Jiangsu Yanghe Distillery (002304) H2 2023 earnings summary

Executive summary

• 2023 revenue reached CNY33.126bn, up 10.04% YoY; net profit attributable to shareholders was CNY10.016bn, up 6.8%.

• Growth continued amid Baijiu industry adjustments; management emphasized brand building, quality upgrades, market expansion and operating efficiency.

• 2024 revenue growth target: 5%–10% YoY, supported by differentiated brands, channel expansion and product-mix improvement.

Financial highlights

• Operating revenue was CNY33.126bn vs CNY30.105bn in 2022; Baijiu revenue was CNY32.390bn, up 10.40%.

• Net profit attributable to shareholders was CNY10.016bn; adjusted for non-recurring items, it was CNY9.843bn, up 6.10% YoY.

• Consolidated net profit was CNY10.021bn; total profit before tax was CNY13.218bn and income tax expense was CNY3.197bn.

• Operating cash flow rose 68.06% to CNY6.130bn; cash and cash equivalents increased CNY1.182bn to CNY25.201bn.

• Selling and distribution expenses rose 28.90% to CNY5.387bn, mainly reflecting advertising and promotion expense up 43.34% to CNY3.461bn.

Outlook and guidance

• 2024 operating revenue growth target is 5%–10% YoY; strategy prioritizes dual famous liquor brands, multiple brands and categories, and high-quality development.

• Priorities include expanding beyond Jiangsu, deepening home-market distribution, upgrading flagship-product mix, strengthening product quality and improving marketing efficiency.

• Quality and efficiency plans include building high-end base-liquor reserves, advancing smart supply-chain and energy platforms, and reducing energy consumption.