Shares of ZJLD (06979) have risen more than 6% once again. At the time of writing, the stock was up 5.01% to HK$7.97, with a turnover of HK$183.35 million.
The increase follows recent positive developments. The company's Chairman, Wu Xiangdong, previously announced in a live broadcast that the strategic flagship product "Da Zhen · Zhen Jiu" achieved over 1 billion yuan in collections within 300 days of its launch. During a period of deep industry adjustment, this product not only delivered a phenomenal performance but has also maintained sales at or above suggested retail prices, serving as a positive case study in a counter-cyclical environment.
Concurrently, the company's "Wan Shang Lian Meng" (Ten Thousand Merchants Alliance) has been operational for one year, with over 4,300 signed alliance merchants covering 31 provinces and 280 cities across the country.
Brokerage Analysis and Outlook
Huachuang Securities released a research note stating that, based on recent channel feedback, the company's actual operational performance is likely better than expected.
The brokerage's analysis points to improvements on both the top and bottom lines. On the revenue side, the decline in the core Zhen Jiu traditional business is expected to narrow more than anticipated, supported by steady growth from the Li Du and Kai Kou Xiao brands. This is projected to result in a mid-single-digit percentage decline in revenue for the first half of the year.
Regarding profitability, structural improvements in gross margin combined with optimized expense ratios are expected to drive the net profit margin close to 20% in the first half. For the full year, the company is anticipated to achieve double-digit growth.
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