Core Viewpoint - The financial performance of Huazhi Wine Industry has significantly declined in Q1 2025, with revenue dropping by 31% year-on-year to 2.852 billion yuan and net profit decreasing by approximately 34% to about 85.39 million yuan, attributed to industry adjustments and cautious inventory management [1] Financial Performance - In Q1 2025, Huazhi Wine Industry reported revenue of 2.852 billion yuan, a 31% decrease compared to the previous year [1] - The net profit attributable to shareholders was approximately 85.39 million yuan, down about 34% year-on-year [1] - For the entire year of 2024, the company experienced a revenue decline of 6.49% to approximately 9.464 billion yuan and a net profit drop of 81% to about 44.45 million yuan [1] E-commerce Growth - E-commerce emerged as the only growth channel for Huazhi Wine Industry, with revenue from this segment reaching 2.092 billion yuan in 2024, a year-on-year increase of 72.87%, accounting for 22.11% of total revenue [2] - Wu Qirong, responsible for e-commerce in both Huazhi Wine Industry and the Hong Kong-listed Zhenjiu Lidu, has focused on digital marketing and online sales [2][3] Management Changes - Wu Qirong, son of the founder, joined the board as a non-independent director, alongside a new general manager, Yang Wuyong, who replaced the former general manager, Li Wei [1][4] - The company has undergone organizational restructuring, dividing the national market into 16 battle zones and establishing various support centers to enhance operational efficiency [5] Cost Management and Strategy - Huazhi Wine Industry has implemented cost-cutting measures, including a 21.81% reduction in sales expenses due to decreased promotional spending and a reduction in staff [6] - The company aims to recruit operational and service-oriented talent to shift its marketing model from traditional sales to an operations-driven approach [6] - The management has initiated a reform strategy focusing on inventory reduction, sales promotion, price stabilization, structural adjustment, team strengthening, and model optimization [7]