Summary of Lehui International Conference Call Company Overview - **Company**: Lehui International - **Industry**: Craft Beer and Beverage Equipment Key Points Business Model and Strategy - Lehui International is enhancing operational efficiency through a franchise model and selectively opening ODM (Original Design Manufacturer) business, partnering with brands like Haidilao to launch products such as "Super Active" to utilize excess capacity and increase revenue [2][3] - The company has deployed approximately 2,000 draft beer machines in Q1 2025 to capture the restaurant market, aiming to expand market share due to low domestic penetration rates compared to Western countries [2][7] Financial Performance - In 2024, the fresh beer business generated revenue of 140 million yuan, a 33% year-on-year increase, but remains in a loss position. The company aims to achieve breakeven or profitability in 2025 [2][5] - The number of effective distributors has increased to over 300, with some achieving annual sales between 3 million to 5 million yuan, which is expected to boost overall sales [2][8] Sales and Market Trends - Sales through distribution channels grew significantly in Q1 2025, with a year-on-year increase of approximately 30% to 50%. May sales reached the highest level of the previous year’s peak season, with expectations for further growth in June and July [2][10][11] - The company is focusing on major markets in East China, with plans to expand into cities with existing breweries [9] Product Development and Consumer Engagement - The craft beer sector is becoming increasingly competitive, with both small and large enterprises entering the market. Consumer feedback has been positive, with over 10,000 terminals selling their products, enhancing repeat purchase rates [12] - The company is actively developing new products to cater to diverse consumer preferences, including flavors aimed at attracting female consumers [12][17] ODM Business Progress - The ODM business has been initiated since the second half of 2024, with partnerships established with brands like Haidilao and West Beverages. The company is looking for partners capable of producing at least 100 tons annually [13][14] Equipment Division - The equipment segment is performing well, with strong order growth. The company is diversifying its offerings beyond beer equipment to include products for the liquor and renewable energy sectors [4][27] - The overseas market accounted for 37% of equipment sales last year, with a goal to reduce reliance on beer equipment from 80% to around 60% [27] Production Capacity and Factory Performance - The Ningbo factory achieved breakeven and profitability in 2024, while other early-stage factories like Wuhan and Changsha are also performing well [22][23] - New factories in Kunming and Harbin are delayed until April 2027, with no concerns about supply shortages due to mature preparatory work [24] Future Growth Plans - The company has set clear growth targets for 2025, focusing on fried chicken, ODM, and channel expansion as key business areas [25] - Continued collaboration with influencers and expansion of the franchise model are part of the strategy to increase market penetration [18] Conclusion - Lehui International is strategically positioning itself in the craft beer market through innovative business models, strong distributor networks, and a focus on product development, while also expanding its equipment division to reduce dependency on beer-related sales. The company is optimistic about achieving profitability and growth in the coming years.