[Performance] 2024H1 is expected to achieve revenue of about 1 billion yuan, about -35.12%; realized net profit of 0.11-0.13 billion yuan, down 73.93% to 69.19% year on year; realized net profit deducted from non-mother 0.11-0.13 billion yuan, down 73.59% to 68.79% year on year.

2024Q2 is expected to achieve revenue of around 0.506 billion yuan, -12.26% year over year; realized net profit attributable to mother 0.037-0.057 billion yuan, -69.92% to -53.50% year over year; realized net profit without return to mother 0.04-0.06 billion yuan, -65.57% to -48.57% year over year.

Q2 Internal revenue returned to normal, leading to a month-on-month improvement on the revenue side. 24Q2 is expected to achieve revenue of around 0.506 billion yuan, or -12.26% year over year. The revenue decline is expected to narrow significantly compared to Q1. It is expected that the main factors are: ① Q2 returns to normal delivery, and the Jiachen version is successfully introduced; ② Hongtan and China products continue to contribute to positive momentum and successfully open up the banquet market. The company continues to promote inventory removal by increasing investment in banquets and accurately investing in consumer expenses. Prices for large individual products in Hongtan and Naisen (Jiachen Edition) are strong, and channel confidence is gradually recovering.

Strengthen the pre-investment of consumer development expenses, putting pressure on the profit side. 24Q2 is expected to achieve net profit of 0.037-0.057 billion yuan, -69.92% to -53.50% year-on-year. The profit side's performance is weaker than that of the revenue side. It is mainly expected that: ① The performance of high-end and popular alcoholic series and domestic products in Q2 was relatively strong, leading to an increase in the company's gross margin; ② Q2 In order to promote marketing, strengthen consumer cultivation, and create a market atmosphere, the company's sales expenses were invested in advance, leading to an increase in the company's sales expenses ratio.

Reforms continue to be deepened, and we look forward to an inflection point in management. In '24, I am optimistic about the resilience of performance recovery brought about by the release of reform dividends. Considering that in '24, the company was still in the marketing model transformation stage and commercial consumption of liquor was relatively weak, we lowered our profit forecast. The company's revenue for 24-26 is 2.43/2.71/2.99 billion yuan (previous value was 3.08/3.47/3.85 billion yuan), and net profit to mother is 0.39/0.47/0.55 billion yuan respectively (the value was 0.6/0.73/0.86 billion yuan 24-25 years ago), corresponding PE is 34.3X/ 28.6X/24.7X, maintaining a “buy” rating.

Risk warning: If overall competition in the industry intensifies; consumer demand falls short of expectations; cost reforms fall short of expectations; nationalization expansion falls short of expectations; competition in the Hunan market intensifies; performance forecasts are only preliminary calculations, subject to the company's semi-annual report.