李渡高增释放潜力，增长务实平稳过渡。上半年收入/经调整净利润同增17.5%/26.9%，增长务实，符合预期。分品牌看，珍酒/李渡/湘窖/开口笑分别同增17.2%/37.9%/2.4%/1.6%。其中，珍酒品牌量/价分别增长7.9%/8.6%，判断系珍十五放量，叠加珍30 及真实年份酒提速贡献。李渡量/价分别同增30.2%/5.9%，占比提升2.4pcts 至16.3%，判断系省内加快中档酒布局，省外市场铺货贡献。湘窖及开口笑主要系去年基数较高致增速放缓。上半年高端/次高端/中低档酒收入分别同比+17.9%/+32.6%/+2.7%，次高端及以上产品增长较好。分渠道看，24H1 末经销商/体验店/零售商数量较23 年末+169/-119/+49 家，主要系公司持续优化渠道结构，清退部分低质体验店所致。Matters:
The company announced its 2024 mid-year report. Total revenue for the first half of 2024 was 4.13 billion yuan, an increase of 17.5%; net profit to mother/non-GAAP net profit was 0.75/1.02 billion yuan, respectively, -52.6%/+26.9% year-on-year. Net cash flow from operating activities was $0.57 billion, an increase of 166.2% over the same period.
Commentary:
Li Du's high growth unleashed his potential, and his growth was a pragmatic and smooth transition. Revenue/adjusted net profit for the first half of the year increased by 17.5%/26.9%, which is pragmatic and in line with expectations. By brand, Zhenjiu/Li Du/Xiangjiao/Kaijiao/Kaijiao increased by 17.2%/37.9%/2.4%/1.6%, respectively. Among them, the volume/price of fine wine brands increased by 7.9%/8.6%, respectively. Judging by the sum of the volume of Zhen15, and the acceleration of real vintage wine. Li Du's volume/price also increased by 30.2%/5.9% respectively, accounting for an increase of 2.4 pcts to 16.3%. The judgment was that the province's speeding up the layout of mid-range wine and the distribution of goods in markets outside the province contributed. The main reason for Xiang Jiao is that the growth rate slowed down due to a high base last year. In the first half of the year, the revenue of high-end, and sub-high-end wine was +17.9%/+32.6%/+2.7%, respectively, and sub-high-end and above products grew well. By channel, the number of dealers/experience stores/retailers at the end of 24H1 was +169/-119/49 at the end of 23, mainly due to the company's continuous optimization of the channel structure and removal of some low-quality experience stores.
The cost of structural upgrade was optimized, and the adjusted net interest rate continued to increase. The company's gross margin increased by 0.9 pct in the first half of the year. Among them, the gross margin of the Shanzhen Liquor brand increased by 1.2 pcts, which was a significant increase, mainly due to the contribution of Zhen30 and actual vintage wine, compounded by the gradual introduction and dilution of the cost of self-produced base wine. In terms of cost ratio, the sales expense ratio decreased by 1.2 pcts in the first half of the year, mainly due to improvements in sales personnel efficiency and cost investment efficiency. The management cost ratio increased by 0.9 pct year-on-year, mainly due to the expansion of R&D personnel, depreciation in the Lidu Zhengjiashan factory area, and an increase in management consulting expenses. Net profit attributable to mother decreased by 52.6%. Judged to be due to the shift of some claims to equity and disturbing the profit base after listing last year. After adjustment, net profit also increased by 26.9%, net interest rate increased by 1.8 pcts to 24.6%, and profit continued to rise. The company's net operating cash flow was 0.57 billion yuan, an increase of 166.2% over the same period. The advance payment at the end of the period was 1.79 billion yuan, down 0.06 billion yuan from the previous month. Dealers are still willing to repay and have enough energy.
The foundation was laid in the first half of the year, and the increase was even more sufficient in the second half of the year. The company operated pragmatically in the first half of the year. The product side continued to optimize the structure, launch Zhenfeast, Li Duwang expansion scenarios and regional increments; the channel side added a dual channel strategy, and Zhen30 set up a separate division to speed up the introduction of distribution channels; the high-end wine division further divided the five major battle zones to focus on cultivating excellent merchants; the marketing side strengthened experience upgrades and created the “National Treasure” IP. A total of 117 events were held, continuing to enhance the brand style. Looking ahead to the second half of the year, there is more room for growth. First, organizational restructuring lays the foundation for healthy management. The division division is more clear, the sales team survives the fittest, and the combat effectiveness has improved markedly. Second, product-side expansion promotes new contributions. Zhen15 and Zhen30 may be revitalized to drive growth, Zhen30's distribution channels unleash potential increases, and Li Duwang and Zhenyan's new products contribute additional increases. Third, regional collaboration explores growth potential.
The strength of rare wine in the Guangdong and Hunan markets is expected to achieve high growth, and Lidu's accelerated layout around the Jiangxi region contributes to an increase.
Investment advice: The pace is low and high, the goals for the whole year remain unchanged, and maintain a “strong” rating. The company focused on organizational and product structure optimization in the first half of the year, laying a healthy foundation. With more effort in the second half of the year, there was more room for growth, and there is still strong certainty that the annual target will be achieved. Considering the gradual use of self-produced base wine, cost dilution after gradual use, superimposed channel efficiency improvements, and profit flexibility may be released at an accelerated pace. We maintain the 2024 EPS forecast of 0.6 yuan, take into account the company's higher growth quality, slightly adjust the 2025 and 2026 EPS forecasts to $0.71 and $0.82 (originally $0.74 and $0.91), maintain the target price of HK$14, and maintain the “strong push” rating.
Risk warning: Consumption recovery is slowing down, competition in the soy sauce industry is intensifying, and channel investment falls short of expectations.
