Core Viewpoint - The global alcoholic beverage market is undergoing structural changes, with increasing competition between wine and ready-to-drink (RTD) beverages, reflecting generational shifts in consumer culture [3][4][15] Market Trends - IWSR data indicates that the share of still wine in global consumption has decreased from 11% in 2019 to 10% in 2024, and is projected to drop to 9% by 2029, while RTD's share is expected to grow from 1% to 2% in the same period [3][4] - In the U.S., RTD sales have a compound annual growth rate of 14% from 2019 to 2024, surpassing the combined sales of still and sparkling wines [4] - In Canada, RTD sales are projected to exceed still wine sales by 2027, highlighting a significant market shift [4] Consumer Insights - Research shows that 15% of Generation Z consumers drink RTD beverages, compared to 12% for still wine, indicating a preference for convenience and immediate experiences [4][6] - The traditional image of wine, associated with complexity and formal occasions, contrasts sharply with the casual, direct consumption experience favored by younger consumers [6][10] Challenges for Wine Industry - The wine industry faces three interconnected challenges: 1. A significant gap in convenience, as RTD products are easily portable and require no additional tools for consumption, while wine's traditional packaging limits its use in casual settings [6][10] 2. A generational communication gap, where RTD marketing is visually engaging and emotionally resonant, while wine relies on complex narratives that may not resonate with younger consumers [9][10] 3. A decline in traditional consumption scenarios for wine, which are being replaced by more casual social settings where RTD has become the preferred choice [10] Strategic Recommendations for Wine Industry - The wine industry should innovate product forms, embracing packaging revolutions such as high-quality canned wines to appeal to modern consumers [10][12] - Developing "wine+" product lines with distinct flavors can attract new consumers and serve as entry points into the wine category [12] - A digital transformation in communication is essential, focusing on creating relatable narratives that connect wine with everyday moments and utilizing social media effectively [12][15] - Expanding consumption scenarios by linking wine to casual, enjoyable moments and enhancing availability in convenience stores and online platforms is crucial for growth [12][15] Future Outlook - The future of the wine industry lies in redefining its unique value while adapting to modern consumption habits, requiring a balance between maintaining quality and cultural heritage and embracing innovative packaging and marketing strategies [15]

Core Points - Diamond Estates Wines & Spirits Inc. issued 679,928 common shares at a deemed price of $0.21 per share as part of the acquisition of Perigon Beverage Group, marking the second tranche of share issuances based on gross margin earnouts [1] - The company also issued 254,885 common shares to 2RL Capital at a deemed price of $0.196 per share for ongoing services related to the Perigon acquisition [2] - A shareholder meeting is scheduled for December 22, 2025, with a strong encouragement for disinterested shareholders to vote in advance [3] Company Overview - Diamond Estates Wines & Spirits Inc. is a producer of high-quality wines and ciders and serves as a sales agent for over 120 beverage alcohol brands across Canada, operating four production facilities [4] - The company’s wine portfolio includes renowned brands from various countries, such as Fat Bastard from France and Kaiken from Argentina [6] - The spirits portfolio features distinguished brands like Tag Vodka and Ginslinger Gin from Ontario, as well as international brands from Mexico, Scotland, and the USA [7] - In the beer, cider, and ready-to-drink categories, the company represents products from Ontario, Belgium, the Netherlands, and Germany [8]

Financial Data and Key Metrics Changes - The company reported a decline in sales and brand partner productivity leading up to the global convention in August, but recent activity has shown improvement [4][6] - An increase in inventories was noted, attributed to new product introductions and investments in inventory locations for tariff mitigation [8] - The company expects to incur a one-time charge of $4.7 million in the fourth quarter due to a global cost reduction process [12] Business Line Data and Key Metrics Changes - Hiya Health experienced a 26% year-to-date sales growth despite challenges in the third quarter, with significant progress in integration initiatives [9] - RiseBar reported record third quarter net sales, with year-to-date net sales increasing by 169% [10][11] - The company is investing additional resources in Hiya Health and RiseBar to capitalize on current momentum and drive long-term growth [11] Market Data and Key Metrics Changes - The Americas and Europe regions performed relatively better than other regions, partly due to the maturity of these markets and the impact of the RiseBar performance [21] - The direct selling business has struggled over the past few years, but recent changes in compensation plans are expected to improve engagement and sales [31] Company Strategy and Development Direction - The company is focused on a comprehensive commercial strategy that includes an enhanced compensation plan, product innovation, and improved tools for brand partners [4][5] - Diversification remains a key strategy, with ongoing investments in Hiya Health and RiseBar, as well as potential M&A opportunities [35][36] - The company aims to create lasting value across its portfolio while adapting to a competitive landscape [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the direct selling business and the diversification strategy [12] - The company is optimistic about the future, particularly with the growth of Hiya Health in the children's health market and RiseBar in the healthy foods market [12] - Management acknowledged the challenges in the direct selling industry but believes recent changes will position the company for future success [31] Other Important Information - The company has initiated a global cost reduction process, including a right-sizing of the workforce, to prioritize strategic initiatives and improve efficiency [11][12] - Management highlighted the importance of simplicity and early success in the new compensation plan to attract younger demographics [5][6] Q&A Session Summary Question: Can you walk us through the trajectory of your business trends from July through October? - Management noted promising trends from the new compensation plan launched in July, with increased engagement and excitement observed in September and early October [17][19] Question: Can you discuss the incentives planned for the fourth quarter? - The company plans to provide strategic incentives for brand partners in the fourth quarter, which may carry over into early 2026 [22] Question: What are the reasons for the decline in active customer count for Hiya Health? - Management expressed confidence in Hiya Health's growth despite recent slowdowns, attributing challenges to changes in marketing algorithms [23] Question: How should we think about the level of annualized operating cost savings from the right-sizing process? - Management indicated that it is early in the process and will provide more details on cost savings in February [24] Question: Are you seeing any slowdown in consumer purchases related to VMS or wellness? - The company acknowledged struggles in the direct selling business but believes recent offerings will help improve performance [31] Question: Is there an opportunity to acquire more DTC businesses? - Management confirmed that diversification and potential M&A opportunities are part of the future strategy [35]

The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents of this Application Proof, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Application Proof. Application Proof of Semi-Tech Group Co., Ltd.* 賽美特信息集團股份有限公司 (A joint stock company incorporated in the People's Republic of China with ...