Performance: 2024Q3's operating income/ net profit attributable to mothers/ net profit net profit after deducting non-return to mother was 2.637/0.624/0.628 billion yuan, respectively (+10.11%/+6.61%/+7.33% year-on-year).

The middle and high-end product structure is still stable, and the growth rate of Class A+ is the highest. 24Q3 The company's liquor business revenue 26.

2.6 billion yuan (+10.29% year over year), of which: Special Class A+ (factory price 300 yuan+ product) /Special Class A (factory price 100-300 yuan) /Class A, Class B, Class C+D, and others achieved revenue of 18.13/6 respectively.

46/1.09/0.041/0.017/0.0007 billion yuan (YoY +11.70%/+9.55%/+7.74%/-11.86%/-17.80%/-29.13%).

The growth rate within the province has slowed slightly, and the quality of channels outside the province continues to improve.

① On the market side, 24Q3 revenue was 2.423/0.204 billion yuan (+9.32%/+23.04%), with revenue of Huaian/ Nanjing/ Southern Sun/ Central Su/ Yancheng region/ Huaihai region/ 6.60/4.99/3.87/0.355/0.288/0.232 billion yuan (YoY +10.10%/+8.24%/+12.89%/+9.03%/+6.68%). The growth rate of the Nanjing/Huaihai/Southern Jiangsu region within the province was lower than the overall growth rate; growth outside the province continued to be high.

② In terms of channels, the 24Q3 company's dealers changed +105 to 1193, and the average dealer size in and outside the province changed -10.94%/+23.86% year over year, and the quality of distributors outside the province improved markedly.

Profit margins are under pressure, and advance receipts have declined markedly. The 24Q3 company's gross margin/net margin was -5.14/ -0.78 percentage points year-on-year to 75.59%/23.68%, respectively; the net interest rate was also affected by changes in fair value (+0.70pct of revenue) and a decrease in interest income (-0.27pct of revenue).

24Q3 sales expense ratio/ management expense ratio was -3.90/+0.46 percentage points to 20.56%/4.57%; 24Q3 operating cash flow -16.85% to 0.983 billion yuan; 24Q3 contract liabilities were -58.50%/-13.31% yoy to 0.544 billion yuan, respectively.

Investment advice: We believe that the company still has plenty of room for deep cultivation within the province. The market outside the province is expanding at an accelerated pace under a low base, and the overall performance is showing a steady growth trend. According to the Q3 quarterly report, slightly adjusted profit forecasts, the company's revenue for 24-26 is expected to be 11.7/13.3/15.1 billion yuan (12.363/15.021/17.837 billion yuan before 24-26), with growth rates of 16%/13%/13%, respectively; net profit to mother is 3.6/4.1/4.6 billion yuan (previous value of 3.801/4.593/5.45 billion yuan 24-26), respectively, with growth rates of 15%/ 13%/13%, corresponding to 24-26 PE is 15X/14X/12X, maintaining a “buy” investment rating.

Risk warning: Competition in the industry intensifies; consumer demand falls short of expectations; macroeconomic recovery falls short of expectations; growth outside the province falls short of expectations; growth of core products falls short of expectations, etc.