Core Viewpoint - Shede Liquor achieved impressive financial results in the first half of 2025, with revenue of 2.7 billion and a net profit of 443 million, despite the traditionally weak second quarter for the liquor industry [1][2] Group 1: Financial Performance - In the first half of 2025, the company reported a revenue of 2.7 billion and a net profit of 443 million [1] - The net cash flow from operating activities increased by 427.77% year-on-year, indicating strong financial health [1] - In Q2 2025, the company generated revenue of 1.125 billion and a net profit of 97.17 million, showcasing resilience in a challenging market [1] Group 2: Strategic Initiatives - The company focused on channel development, emphasizing e-commerce, group purchases, and collaboration with both new and existing merchants to build a more resilient distribution network [2] - Shede Liquor is actively expanding into group direct sales and overseas markets, promoting Chinese liquor culture globally [2] - The product strategy includes a dual focus on high-end and mass-market products, with significant advancements in both segments [2] Group 3: Product Innovation - The company plans to launch its first low-alcohol drink, "Shede Zizai," on August 30, 2025, to cater to changing consumer preferences [2] - The introduction of "Shede Zizai" aims to capture new market segments, particularly among younger consumers who prefer low-alcohol options for social gatherings [2] - The overall strategy combines classic products to maintain the core market while innovating to explore new opportunities [2]

Summary of Shede Liquor Industry Conference Call Company Overview - **Company**: Shede Liquor Industry - **Industry**: Liquor/Alcohol Industry Key Points and Arguments Financial Performance - In Q2 2025, Shede Liquor's profit increased by **139.5%** year-on-year, while revenue remained stable compared to the previous year, indicating a recovery in performance [2][3] - The company implemented cost reduction and efficiency improvement measures, controlling procurement and operational expenses, which will continue until 2026 to navigate the industry's deep adjustment period [2][5] Market Outlook - The company holds a positive outlook for the upcoming Mid-Autumn Festival and National Day, with good sales momentum and a commitment to high-end product positioning [2][6] - The "Three Good" pricing management system was introduced to stabilize the market, balancing supply and demand, managing costs, and governing channels [2][6] Product Strategy - The product structure remained largely unchanged, but performance varied across price segments. High-end products like Shede Ten Years saw nearly **100%** growth, while lower-tier products faced challenges [4][14] - The company plans to launch a **29-degree** product to attract consumers, reflecting a shift in consumer preferences [2][22] Sales Channels and Growth Strategies - Shede is focusing on e-commerce and direct sales teams to explore new markets, targeting seven core base markets [2][6][15] - The company has initiated the "Thunder Action" to recover low-priced products in the market and control promotional efforts to ensure stable profits for distributors [2][10] Competitive Environment - In response to competitive pressures, Shede is enhancing its pricing management, innovating product structures, and expanding sales channels [8][20] - The company is also focusing on banquet scenarios and corporate group purchases to offset declines in business consumption [9][20] Regional Market Development - Shede has identified six major base markets for expansion, aiming to increase market share in these regions over the next 3-5 years [17] Internationalization - The company has begun international expansion, which not only boosts sales but also enhances brand reputation [18] Employee and Distributor Relations - Maintaining distributor profitability is crucial, with over **85%** of distributors currently profitable, fostering strong relationships [25] - The company has implemented a performance-based incentive system to maintain team morale and efficiency [24][26] Future Demand and Market Trends - The company anticipates a recovery in demand across different price segments, with a focus on high-end and low-end markets [16] - The introduction of ultra-low alcohol products targets both existing consumers and new demographics, such as younger drinkers [23] Conclusion - Shede Liquor is strategically positioned to navigate the current industry challenges through cost management, product innovation, and market expansion efforts, with a cautiously optimistic outlook for the remainder of 2025 [7][16]