The operation is good, but many factors lead to losses.

1. The company's receivables increased by 20% compared with the same period last year, basically the same as the industry level, but the operating costs increased due to the rise in the prices of wine grapes and sugar. It increased by 5.46 million yuan compared with the same period last year; 2. The increase in sales income made the operating tax and additional increase of 2.2725 million yuan compared with the same period last year; 3. The social security fees of previous years were reimbursed this year, and the management expenses increased by 2.36 million yuan. 4. According to the current bad debt reserve policy, the company sets aside 16.15 million yuan for bad debts for accounts receivable. The above factors lead to the loss of the company's main profit, which is far behind the previous performance forecast of 1.2 million yuan in net profit.

With the further deterioration of the competitive environment in the industry, the company is facing major challenges in its future operation.

At present, there is a competitive situation of oligopoly in the domestic wine industry, and a small number of big brands occupy the vast majority of the market share; 2, the market share of imported wine is increasing, and the impact on domestic brands is becoming more and more significant. the negative impact on the industry, especially the second-tier brands continues to deepen; 3, the company is in the process of asset restructuring, the hearts and minds of the people fluctuate, some major measures are difficult to implement, and their own management is limited. 4. At present, the cash flow of the company is very tight, and the financial risk is great.

Whether the asset reorganization can be restarted becomes the key for the company to move towards.

In 2009, the company began an asset restructuring plan to issue 46.19 million additional shares to Tongheng International to acquire 100 per cent stakes in Tongheng International's winery, plateau wine, wine industry development and plateau biology companies. If the acquisition is successful, Tongheng International will become the largest shareholder of the company, and Yunnan Red will enter Tong Portugal shares. This is of positive significance to expand the market share of the company's products. However, the asset restructuring plan was not approved by the CSRC on December 21 last year. It is uncertain whether the restructuring plan can be restarted in the future, and restructuring will be a key factor affecting the company's development.

Profit forecast and valuation

As the audit and evaluation of the assets to be injected has not yet been formed, there is a lot of uncertainty in the future development of the company, we do not have a profit forecast, do not rating.