From January to September 2011, the company achieved operating income of 758 million yuan, down 4.05% from the same period last year, and operating profit of 60.39 million yuan, down 30.53% from the same period last year. The net profit attributed to the parent company was 45.46 million yuan, down 32.17% from the same period last year, and earnings per share was 0.18 yuan.

Among them, in the third quarter, the company realized operating income of 301 million yuan, down 13.31% from the same period last year, operating profit of 21.51 million yuan, down 61.14% from the same period last year, and net profit belonging to the parent company of 17.14 million yuan, down 58.01% from the same period last year.

Sales are shrinking and the peak season is sluggish. During the reporting period, the company's beer sales continued to shrink, resulting in a decline in revenue and profits. Among them, the third quarter is the peak season for beer sales, but the company's operating income in the third quarter was only 301 million yuan, down 13.31 percent from the same period last year, and the net profit belonging to the parent company dropped 58 percent to 17.14 million yuan. We believe that the sharp decline in the company's performance is mainly due to the impact of foreign competitors in the company's territorial market and the negative impact of the nationwide crackdown on drunk driving on the company's product sales. However, with the gradual deepening of the company's sales reform and the adjustment of product structure and incentive system, the company's profitability is expected to be improved in the future.

During this period, the increase in expense rate affects the performance of the company. During the reporting period, the expense rate during the company period rose to 17.36%, an increase of 4.33% over the same period last year. Among them, the increase in sales expense rate by 4.35 percentage points to 11.76% is the main reason for the increase in expense rate during the period. The sharp rise in expense rates during the period further dragged down the company's performance.

The results of marketing reform have not yet been shown. Based on the advanced experience of Guangxi Liquan Beer, the company has created a deep distribution model with the terminal as the core and the service market. Implement a flat marketing network, expand the sales team, and implement differentiated sales strategies to improve the market coverage and share of each region. At the same time, it has increased the advertising and the promotion of new products, and adjusted the existing incentive system, hoping to mobilize the enthusiasm and creativity of employees to improve the performance of the company. However, from the current situation of the company, the results of marketing reform have not yet been shown.

Profit forecast and investment rating. We expect the company's EPS from 2011 to 2013 to be 0.19,0.22 and 0.25yuan respectively. Yesterday's closing price was 8.76yuan, and the corresponding dynamic PE was 45x, 40X and 35x respectively, maintaining the company's "neutral" investment rating.

Risk hint. (1) market systemic risk; (2) food safety risk; (3) raw material price risk.