Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 49.14 [1][8]. Core Views - The company continues to face challenges in Q3, with a focus on enhancing the performance of its cave-aged liquor series. Despite a decline in overall sales due to weakened external demand and fewer banquet events, the long-term consumption base in the mainstream price range of RMB 100-300 in Anhui remains solid. The company is expected to improve its market share in this segment [6][8]. - The company reported a significant decline in revenue and net profit for the first three quarters of 2025, with total revenue and net profit down by 18.1% and 24.7% year-on-year, respectively. Q3 alone saw a 20.8% drop in revenue and a 39.0% drop in net profit [6][7]. Financial Performance Summary - For the fiscal year 2024, the company is projected to achieve a revenue of RMB 7,344 million, with a year-on-year growth of 9.28%. However, for 2025, revenue is expected to decline by 16.78% to RMB 6,111 million, followed by a recovery in 2026 and 2027 [5][8]. - The net profit attributable to the parent company is forecasted to be RMB 2,589 million in 2024, reflecting a growth of 13.18%, but is expected to drop to RMB 2,031 million in 2025, a decrease of 21.58% [5][8]. - The company's gross margin has decreased by 1.7 percentage points to 72.6% for the first three quarters of 2025, with a further decline to 70.2% in Q3 [7][8]. Market Position and Strategy - The company is focusing on the mass-market segment and aims for balanced development in both provincial and out-of-province markets. The cave-aged liquor series is expected to continue gaining momentum, with a long-term outlook for product structure upgrades [8][10]. - As of Q3 2025, the company has increased its number of distributors in the province to 771, reflecting a net increase of 20 compared to the end of 2024, indicating a strengthening of its market presence [6][8].

Investment Rating - The report maintains a "Buy" rating for the company [6] Core Views - The company experienced a significant decline in revenue and net profit in the first half of 2025, with total revenue of 3.16 billion yuan, down 16.89% year-on-year, and net profit of 1.13 billion yuan, down 18.19% year-on-year [1] - The second quarter saw an even larger decline in revenue, with a 24.13% drop compared to the same period last year, attributed to policy impacts and increased channel pressure [2] - The company is actively adjusting its product offerings, particularly in the mid-to-low-end segments, and anticipates a gradual recovery in performance as market conditions improve [4] Summary by Sections Financial Performance - In Q2 2025, the sales gross margin was 68.33%, a decrease of 2.82 percentage points year-on-year, while the net profit margin fell to 27.12%, down 4.83 percentage points year-on-year [3] - The company reported a cash flow from operating activities of -179 million yuan in Q2 2025, indicating a decline in cash collection [3] Revenue Breakdown - Q2 2025 revenue from mid-to-high-end and ordinary liquor was 817 million yuan and 210 million yuan, respectively, reflecting declines of 23.6% and 32.9% year-on-year [2] - Sales revenue in provincial and non-provincial markets for Q2 2025 were 730 million yuan and 296 million yuan, down 20.3% and 36.4% year-on-year, respectively [2] Profit Forecast and Valuation - The profit forecasts for 2025 and 2026 have been revised down to 2.173 billion yuan and 2.402 billion yuan, representing decreases of 31% and 34% from previous estimates [4] - The estimated EPS for 2025-2027 is projected at 2.72, 3.00, and 3.29 yuan, with corresponding P/E ratios of 17, 15, and 14 times [4]