24-year revenue of 5.217 billion yuan (+5.32%); net profit to mother of 1.341 billion yuan (+5.69%). 24Q4 revenue was 1.429 billion yuan (+4.68%); net profit to mother 0.216 billion yuan (-12.30%). 25Q1 revenue of 0.959 billion yuan (+2.74%); net profit to mother 0.19 billion yuan (+2.15%).
The company has built a dual brand system of “Shuijing Square” and “First Square” to strengthen channel management and core market cultivation. Core single products have grown in double digits. Brand upgrades focus on long-term development, and performance growth is steady and progressive.
The release of core products drives the upgrading of the product structure and establishes the “Gemini” strategy.
1) By product: The revenue of high-end wine/mid-range wine in '24 was 4.764 billion yuan/0.264 billion yuan, +1.99%/+28.78%, respectively. 25Q1 high-end wine/mid-range liquor revenue was 0.851 billion yuan/0.049 billion yuan, +6.71%/-34.21%, respectively. Zhenjiu No. 8 has excellent performance, and the product structure continues to be upgraded.
2) Market by market: The company achieved revenue of 4.97/0.058 billion yuan domestically and overseas respectively in 24 years, +2.79%/+44.60% compared with the same period last year. The net increase in domestic dealers in '24 was 6 to 56, and the number of foreign dealers was 5. 25Q1 domestic revenue was 0.898 billion yuan (+4.30%), foreign sales expenses were reduced by 0.002 billion yuan (-84.35%), and channel management continued to be refined.
1) The 24-year gross and net margin was -0.4/+0.09pct to 82.76%/25.71%; 25Q1 gross and net margin was +1.5/-0.12pct yoy to 81.97%/19.84%.
2) The 24-year sales/management expense ratio was -0.13/+0.89pct to 25.06%/8.20% year over year, and -7.56/-0.49pct yoy to 27.50%/9% in 25Q1, respectively. By the end of 2024, the number of new stores opened by the company surpassed 0.01 million.
3) The contract debt at the end of 25Q1 was 0.936 billion yuan, -0.013 billion yuan month-on-month, and -0.215 billion yuan year-on-year.
4) 25Q1 sales revenue of 0.732 billion yuan (-21%), net operating cash flow -0.576 billion yuan (-463.23%).
Profit forecasting and valuation
Considering that the company built a dual brand in '25, and there may be an increase in cost investment, we slightly lowered the company's revenue growth rate to 4% and 5% from 2025 to 2026, and slightly lowered the growth rate of net profit to mother to 4% and 7% (YoY, same below), and forecast revenue and net profit growth rates of 7% and 10% respectively in '27. The current stock price is 16 times the 25-year PE. Maintain a buy rating.
Catalysts: Liquor demand recovery exceeded expectations; banquet recovery performance exceeded expectations; batch prices continued to rise.
Risk warning: Consumption recovery falls short of expectations; demand for high-end liquor falls short of expectations.
