BAIRUN CORPORATION(SZ:002568)2025-08-27 15:19Summary of the Conference Call on Baijiu Industry and Company Insights Company and Industry Overview - The conference call focuses on Bairun Co., Ltd., a leading player in the premixed cocktail market in Anhui Province. The company is facing challenges in sales and market dynamics for its Rio brand of premixed cocktails [1][2]. Key Points and Arguments Sales Performance - In 2024, Bairun's sales in Anhui for premixed cocktails reached ¥1.18 billion, a slight decline from ¥1.2 billion in 2023, but a significant increase from ¥750 million in 2022 [2]. - The sales decline is attributed to reduced profit margins for distributors and increased competition from low-priced products on online platforms [1][3]. Market Challenges - The company is experiencing a 10% price drop in the market due to excess inventory and aggressive discounting by distributors [3][5]. - Bairun's strategy has shifted towards channel expansion rather than consumer growth, as the market share is limited [3][31]. Product and Channel Strategy - The Rio brand targets consumers aged 18-35, but male consumer growth has been limited, leading to a decline in sales of stronger products [9]. - The company has introduced various alcohol content levels but faces challenges in pricing consistency between online and offline channels [9][10]. - The light enjoyment product line is struggling to gain traction due to lack of dedicated marketing efforts and competition from beer [12][13]. Distribution and Inventory Management - Bairun has implemented measures to address market chaos, including penalties for distributors and reduced marketing expenses, but these are seen as temporary fixes [5][34]. - The company has a healthy inventory turnover target of 1.5 to 2 months, with current levels in Anhui nearing this target, while other provinces may have longer turnover periods [18]. Competitive Landscape - Bairun's Rio brand maintains a competitive edge in the premixed cocktail market due to strong brand recognition and pricing strategies, despite the presence of other brands [25]. - The company is focusing on expanding its presence in the whiskey market, but the performance has been underwhelming, with most distributors achieving only a few million in annual sales [32]. Future Outlook - The company aims for a sales target of ¥1.44 billion in 2025, maintaining the same product structure as in 2024 [22]. - There is a belief that significant improvements in channel management and product offerings may take until the end of 2025 to materialize [33]. Additional Important Insights - The company lacks a dedicated team for the restaurant channel, which is seen as a significant growth area [13][14]. - The pricing structure for various products shows significant variability, with strong refreshing products having low margins and relying heavily on rebates for profitability [11][26][27]. - The overall market environment is expected to remain challenging, with a 30% slowdown in sales turnover compared to the previous year [16]. This summary encapsulates the critical insights from the conference call, highlighting the challenges and strategies of Bairun Co., Ltd. in the premixed cocktail market.