Incident: On August 21, the company issued the “2024 Interim Results Announcement”. The company achieved revenue of 4.133 billion yuan (+17.5%) in 2024H1, realized net profit (IFRS) of 0.752 billion yuan, and adjusted net profit (non-IFRS) of 1.018 billion yuan (+26.9%).

All of the company's brands have achieved positive growth, with steady growth in core products. Among them: Zhenjiu achieved revenue of 2.702 billion yuan (+17.2%), with tonnage price and gross margin up 8.6% and 1.2 pct, respectively; Li Du achieved revenue of 0.675 billion yuan (+37.9%), increasing tonnage price and gross margin by 5.9% and decreasing 2.0pct year over year, respectively; Xiangjiao achieved revenue of 0.452 billion yuan (+2.4%), and tonnage and gross margin decreased by 0.2% and 1.4 pct, respectively; opened up and laughed, achieved revenue of 0.224 billion yuan (+ 1.6%), tonnage price and gross margin increased 15.2% and 3.2 pct, respectively, year on year. The growth of the Zhen 15, Zhen 30, and high-end light bottle series, and the completion of channel switching by Zhen 30 were the main reasons for the increase in the first half of the year. The recently established Zhen 30 division marked a new stage in the layout of major core products. In the face of overall pressure on the industry, Li Du's sales performance increased by 30.2% in the first half of the year. Penetration outside Jiangxi Province is gradually improving, and real estate wine with potential for pan-nationalization is worth paying attention to.

Investment advice: As the third largest private liquor company, the company operates four major liquor brands across flavors, has established a three-tier growth engine with a complete product matrix, and is currently the target for scarce soy wine.

The company's management has been deeply involved in the liquor industry for a long time, and has excellent management and marketing capabilities. In recent years, it has achieved outstanding growth in line with the structural development of the industry, and is expected to continue to benefit from high-end and flavor dividends under increased concentration, and performance growth is highly certain. After the listing and financing, the company's current production capacity bottleneck is expected to be broken through in the next few years, superimposed brand potential will gradually be released, gross margin and cost ratio are expected to be further improved, and profitability will enter a positive cycle. We predict that the company's 24-26 EPS will be 0.59, 0.75, and 0.91 yuan/share, respectively, and the corresponding PE will be 11.7x, 9.3x, and 7.7x, respectively, giving it a “buy” rating.

Risk warning: Consumption recovery falls short of expectations; price trends fall short of expectations; food safety issues; risk of market fluctuations; consumption tax policy may change.