Incident: The company released its 2023 semi-annual report. 2023H1 achieved operating income of 6.211 billion yuan, a year-on-year decrease of 4.72%; realized net profit of 0.81 million yuan, a year-on-year decrease of 302.54%; realized net profit of non-attributable net profit of -81 million yuan, a year-on-year decrease of 293.06%. According to calculations, 2023Q2 achieved operating income of 2.124 billion yuan, a year-on-year decrease of 18.7%; realized net profit of 409 million yuan, a year-on-year decrease of 535.78%; realized net profit of non-attributable net profit of -409 million yuan, a year-on-year decrease of 552.84%.
High-grade liquors are growing well, and White Bull 2 is still in the process of recovering. The revenue of 23H1 premium liquor/mid-range liquor/low-grade liquor changed +59.8%/-6.0%/-13.8%, respectively. The 22H1 premium alcohol base was low. After the impact of the epidemic was reduced, scenarios such as catering recovered after the impact of the epidemic was reduced, and premium alcohol growth was good. The decline in revenue from low-grade alcohol is expected to be related to the impact of price increases. 42-degree White Bull 2 sales volume fell 3.9% year on year, and Gold Label sales volume increased 86.6% year on year. Contract liabilities at the end of the second quarter were 1.94 billion yuan, which is basically the same as the same period last year. In the first half of the year, the real estate sector had revenue of 1.23 billion yuan and net profit of 330 million yuan, mainly because the subsidiary Shunxin Jiayu sold two buildings, the parent company's Business Center and Universal Center. Real estate business revenue was 220 million yuan after the consolidated statement was offset, down 36.4% from the previous year. Due to the sale of buildings generated income tax expenses of 120 million yuan and asset disposal revenue of 5.1 million yuan, the actual real estate business is expected to lose more than 300 million yuan in the first half of the year.
Revenue from the pork+livestock business increased 16.0% year on year. Due to lower pig prices, gross profit from the pork business turned negative, and 23H1 achieved gross profit of -150 million yuan.
The investment of gold standard fees has led to an increase in the sales expense ratio, and the non-alcoholic business has dragged down the net interest rate. The overall gross margin of the 23H1 liquor business increased 5.5 pct to 46.4% year-on-year due to price increases driven by price increases (gross margins of premium liquors/mid-range liquors/low-grade liquors increased by 3.4/2.3/4.0 pct, respectively) and high-end products grew faster than overall. In 23Q2, the sales expense rate/management expense rate/tax ratio changed +6.2/+1.5/-2.9 pct, respectively, and the financial expense ratio was basically the same.
The first half of the year was for the promotion of standard products. Promotion fees increased sharply by 146.6% to 300 million yuan. Total management expenses were basically the same as in the same period last year, and the reduction in revenue scale led to a slight increase in the management rate. The 23Q2 return net interest rate was -19.25%, down 16.8 pct from the previous year. The company firmly promoted the divestment of the real estate business, completed debt-for-equity swaps and partial asset sales in the first half of the year, and publicly listed and transferred the subsidiary's shares on the Beijing Property Exchange. Profit certainty is expected to increase after further focus on the main business.
Investment suggestions: The company's revenue is expected to be 115.8/126.6/14.52 billion yuan in 23-25, with a year-on-year growth rate of -0.9%/9.4%/14.6%, net profit of 1.2/63/8.1 billion yuan, a year-on-year growth rate of 117.9%/421.0%/28.4%. The current price corresponds to 23-25 PE of 151.81x/29.14x/22.69x, maintaining a “buy” rating.
Risk warning: repeated risks of the epidemic, new product promotion falls short of expected risks, and Baiguji's sales fall short of expectations