Core Insights - The company reported a total revenue of 2.48 billion in the first half of 2025, a year-on-year increase of 0.48%, and a net profit attributable to shareholders of 321 million, a year-on-year increase of 5.42% [1] - In Q2 2025, the company achieved a total revenue of 1.31 billion, a year-on-year decrease of 1.95%, while the net profit attributable to shareholders was 168 million, a year-on-year increase of 0.16% [1] - The company slightly exceeded revenue and profit expectations compared to prior forecasts [1] Financial Performance - Q2 2025 revenue from liquor was 1.31 billion, a year-on-year decrease of 1.73% [2] - Revenue breakdown: - Revenue above 100 million was 656 million, a year-on-year decrease of 9.69% - Revenue below 100 million was 652 million, a year-on-year increase of 7.84% [2] - Regional performance: - Hebei: 760 million, down 0.01% - Shandong: 45 million, down 1.16% - Anhui: 91 million, down 37.2% - Hunan: 317 million, up 12.5% - Other provinces: 90 million, down 4.20% - Overseas: 4 million, down 0.32% [2] - Q2 2025 net profit margin was 12.8%, an increase of 0.27 percentage points, primarily due to a decrease in sales expense ratio and income tax rate [2] - Q2 2025 gross margin was 67.4%, a decrease of 1.06 percentage points [2] - Q2 2025 operating cash flow was -224 million, compared to -187 million in the same period last year [2] Investment Rating and Valuation - Due to ongoing external demand pressures, the company has revised down its profit forecasts for 2025-2027, expecting net profits of 708 million, 769 million, and 855 million respectively, with year-on-year changes of -10.0%, 8.6%, and 11.2% [1] - Current stock price corresponds to a PE ratio of 23x, 21x, and 19x for 2025-2027, which remains within a reasonable range compared to peer valuations, maintaining a "buy" rating [1] Catalysts for Stock Performance - Core product growth rate exceeded expectations - Net profit growth rate also exceeded expectations [3]

Investment Rating - The investment rating for the company is "Outperform" (maintained) [1] Core Views - The company has shown better-than-expected performance with continuous product structure upgrades, maintaining a focus on marketing transformation and orderly adjustments in provincial markets [6][7] - For the first half of 2025, the company achieved total revenue of 1.759 billion yuan, a year-on-year increase of 0.3%, and a net profit attributable to the parent company of 298 million yuan, a year-on-year increase of 1.1% [6] - The company is adjusting its profit forecasts for 2025-2027, expecting net profits of 410 million yuan, 460 million yuan, and 540 million yuan respectively, with year-on-year growth rates of 4.6%, 13.1%, and 16.9% [6] Financial Performance - In Q2 2025, the company reported revenue of 651 million yuan, a year-on-year decrease of 4.0%, and a net profit of 64 million yuan, a year-on-year decrease of 12.8% [6] - The revenue breakdown for Q2 2025 shows that products priced above 300 yuan, between 100-300 yuan, and below 100 yuan generated revenues of 136 million yuan, 340 million yuan, and 145 million yuan respectively, with year-on-year changes of +11.3%, +0.3%, and -26.6% [7] - The company's cash flow performance is better than revenue, with cash sales of 749 million yuan in Q2 2025, a year-on-year increase of 17.2% [8] Profitability Metrics - The gross margin decreased by 1.0 percentage points in Q2 2025, primarily due to a slowdown in sales of products priced below 100 yuan after previous price increases [9] - The net profit margin in Q2 2025 decreased by 1 percentage point to 9.9% [9] - The company maintains a long-term trend of more precise and efficient expense allocation, with a sales expense ratio increasing by 1.6 percentage points year-on-year [9] Financial Summary and Valuation Indicators - For 2025, the expected revenue is 3.135 billion yuan, with a year-on-year growth of 3.8% [11] - The expected diluted EPS for 2025 is 0.80 yuan, with a corresponding P/E ratio of 26.6 times [11] - The expected net profit for 2025 is 406 million yuan, with a year-on-year growth of 4.6% [11]