Revenue growth was steady, profit flexibility was released, and in the first three quarters of 2024, Jinhui Liquor achieved operating income of 2.33 billion yuan, +15.3% year over year; net profit to mother was 0.33 billion yuan, +22.2% year over year; of these, Q3 achieved operating income of 0.57 billion yuan, +15.8% year on year, net profit of 0.038 billion yuan, and net profit of 0.038 billion yuan year on year. The company's profit is flexible. We maintain our profit forecast for 2024-2026. We expect net profit to be 0.4 billion yuan, 0.49 billion yuan, and 0.6 billion yuan respectively for 2024-2026, +20.7%, +24.0%, and +22.3% year-on-year, and EPS is 0.78 yuan, 0.97 yuan, and 1.19 yuan respectively. The current stock price corresponds to PE 27.9, 22.5, and 18.4 times, respectively. The company has always focused on the market foundation and firmly adjusted products The structure and revenue are growing steadily. At the same time, with structural upgrades, the company's net profit elasticity is expected to continue, maintaining the “gain” rating.

The product structure continues to be optimized, and high-end products perform well

In the first three quarters, more than 300 yuan/100-300 yuan/less than 100 yuan achieved 0.47/1.2/0.6 billion yuan respectively, +43.8%/+15.0%/-2.54% year-on-year respectively. During the Q3 period, revenue of more than 300 yuan/100-300 yuan/100 yuan or less was 0.16/0.31/0.08 billion yuan, respectively, or +42.1%/+14.9%/-24.3% compared with the same period last year. The company's high-end products are still better than the industry's performance is mainly due to the ongoing upgrading trend in the northwest, the company's marketing transformation, active participation in government and business activities, and the focus of resources is on high-end investment.

Growth outside the province is higher than within the province, and the Gansu market continues to cultivate provincially

In the first three quarters, both within and outside the province achieved 1.72/0.55 billion yuan, +13.9%/+15.7% year-on-year. Q3:0.37/0.17 billion yuan in and outside the province, respectively, +4.4%/+37.9% year-on-year. Under a high base within the province, good growth has been achieved through structural upgrades. New markets outside the province, such as East China and North China, continue to attract investment, and the original market is deeply cultivated and settled around the Gansu market, and the growth rate is very fast.

Expense investment entered the harvest period, and profit flexibility gradually became apparent

Q3 The company's gross margin decreased by 1.52 pct. Although the product structure was improved, some of the market expenses such as giveaways were included in the cost, which affected gross margin performance. Q3 The company's sales expense ratio/management expense ratio/financial expense ratio changed year-on-year by -3.19/-1.81/+0.37pct. Early market and personnel investment gradually showed results. As the share of high-end products increased and profit flexibility became apparent, the Q3 net interest rate increased sharply by 2.9 pct.

Risk warning: Macroeconomic fluctuations have led to a decline in demand, and expansion outside the province falls short of expectations, etc.