Core Viewpoint - The company reported its 2025 H1 financial results, showing slight revenue and profit growth year-on-year, but a significant decline in Q2 performance, indicating challenges in the market and product structure [1][2]. Financial Performance - In 2025 H1, the company achieved revenue of 13.88 billion yuan, a year-on-year increase of 0.54%, and a net profit attributable to shareholders of 3.66 billion yuan, up 2.49% year-on-year [1]. - For Q2 2025, revenue was 4.73 billion yuan, down 14.23% year-on-year, with a net profit of 1.33 billion yuan, a decrease of 11.63% year-on-year [1]. Product and Market Analysis - The product structure is under pressure, with an increase in volume but a decrease in price. The domestic market remains stable while adjustments are evident in the external market [2]. - In 2025 H1, revenue from different business segments was 13.64 billion yuan for liquor, 46 million yuan for hotels, and 194 million yuan for other businesses, with year-on-year changes of +1.57%, +10.44%, and -42.10% respectively [2]. - Sales volume for key liquor brands showed positive growth, but average prices declined, indicating a challenging pricing environment [2]. Regional Performance - Revenue by region in 2025 H1 was 12.30 billion yuan for Central China, 809 million yuan for North China, 768 million yuan for South China, and 500,000 yuan for international markets, with significant variances in growth rates [2]. - The core markets demonstrated stronger resilience against risks, while expansion efforts in external markets faced short-term obstacles [2]. Channel and Distributor Insights - In 2025 H1, offline and online revenues were 13.31 billion yuan and 573 million yuan, reflecting a year-on-year change of -0.7% and +40.2% respectively, indicating a strong growth in online channels [2]. - The number of distributors in various regions showed a net decrease, suggesting an optimization of the distributor network [2]. Cost Management and Profitability - The gross margin for 2025 H1 was 79.87%, slightly down from the previous year, primarily due to product structure changes [3]. - The company managed to reduce sales and management expense ratios, leading to a slight increase in net profit margin for H1 and Q2 [3]. Investment Outlook - Based on the 2025 H1 performance and recent sales trends, the company adjusted its profit forecasts, expecting revenue growth rates of -4%, 3%, and 4% for 2025-2027, and net profit growth rates of -6%, 5%, and 5% respectively [3]. - The estimated EPS for the next three years is projected at 9.85, 10.30, and 10.84 yuan, with a target price of 185.40 yuan based on a PE ratio of 18x for 2026, suggesting a "buy" rating [3].

Investment Rating - The report maintains a "Buy" rating for the company [5][8] Core Views - The company demonstrated resilience during the adjustment period, with a slight increase in total revenue and net profit in the first half of 2025 [1] - The company's revenue for the first half of 2025 reached 13.88 billion yuan, a year-on-year increase of 0.54%, while the net profit attributable to the parent company was 3.66 billion yuan, up 2.49% year-on-year [1] - The report highlights the stable performance of the company's flagship product, Year Original Liquor, amidst industry adjustments [2] Revenue Breakdown - In the first half of 2025, the company generated revenue from different segments: 13.64 billion yuan from liquor, 46 million yuan from hotels, and 194 million yuan from other businesses, with year-on-year changes of +1.57%, +10.44%, and -42.10% respectively [2] - Year Original Liquor sales increased slightly, with revenue of 10.96 billion yuan, a year-on-year increase of 1.59%, while the average factory price decreased by 8.22% to 167,500 yuan per ton [2] - The company’s sales volume for liquor reached 81,400 tons, up 10.67% year-on-year, while the sales volume for Year Original Liquor was 46,600 tons, also up 10.80% year-on-year [2] Regional Performance - The company’s revenue from different regions in the first half of 2025 was as follows: Central China 12.30 billion yuan (+3.60% YoY), North China 808 million yuan (-27.04% YoY), South China 768 million yuan (-5.84% YoY), and International 50,000 yuan (-53.68% YoY) [3] - The online sales channel showed significant growth, with revenue of 573 million yuan, a year-on-year increase of 40.19%, while offline sales slightly decreased by 0.67% to 1.33 billion yuan [3] Profitability and Cost Management - The company’s gross margin slightly declined, but the net profit margin improved due to cost savings in operating expenses. The net profit margin for the first half of 2025 was 26.38%, up 0.50 percentage points year-on-year [4] - In the second quarter of 2025, the net profit margin was 28.13%, an increase of 0.83 percentage points year-on-year, while the gross margin was 80.24%, down 0.26 percentage points [4] Financial Forecast - The company is expected to achieve net profits of 5.48 billion yuan, 5.89 billion yuan, and 6.45 billion yuan for the years 2025, 2026, and 2027, with growth rates of -0.62%, 7.40%, and 9.51% respectively [5]