Investment Rating - The investment rating for the food and beverage industry is "Positive" (maintained) [1] Core Viewpoints - The white liquor market is gradually stabilizing, with health and nutrition creating a second growth curve for Ximai. The food and beverage index increased by 1.1% from September 8 to September 12, ranking 17th among 28 sub-industries, underperforming the CSI 300 by approximately 0.3 percentage points. The sub-industries of meat products (+3.0%), white liquor (+1.7%), and pre-processed foods (+0.4%) performed relatively well. The white liquor sector is currently under demand pressure, with slight price declines for Feitian Moutai, indicating terminal demand stress. However, there are signs of improvement in terminal sales for Moutai since the end of August, suggesting that the bottom for the white liquor market is approaching. It is expected that the economic activity will increase with the implementation of large-scale infrastructure projects, leading to a stable upward trend in the white liquor market [4][11][12]. Summary by Sections Weekly Viewpoints - The white liquor market is stabilizing, and health products are becoming a potential growth area for Ximai. The food and beverage index's performance is lagging behind the market, with specific sub-industries showing better results [4][11]. Market Performance - The food and beverage index rose by 1.1%, ranking 17th out of 28 sectors, and underperformed the CSI 300 by about 0.3 percentage points. Meat products, white liquor, and pre-processed foods led the sub-industry performance [11][13]. Upstream Data - Some upstream raw material prices are declining, with full-fat milk powder auction prices down by 5.6% month-on-month but up by 12.2% year-on-year. Domestic fresh milk prices are also showing a downward trend [18][21]. Liquor Industry News - The liquor industry is seeing new product launches to adapt to market changes, with companies like Wuliangye and Zhenjiu introducing new products targeting younger consumers. The market is expected to recover as risks are released and new products are introduced [4][39]. Recommended Portfolio - The recommended stocks include Guizhou Moutai, Shanxi Fenjiu, Ximai Food, Wancheng Group, and Bairun Shares, with each company showing potential for growth despite current market pressures [5][43].

Core Viewpoint - The recent performance warning from Zhenjiu Lidu indicates a significant decline in revenue and profit for the first half of 2025, yet the stock price has surprisingly increased, reflecting market optimism about future prospects driven by the founder's marketing efforts [1][2][3]. Group 1: Financial Performance - Zhenjiu Lidu's revenue for the first half of 2025 is projected to be between 2.4 billion to 2.55 billion RMB, representing a decline of 38.3% to 41.9% compared to the previous year [1]. - The net profit is expected to decrease by 23% to 24%, while non-IFRS net profit is anticipated to drop by 39% to 40% [1]. Group 2: Market Reaction - Despite the negative earnings forecast, Zhenjiu Lidu's stock price has risen significantly, indicating a disconnect between market sentiment and financial reality [2]. - Investor optimism may stem from the founder Wu Xiangdong's active engagement on social media, creating a buzz around the brand [4][5]. Group 3: Marketing Strategy - Wu Xiangdong has adopted a "celebrity" approach, utilizing short videos to promote the brand and engage with potential investors and distributors [4][5]. - The introduction of new products, such as the 800 RMB "Dazhen" and the 88 RMB "Niushi" beer, aims to attract attention and expand the distributor network [7][8]. Group 4: Challenges and Competition - The new product pricing may be too high for mass appeal, particularly in a declining consumption environment, raising concerns about scalability [10][12]. - Zhenjiu Lidu's positioning in the mid-to-high-end market faces stiff competition from established brands like Moutai and Wuliangye, which dominate consumer preferences [15][16]. Group 5: Strategic Considerations - The strategy of leveraging a celebrity persona to attract distributors may not be sustainable in the long term, as it risks exhausting the founder's brand equity [24][25]. - The company needs to align its product offerings with market demand, potentially considering lower-priced options to appeal to a broader audience [33][34].

Core Viewpoint - The company, Zhenjiu Lid, is facing significant challenges in the first half of 2025, with expected revenue declines and a strategic focus on product innovation and market adaptation to stabilize its performance [1][2] Group 1: Financial Performance - For the first half of 2025, the company anticipates revenue between 2.4 to 2.55 billion yuan, representing a year-on-year decline of 38.3% to 41.9% [1] - The expected net profit attributable to shareholders is projected to decrease by 23% to 24%, while the adjusted net profit (Non-IFRS) is expected to decline by 39% to 40% [1] - The adjusted net profit decline aligns closely with the revenue decline, indicating stable profit margins despite the downturn [1] Group 2: Industry Context - The overall white liquor industry is experiencing weak recovery momentum due to ongoing macroeconomic uncertainties, with a decline in consumption during key festive periods [1] - The company is actively adjusting its strategies to cope with industry pressures, including launching new products and enhancing its pricing control [1] Group 3: Strategic Initiatives - The company launched a strategic new product, "Zhenjiu Dazhen," in June, which aims to strengthen brand recognition and improve market penetration through quality upgrades [2] - A new channel innovation strategy has been implemented, focusing on a low deposit entry and limited supply model to rebuild distributor confidence [2] - The chairman indicated that a significant portion of the budget will be allocated to the "Dazhen" product, suggesting a strong commitment to this strategic initiative [2] Group 4: Future Outlook - The company forecasts revenues of 5.666 billion yuan and 6.074 billion yuan for 2025 and 2026, respectively, with a projected year-on-year decline of 19.82% in 2025 followed by a growth of 7.21% in 2026 [2] - The adjusted net profit (Non-IFRS) is expected to be 1.312 billion yuan in 2025 and 1.443 billion yuan in 2026, with a decline of 21.73% in 2025 and a growth of 9.95% in 2026 [2] - The company is recommended for investment due to its clear brand positioning and strategic focus on optimizing the competitive landscape of premium liquor brands [2]