Key points of investment

Incident 1: The company released a semi-annual performance forecast for 2024. 24H1 is expected to achieve net profit of 10-15 million yuan and net profit to mother of 37.81 million yuan in the same period of the previous year, turning a loss into a profit; 24H1 is expected to achieve net profit of 3-4.5 million yuan after deducting non-return to mother net profit, and 42.62 million yuan after deducting non-return net profit for the same period last year. According to calculations, 24Q2 is expected to achieve net profit of -764 to -2.64 million yuan, and net profit to mother of 3.35 million yuan for the same period of the previous year; net profit deducted from non-return to mother is expected to be 1184 to -10.34 million yuan, and net profit of non-return to mother is 0.075 million yuan for the same period of the previous year.

Incident 2: Company director Mr. Hou Xiaohai intends to discontinue his duties as a director of the 7th board of directors of the company and a member of the board's strategy committee and remuneration and assessment committee. It was agreed to nominate Mr. Zhao Wei as a candidate for the 7th board of directors of the company as a non-independent director.

There was a slight loss in 24Q2, and the results fell short of expectations. The company lost a small amount of money in the second quarter. Based on the median value, it is expected to achieve net profit of 5.14 million yuan in 24Q2, and another loss after 4 consecutive quarters of profit. The company's revenue scale is small, and the scale effect is not obvious. New products such as Fuhexiang are still in the investment period. At the same time, the second quarter is a low season, industry demand is weak, and revenue is expected to slow down. 2024 Gold Seeds will continue to carry out market actions according to the “6+3+2” strategy. The Fuhexiang series highlights Fuhexiang 9+ Fuhexiang 7, cultivate Fuhexiang 20, the light bottle series, highlight the top seed+Tegon, improve the light bottle wine mix, the chassis box, focus on soft +gold 6, and cultivate soft masters. On the channel, they fought an offensive battle with 0.01 million in-depth cooperative Top Tobacco Hotels, and Lightbottle cooperated 0.06 million popular restaurants in a position battle.

The directors were replaced, and Zhao Wei was nominated as a candidate for the board of directors. Company director Hou Xiaohai plans to stop serving as a director of the 7th board of directors of the company and nominate Mr. Zhao Wei as a non-independent director candidate for the 7th board of directors of the company. Zhao Wei joined Tianjin Huarun Brewery Co., Ltd. as an assistant financial director in 2003. He has successively held positions such as general manager of China Resources Snowflake's fund management department, general manager of the management accounting and statistics department, and director of the finance department. Since June 2, 2023, he has been the chief financial officer of China Resources Brewery (Holdings) Co., Ltd. Previously, Hou Xiaohai also withdrew from the boards of directors of Jinsha Liquor and Jingzhi Liquor, which is expected to be a normal change.

Investment advice: After 22 and 23 years of adjustments, the company has experienced positive changes from top to bottom. Combined with the latest performance forecast, the company's revenue for 24-26 is expected to be 1.59/1.77/2.22 billion yuan, with a year-on-year growth rate of 7.9%/11.5%/25.8%, and net profit to mother of 0.06/0.13/0.36 billion yuan, respectively. The year-on-year growth rate is 369.7%/117.6%/176.6%. It is recommended to pay attention and maintain the “increase” “Hold” rating.

Risk warning: competition in the provincial market intensifies; new product development falls short of expectations; reform results fall short of expectations