On June 30, 2024, Alcoholic Liquor held the 2023 Annual General Meeting of Shareholders.

Key points of investment

Focus on products and stabilize the value of high-end products

In terms of internal reporting, the company steadily increased brand value after launching the Jiachen edition. Q1 Company actively controlled the inventory and sales of the old version and promoted the gradual transformation of new and old products. Currently, the price of the Jiachen edition is basically stable, and the price of the old version has clearly rebounded. In terms of the Alcoholics series, we insist on creating major products from the Red Temple, promote focused production in the banquet market within the province, promote a product portfolio focusing on Red Tan, and gradually increase the penetration rate of Red Tan from outside the province; currently, a series of policies such as further education banquets have been introduced. In addition, domestic products are also growing rapidly in the banquet scene. Last year, more than 10,000 banquet events were held in Changsha, which is in line with the current trend of rising prices and undertakes part of the increase in sales.

Focus on the region and focus on the penetration of the banquet scene

In terms of regional focus, focus on the province and firmly establish a good base market in Hunan Province. More than half of the people in the province focus on Hongtan; focus on model cities outside the province, focus on people, energy, and products. In terms of channel reform, while adhering to cost reform, we guarantee dealer profits, and continue to refine and strengthen customer and product tracking and execution. In the past year, the company invested heavily in banquets, promoting banquet development in terms of consumer rewards, cigarette hotel rewards, and code scanning activities. Core store development and construction, bottle code scanning, and banquet sales have all increased, and channel reform results have been shown. At present, the in-house customer base has been optimized to 400+, and the company continues to develop high-quality dealers to improve the customer quality rate.

Profit forecasting

We are optimistic that the company will continue to push forward cost reforms, putting pressure on short-term performance in exchange for long-term growth. Domestic pricing has shown a strong high-end brand power, and the acceleration of Hongtan Marketing will reflect an increase in the influence of the next high-end. We expect the company's 2024-2026 EPS to be 1.50/1.83/2.25 yuan respectively, and the current stock price corresponding to PE is 29/24/20 times, respectively, maintaining a “buy” investment rating.

Risk warning

Downward macroeconomic risks, domestic revenue growth falling short of expectations, expansion outside the province falling short of expectations, and the volume of Red Tan falling short of expectations.