Vats Liquor Chain Store Management Joint Stock Co Ltd

Huazhi Liquor Chain released its semi-annual report, with revenue of 3.249 billion yuan, down 17.72% year on year, and a net loss attributable to the parent of 73 million yuan, down 230.67% year on year, marking its first interim loss in over a decade. The loss mainly stemmed from a back-tax payment of 127 million yuan. Excluding that impact, non-GAAP net profit was 39 million yuan, up 18.72% year on year. The company's baijiu business gross margin was only 6.53%, down 2.17 percentage points year on year, compared with a gross margin as high as 22.9% in the same period of 2021. To cope with the industry adjustment, Huazhi Liquor Chain proactively scaled back purchasing, with prepayments down 49.31% year on year and inventory down 42.13% year on year. Meanwhile, it opened 173 new stores, bringing the total to more than 2,000, and stepped up investment in instant retail as it transforms into a liquor terminal service provider.