades, diversified channels, and efficient management to capitalize on the anticipated industry recovery [6].

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [5] Core Views - The report suggests that the fundamentals may have bottomed out, and the company is waiting for demand recovery. The Anhui province, being a traditional stronghold for liquor production and sales, is expected to see continued growth in the liquor market despite consumption downgrading. The projected market size for Anhui's liquor market in 2024 is approximately 400 billion RMB, supported by the province's active private economy and strong per capita drinking capacity [5][25]. Summary by Sections Market Performance - The closing price of the company is 40.45 RMB, with a market capitalization of 32,360 million RMB. The one-year high and low prices are 69.00 RMB and 37.79 RMB, respectively. The company has a total share capital of 800 million shares and a debt-to-asset ratio of 22.09% [3]. Profit Forecast and Valuation - The company’s net profit attributable to shareholders is forecasted to be 21.32 billion RMB, 22.58 billion RMB, and 24.61 billion RMB for the years 2025 to 2027, corresponding to P/E ratios of 15, 14, and 13 times, respectively. The company is expected to show resilience in revenue and net profit due to solid channel management and brand recognition in Anhui, with room for market expansion [7][10][48]. Strategic Product Line and Channel Development - The company has successfully positioned itself in the mid-to-high-end market, focusing on price bands above 150 RMB, which aligns with the consumption upgrade trend in Anhui. The introduction of the "Cave" series has significantly improved the product structure and market share. The company employs a deep distribution model that covers both core cities and lower-tier markets, enhancing its competitive edge [9][39][37]. Economic Environment and Market Dynamics - The Anhui province's economy has shown robust growth, with GDP increasing from 3,125.3 billion RMB in 2000 to 50,625.2 billion RMB in 2024. The active private economy in Anhui contributes significantly to the liquor market's resilience, with private enterprises accounting for 60.7% of the province's GDP and 59.7% of tax revenue [25][29]. Financial Performance and Ratios - The company’s revenue for 2025 is projected to be 6,225 million RMB, reflecting a year-on-year decline of 15.23%. However, the revenue is expected to recover with growth rates of 2.71% and 6.11% in 2026 and 2027, respectively. The gross margin is anticipated to remain strong, with a net profit margin of 35.33% in 2024 [8][48].

Core Viewpoint - The article emphasizes the unique natural environment of Yibin, where the confluence of the Jinsha, Min, and Yangtze Rivers, along with the presence of Cuiping Mountain, creates an ideal ecosystem for the production of high-quality Xufu liquor [1][10]. Group 1: Water Source - The water used in Xufu liquor production comes from the pure underground water of the Jinsha River, which is filtered through millions of years of glacial sediment, resulting in exceptionally clean and pure water [4]. - This pristine water is crucial for the fermentation and blending processes, enhancing the activity of the yeast and contributing to the liquor's clarity and elegance [4]. Group 2: Ecological Environment - The confluence of the three rivers creates a unique microclimate that is beneficial for brewing, with stable temperatures and abundant water vapor [7]. - Cuiping Mountain acts as a natural barrier, providing a habitat for microorganisms essential for the brewing process, thus forming a "micro-ecological" environment that supports the production of high-quality liquor [7][8]. Group 3: Brewing Techniques - The company combines traditional brewing wisdom with modern technology, optimizing the solid-state fermentation process through meticulous attention to each step, from grain selection to aging [8]. - This dedication to quality and respect for nature is reflected in every drop of Xufu liquor, showcasing the harmonious blend of natural resources and artisanal skills [10].

Group 1 - Shede Liquor Industry announced an adjustment to its 2024 cash dividend total, with a proposed cash dividend of 4.3 yuan per 10 shares, totaling 141.44 million yuan, which represents 40.91% of the net profit attributable to shareholders [1] - The company has repurchased 41.94 million shares, with 29.55 thousand shares repurchased recently, leading to a reduction in the total number of shares eligible for profit distribution [1] - The adjustment reflects compliance with regulations and aims to protect the rights of minority shareholders, enhancing the company's image and investor relations [1] Group 2 - The China Alcoholic Drinks Association is soliciting opinions on the "Ecological Baijiu" group standard proposed by Anhui Yingjia Gongjiu Co., which aims to enhance brand image and product premium capabilities [2] - The initiative reflects a trend towards ecological brewing among liquor companies, potentially benefiting the white liquor sector through industry standardization and consumer awareness of ecological quality [2] - This move indicates the industry's proactive exploration of quality improvement and sustainable development, which may boost market confidence [2] Group 3 - Bairun Co. reported that its liquor business has started generating a small amount of revenue since Q1 2025, indicating a successful product structure optimization and maintaining high gross margins [3] - The development of the liquor business represents a new growth point for the company, enhancing its profitability and market competitiveness [3] - This diversification into the liquor sector may attract market attention towards structural opportunities in the consumer sector amid trends of consumption upgrading [3]