Core Viewpoint - Jinzhongzi Liquor has made substantial progress in asset divestiture by signing a contract with Shenzhen Jun Cheng Pharmaceutical Co., Ltd. to transfer its stake in Anhui Jintaiyang Biochemical Pharmaceutical Co., Ltd. [1][2] Group 1: Asset Divestiture - The transfer of Jintaiyang Pharmaceutical was first planned in April 2024, with the initial public listing price set at RMB 130 million [1] - The adjusted net asset value of Jintaiyang Pharmaceutical as of December 31, 2024, is RMB 129.73 million, with an estimated valuation increase of RMB 22.40 million, representing a 17.26% increase [1] - The buyer, Jun Cheng Pharmaceutical, has a registered capital of only RMB 1 million and was established just 25 days before the announcement [1][2] Group 2: Financial Performance - Jinzhongzi's revenue from Jintaiyang Pharmaceutical, which was a significant income source, dropped by 62% to RMB 161 million in 2024, with a net profit of only RMB 6.19 million [2] - In 2023, Jintaiyang Pharmaceutical contributed a net profit of RMB 29.51 million, while Jinzhongzi reported a loss of RMB 22.07 million, indicating the pharmaceutical unit's importance to the company's profitability [2] - The company's liquor business revenue fell by 24.33% to RMB 744 million in 2024, returning to 2021 levels, with a further decline of approximately 22% in the first three quarters of the year [3][4] Group 3: Management and Strategy - The departure of two senior executives from the Huaren Group, including the general manager, raises questions about the company's future direction [3] - Jinzhongzi's product structure, which includes low-end products, has resulted in insufficient gross margins to cover expenses, leading to ongoing losses [3][4] - Despite attempts to upgrade products and expand channels, the company's sales expenses increased significantly, with a sales expense ratio of 31.84% and a management expense ratio of 12.47%, totaling 44.31% [5]