Incident: On May 20, 2024, the company announced a shareholders' share transfer plan through a bulk transaction. Huachuang Xinrui (Hong Kong) Co., Ltd. (current shareholding ratio is 11.16%) plans to reduce its holdings by no more than 8 million shares through bulk transactions, within 3 months (including the date of expiration of 3 months) after 15 trading days from the date of public disclosure of this holdings reduction plan.
Huachuang Xinrui (Hong Kong) Co., Ltd. holds 136,116,296 shares of Shanxi Fenjiu Company, accounting for 11.16% of the company's total share capital, and is a shareholder holding more than 5% of the company's shares. Among them: China Resources Venture Co., Ltd. (hereinafter referred to as “China Resources Venture”) holds 80.62% of Huachuang Xinrui's shares, and China Resources Venture Capital Fund Phase I (limited partnership) (hereinafter referred to as “Lianhe Fund”) holds 19.38% of Huachuang Xinrui's shares. According to the relevant cooperation agreement with Lianhe Fund, it is facing an arrangement where the fund expires and withdraws, and it is necessary to reduce its indirect holdings of the company shares.
On February 4, 2018, Fenjiu Group Co., Ltd., the controlling shareholder of Shanxi Fenjiu Company, plans to transfer its total of 99.15 million A-shares of Shanxi Fenjiu to Huachuang Xinrui through an agreed transfer. Huachuang Xinrui will hold 11.45% of the listed company's shares. The transfer price for each share in this transaction was RMB 52.04, and the total transfer price of the underlying shares was RMB 5.16 billion. After this transaction, Huachuang Xinrui became the second-largest shareholder of Fenjiu, Shanxi.
Huachuang Xinrui plans to reduce its holdings by no more than 8 million shares, with a reduction ratio of no more than 0.6558%. Huachuang Xinrui is still the second largest shareholder of Fenjiu, Shanxi with 10.50% of the shares. This holdings reduction plan will not change China Resources Venture's firm confidence in the company's future development prospects and high recognition of the company's long-term value. China Resources Venture will continue to hold shares in the company through Huachuang Xinrui, and there are no plans to reduce its holdings in the company.
The company adheres to brand building, keeps a close eye on terminal maintenance, and takes deep channel and consumer reach as the focus of marketing work. Continuously improve the product structure, with the 10 billion product Blue and White 20 as a breakthrough; Blue and White 30 will separate product packaging from Blue and White 20 to strengthen marketing and promotion; as a basic product, Bofen will maintain reasonable supply in the fragrance cultivation market; Lao Baifen and Panama will adapt to the current economic environment. Among them, Lao Baifen will upgrade its products for the banquet market, which is expected to usher in high growth.
Profit forecast and investment advice: Optimistic that the company will continue to optimize market management, add new marketing momentum, enhance brand value, and focus on quality breakthroughs. It is expected to achieve growth of about 20% throughout the year. We expect to achieve revenue of 386.33/463.60/551.69 billion yuan in 24-26, net profit of 13.4.65/165.84/20.84 billion yuan, corresponding to a PE value of 23.97/19.46/16.07x, maintaining a highly recommended rating.
Risk warning: risk of macroeconomic growth falling short of expectations; risk of increased industry competition; risk of food safety.