During the industry's deep adjustment period, multiple liquor companies are actively seeking transformation to navigate through the new cycle.
In the first half of 2025, under the influence of insufficient macro demand and other factors, competition among top baijiu companies intensified, with the industry overall showing characteristics of "volume contraction and price decline, high inventory pressure, and consumption differentiation." The deep adjustment trend became increasingly apparent, affecting the performance of listed baijiu companies broadly.
During the same period, the combined revenue and net profit attributable to parent companies of 21 A-share and Hong Kong-listed baijiu companies totaled approximately 242.3 billion yuan and 95.1 billion yuan respectively, both showing slight year-over-year declines. Among them, some companies' net profits attributable to parent companies hit new lows for the same period since 2018.
Meanwhile, baijiu industry production continued to decline. According to data released by the National Bureau of Statistics, from January to June 2025, cumulative production of baijiu (standardized to 65% alcohol content, commercial volume) by above-scale enterprises reached 1.916 million kiloliters, down 5.8% cumulatively.
From a profitability perspective, in the first half of 2025, among the aforementioned baijiu companies, 14 companies saw year-over-year declines in net profit attributable to parent companies, accounting for over 60%. By quarter, in Q2, among 20 A-share baijiu companies, 15 saw year-over-year declines in net profit attributable to parent companies, with 8 declining by over 50% and 4 declining by over 140%.
Among the top five baijiu companies, in Q2, Kweichow Moutai Co.,Ltd. (600519.SH) maintained single-digit growth in net profit attributable to parent companies, while the other four companies all experienced varying degrees of year-over-year declines.
China Merchants Securities noted in its research report that in Q2 2025, the baijiu industry accelerated its clearance process, with second and third-tier enterprises undergoing relatively thorough clearance, while leading enterprises showed stronger resilience but still needed to clear market burdens.
Amid widespread performance declines, some baijiu companies have shown positive signals in their financial data: Shede Spirits Co.,Ltd. (600702.SH), which took the lead in clearing its balance sheet, saw its Q2 net profit attributable to parent companies increase by over 100% year-over-year. In the first half of the year, six companies achieved year-over-year growth in contract liabilities, with Jiangsu Yanghe Distillery Co.,Ltd. (002304.SZ) seeing nearly 50% growth in contract liability amounts.
Facing deep industry adjustment, multiple baijiu companies are actively seeking change, implementing measures such as expanding new consumption scenarios, developing new products, entering the low-alcohol liquor track, and promoting manufacturer-dealer benefit communities, hoping to navigate through the new industry cycle. Meanwhile, led by Kweichow Moutai and Wuliangye Yibin Co.,Ltd. (000858.SZ), multiple baijiu companies are accelerating international expansion, with significantly enhanced strategic focus and execution intensity.
Regarding the subsequent performance of baijiu companies, multiple institutions maintain relatively cautious attitudes.
CITIC Securities believes that based on current recovery conditions of consumption scenarios, adjustment pace of leading liquor companies, and channel inventory price conditions, the second half of 2025 is expected to be the period with the steepest decline slope for most liquor companies' financial performance.
"Under multiple factors of insufficient demand and industry adjustment, the baijiu industry is expected to continue its deep adjustment trend in the second half of 2025. Except for some leading companies, many liquor companies still face pressure from high inventory, price inversion, and weak consumer demand," said Cai Xuefei, General Manager of Zhiqu Consulting and liquor industry analyst. From an anti-pressure perspective, against the backdrop of intensified competition, leading liquor companies with strong brand moats, efficient channel control capabilities, and forward-looking strategic layouts are more likely to navigate through the cycle.
**Performance Under Widespread Pressure**
During the industry adjustment, multiple baijiu companies experienced double declines in revenue and net profit in the first half of the year, with profitability significantly under pressure in Q2.
In the first half of 2025, among 21 A-share and Hong Kong-listed baijiu companies, the number of companies with year-over-year declines in revenue and net profit attributable to parent companies were 15 and 14 respectively, significantly increased from 7 and 9 in 2024.
During the same period, among the top five baijiu companies: Kweichow Moutai, Wuliangye, and Shanxi Xinghuacun Fen Wine Factory Co.,Ltd. (600809.SH) maintained year-over-year growth in revenue and net profit attributable to parent companies, but growth rates slowed compared to 2024; Luzhou Laojiao Co.,Ltd. (000568.SZ) and Jiangsu Yanghe Distillery saw year-over-year declines in both revenue and net profit attributable to parent companies.
As the leading baijiu company, Kweichow Moutai's revenue and net profit attributable to parent companies in the first half of 2025 were 89.389 billion yuan and 45.403 billion yuan respectively, with year-over-year growth rates of 9.1% and 8.89%, significantly down from 15.71% and 15.38% in 2024.
Substantial increases in operating costs and sales expenses eroded the company's net profit. During the same period, Kweichow Moutai's operating costs increased 15.21% year-over-year to 7.777 billion yuan, and sales expenses increased 24.56% year-over-year to 3.26 billion yuan, both growing faster than the company's revenue growth rate.
Kweichow Moutai had already shown concern about the industry in its 2024 annual report. Facing downward pressure in the baijiu industry, the company's main target for 2025 was to achieve total operating revenue growth of around 9% compared to the previous year, marking the first time since 2016 that the company adjusted its annual revenue growth target to single digits.
Looking at single quarters, affected by industry downturn and other factors, baijiu company performance became increasingly challenging in Q2, with leading baijiu companies beginning to concentrate on balance sheet clearing.
In Q2, among 20 A-share baijiu companies, 15 saw declines in net profit attributable to parent companies, accounting for 75%. Among the top five baijiu companies, except for Kweichow Moutai, the other four all experienced year-over-year declines, with three companies declining by over 10%. Among them, Jiangsu Yanghe Distillery's net profit attributable to parent companies declined by over 60% year-over-year.
Wind data shows that from a longitudinal perspective, among the top five baijiu companies, Kweichow Moutai's 5.25% year-over-year growth rate in net profit attributable to parent companies in Q2 2025 was the lowest for the same period since 2016; the year-over-year growth rates of the other four companies all hit new lows for the same period since 2017.
During the same period, second and third-tier baijiu companies underwent more thorough balance sheet clearing. In Q2, Anhui Golden Seed Winery Co.,Ltd. (600199.SH), Beijing Shunxin Agriculture Co.,Ltd. (000860.SZ), Sichuan Swellfun Co.,Ltd. (600779.SH), and Jiugui Liquor Co.,Ltd. (000799.SZ) all saw year-over-year declines in net profit attributable to parent companies exceeding 140%, with the first three companies declining by over 250%.
As the only foreign-controlled baijiu enterprise, Sichuan Swellfun, under the impact of substantial year-over-year decline in Q2 net profit attributable to parent companies, saw this figure decline 57% year-over-year to 105 million yuan in the first half of 2025, far exceeding the 13% revenue decline.
"In the first half of 2025, the baijiu industry overall remained in a deep adjustment phase. Especially in Q2, traditional consumption scenarios such as business banquets and ceremonial events continued under pressure, with market recovery pace slowing," Sichuan Swellfun stated in its interim report. Under these factors, the company's revenue declined year-over-year in the first half, and due to the high gross margin of baijiu products, revenue decline had a more significant impact on profits.
**Who Will Stabilize First?**
Since 2024, the competitive squeeze in the baijiu industry has accelerated, with different adjustment paces among A-share liquor companies. Companies that proactively made substantial adjustments earlier may see performance recovery first, while those with later adjustment timing may experience relatively delayed recovery.
The top five A-share baijiu companies showed different adjustment paces. According to financial data, against the backdrop of intensified competition among baijiu companies, especially escalated homogeneous competition among leading premium liquor companies, from Q3 2024 to Q2 2025, Kweichow Moutai maintained year-over-year growth in net profit attributable to parent companies, though growth rates declined. Among other companies, Jiangsu Yanghe Distillery proactively made substantial business adjustments for four consecutive quarters, while the other three companies showed phased adjustment characteristics.
Market expectations suggest that among the top five baijiu companies, Jiangsu Yanghe Distillery, which underwent four consecutive quarters of adjustment, may recover first.
China International Capital Corporation believes that starting from Q3 2025, Jiangsu Yanghe Distillery enters a phase of relatively low base figures, with financial statements expected to improve significantly quarter-over-quarter. "The company's peak pressure period for Q2 performance decline may have passed, combined with committed dividend amounts for the next two years and attractive dividend yield, we recommend attention to allocation value."
Among A-share second and third-tier baijiu companies, 12 companies had revenue scales between 100 million and 10 billion yuan in the first half of 2025. Among these companies, three saw continuous year-over-year declines in net profit attributable to parent companies exceeding 30% during the four quarters from Q2 2024 to Q1 2025: Shede Spirits, Jiugui Liquor (000799.SZ), and Anhui Golden Seed Winery (600199.SH).
After continuous performance adjustments, these three companies showed different trends.
Shede Spirits, after four consecutive quarters of deep performance adjustment, took the lead in balance sheet recovery in Q2 2025. During this period, the company's revenue was 1.125 billion yuan, remaining basically flat year-over-year; net profit attributable to parent companies was 97.17 million yuan, surging 139.48% year-over-year, ranking first among A-share baijiu companies and reaching the highest level for the same period since 2022, marking the third time since 2017 that this figure achieved triple-digit growth for the same period.
Meanwhile, Jiugui Liquor and Anhui Golden Seed Winery continued to decline. In Q2 2025, both companies saw year-over-year declines in net profit attributable to parent companies exceeding 140%.
As a baijiu company under COFCO Corporation, Jiugui Liquor's performance began adjusting as early as 2022.
Wind data shows that in Q4 2022, Jiugui Liquor's net profit attributable to parent companies declined by over 50% year-over-year. From Q1 2023 to Q4 2024, the company's net profit attributable to parent companies continued declining, with decline rates exceeding 30% in all quarters except Q4 2023 (10% decline), and some quarters exceeding 100%.
"The company's performance has been under pressure for nearly two years, partly due to the baijiu industry being in a deep adjustment period with weak baijiu consumption and intensified industry competition. On the other hand, the company's marketing model transformation is still advancing, with increased C-end (consumer end) expense investment and strengthened terminal sales momentum. In the short term, dealer-end and actual terminal sales are not synchronized, and it takes time for terminal sales momentum to translate into company performance improvement," Jiugui Liquor management stated at a September 2025 investor communication meeting.
After phased performance adjustments, contract liabilities, an important indicator of baijiu companies' performance "reservoir," also showed different changes.
Wind data shows that in the first half of 2025, among 18 A-share baijou companies with revenue exceeding 100 million yuan, 12 companies saw year-over-year declines in contract liabilities, while 6 companies achieved year-over-year growth.
During the same period, among the top five baijiu companies, Kweichow Moutai's contract liabilities declined by over 40% year-over-year to 5.5 billion yuan, while the other four companies all achieved growth. Among them, Luzhou Laojiao, Jiangsu Yanghe Distillery, and Wuliangye saw year-over-year growth in contract liabilities of approximately 51%, 49%, and 24% respectively.
Regarding the decline in contract liabilities, Kweichow Moutai Director Wang Li stated at the company's 2025 interim performance briefing that during industry cycle adjustment, the company proactively enhanced channel resilience and built a channel ecosystem that weathers storms together, which is more conducive to promoting healthy market development.
Notably, after three quarters of adjustment, Jiangsu Yanghe Distillery's contract liabilities showed substantial growth. In the first half of 2025, Jiangsu Yanghe Distillery's contract liabilities were 5.878 billion yuan, growing nearly 50% year-over-year. During the same period, advance payments within the company's contract liabilities were 2.246 billion yuan, growing 124% year-over-year.
Industry insiders believe that Jiangsu Yanghe Distillery's substantial growth in advance payments indicates improving dealer confidence, and the company's proactive adjustment and channel benefit protection measures have gained dealer approval.
**Navigating Cycles Through Innovation**
During industry adjustment, multiple baijiu companies are actively seeking change, continuously introducing measures such as expanding new consumption scenarios, developing new products, entering low-alcohol liquor tracks, and creating ten-thousand merchant alliance models, hoping to navigate through the new industry cycle.
Against the backdrop of sluggish traditional consumption scenarios, Kweichow Moutai plans to expand new consumption scenarios.
"Under the changing consumption landscape, Kweichow Moutai will further deepen the 'three transformations' of customer groups, scenarios, and services, particularly using scenario transformation to drive 'three-end changes' in products, channels, and terminals," Wang Li said. The company is shifting from product-oriented to scenario-oriented approaches, focusing on "making consumers more trusting, better understanding consumers, more convenient access, and better emotional value stimulation" to promote the "three transformations" and achieve "transformation from selling liquor to selling lifestyle."
In product innovation, Jiangsu Yanghe Distillery launched the seventh-generation Haizhilan in Jiangsu Province and introduced Yanghe Daqu high-line glass bottle liquor, optimizing the brand matrix and focusing on mass-market price points. Industry insiders believe that glass bottle liquor with 100% three-year aged liquor quality certified by authentic vintage and priced at 59 yuan/bottle (42% 500ml) meets consumer demands in the era of "three rationalities" (rational drinking volume, rational price selection, rational style preference).
Zhenjiu Lidu (6979.HK), listed on the Hong Kong Stock Exchange, launched high-end products Zhen Fifty Anniversary Liquor and Dazhen·Zhenjiu under its flagship Zhenjiu brand in the first half of 2025. According to reports, Dazhen is the company's strategic flagship product, priced at 600 yuan/bottle, with quality comparable to market products priced at 3,600 yuan, offering outstanding quality-price ratio. Together with Zhen Fifteen and Zhen Thirty series, it creates synergistic positioning effects and strengthens the company's product matrix.
In new tracks, Wuliangye, Shede Spirits, and other baijiu companies announced entry into low-alcohol liquor markets.
Against the backdrop of insufficient macro effective demand, traditional high-alcohol baijiu consumption scenarios are further compressed, industry deep adjustment signals are increasingly apparent, and the expected youth market is still on the way. While internationalization shows promise, it cannot yet undertake the role of new performance growth points.
In the new industry cycle, liquor companies need new incremental growth, and markets need new consumption scenarios. With the increasingly clear trends of low-alcohol, palatable, and diverse scenario-based development in the baijiu market, low-alcohol liquor emerged, with multiple premium liquor companies accelerating layout in this track.
On August 29, Wuliangye held an online launch event on Douyin's "Wuliangye Official Flagship Store," officially launching its new product 29-degree Wuliangye·Love at First Sight, a key move in the company's brand youth strategy.
On August 30, the "Shede Zizai" new product launch event and JD.com first launch signing ceremony was held at the China Alcoholic Drinks Association. "Shede Zizai" with 29% alcohol content represents a key step for Shede Spirits to enter the ultra-low alcohol aged liquor track and penetrate new consumption fields.
Shede Spirits Chairman Pu Jizhou stated that facing new changes in consumption leader iteration, consumption motivation shift, and consumption scenario reconstruction, Shede Spirits assessed the situation and devoted efforts to creating the "Shede Zizai" product, bringing "light burden, more mellow" new experiences.
"As early as the 1970s and 1980s, multiple Chinese liquor companies launched low-alcohol baijiu, and some companies that adopted 'alcohol reduction and price reduction' (selling low-alcohol liquor at low prices) strategies were among the first to emerge from industry troughs in the 1990s," liquor industry researcher Ouyang Qianli said. "Alcohol reduction and price reduction" will not affect baijiu companies' brand positioning and makes it easier to align with international markets, as low-alcohol liquor has significant tax advantages in international markets.
Ouyang Qianli further stated that the liquor industry is entering its fourth industry adjustment, and only innovation can navigate through cycles. "Leading liquor companies like Wuliangye promoting 'low-alcohol baijiu' launches is positive, not negative—it's tactics and strategy."
Some liquor companies have also introduced new business models, promoting manufacturer-dealer benefit and destiny communities.
On September 10, Zhenjiu Lidu announced the launch of an "Alliance Merchant Equity Payment Plan," initially setting no more than 169 million shares of corresponding economic benefit rights for the "Ten Thousand Merchant Alliance," with the board having authority to further increase based on circumstances, incentivizing qualified alliance merchants to promote long-term sustainable company growth and development.
"Share sources include controlling shareholder donations and trust plan repurchases. This alliance merchant equity payment plan has a five-year validity period, which the board may adjust based on company needs and market conditions," the company announcement showed. Qualified alliance merchants will receive settlement distributions after seven to ten-year lock-up periods upon achieving corresponding performance targets.
Founder Securities believes Zhenjiu Lidu's "Ten Thousand Merchant Alliance" focuses on resolving current channel core pain points and reconstructing industry ecology, establishing sustainable competitive barriers. "The plan centers on 'Ten Thousand Merchant Alliance + Dazhen Zhenjiu,' deeply integrating products, channels, and benefit mechanisms, directly addressing industry pain points in consumption transformation, channel confusion, and dealer benefit protection, while adopting quota sales models to ensure price stability and binding alliance merchants with short, medium, and long-term benefits."
**Accelerated International Expansion**
As domestic market competition intensifies, Chinese baijiu internationalization pace accelerated in 2025, seeking to expand new incremental growth.
Despite intensifying domestic baijiu market competition, the global spirits market remains substantial. According to German data statistics agency Statista, global spirits market total revenue in 2023 was approximately $525.3 billion (about 3.74 trillion yuan); from 2023 to 2027, global spirits market revenue is expected to maintain a 4.56% compound annual growth rate.
Driven by volume and price increases, baijiu export value shows rapid growth.
China Chamber of Commerce for Import and Export of Foodstuffs, Native Produce and Animal By-Products Alcoholic Beverages Import and Export Chamber data shows that in the first half of 2025, China's baijiu export value was $530 million (about 3.774 billion yuan), up 30.9% year-over-year; export volume was 8.31 million liters, up 7.4% year-over-year; average price was $63.7 (about 454 yuan)/liter, up 21.9% year-over-year.
Among Chinese baijiu overseas destinations, Hong Kong leads with over 40% share, followed by Macau, Singapore, the United States, and Japan in second through fifth positions.
In the first half of 2025, baijiu export value to Hong Kong was approximately $220 million (about 1.566 billion yuan), with a remarkable 105.2% year-over-year increase, and average price of $78.5 (about 559 yuan)/liter, up over 80% year-over-year. Baijiu's outstanding performance in Hong Kong is closely related to local new policies. As a "bridgehead" for baijiu overseas expansion, Hong Kong plays an important role in Chinese baijiu internationalization, serving not only as a core consumption area but also as a key location for Chinese baijiu brand building.
In October 2024, Hong Kong announced substantial reductions in spirits taxes. Under the new tariff policy, for imported spirits priced above HK$200, the tax rate on the portion above HK$200 was reduced from 100% to 10%; for spirits priced at HK$200 or below, tax rates remained unchanged. At that time, institutions noted that tariff reductions would directly stimulate Hong Kong's local spirits consumption market, particularly baijiu categories.
In 2025 interim reports, six A-share baijiu companies released export data. Among them, four companies saw year-over-year growth in international revenue, while two companies experienced declines in international revenue, showing some differentiation.
Among them, leading baijiu company Kweichow Moutai's overseas revenue in the first half of 2025 was 2.893 billion yuan, up over 30% year-over-year, while Sichuan Swellfun and Anhui Gujing Distillery Company Limited (000596.SZ) both saw year-over-year declines in overseas and international revenue.
Data shows Kweichow Moutai's marketing network covers domestic markets and 64 countries and regions across five continents.
"The company is deeply advancing the construction of six major systems for international markets around international strategy goals," Wang Li stated. In 2025, the company continued deep market promotion in Singapore, Australia, Japan, and other countries and regions, hosting "Moutai Brand Day" and "Moutai Night" events to accelerate "going global."
Other liquor companies are also accelerating international expansion.
Wuliangye deeply participated in the Boao Forum for Asia, Osaka World Expo, APEC Business Leaders Summit, and others, carefully planning brand marketing and leading "Sichuan Liquor Global Tour" deep into France, Netherlands, Germany, and other countries, with products exported to over 100 countries and regions worldwide.
Shede Spirits deeply implements international strategy, continuously enriching promotion activities and accelerating overseas business layout, currently reaching 40 countries (regions).
Although baijiu companies are actively expanding international markets, Chinese baijiu overseas expansion still faces challenges in standard setting, policy regulations, sales channels, partnerships, and tariff rates.
From revenue proportion perspective, among six A-share baijiu companies disclosing international revenue data, international revenue proportions in the first half of 2025 were all below 4%. Compared to international spirits revenue globalization characteristics, Chinese baijiu listed companies' international revenue is unlikely to become a new performance growth point in the short term.
"Current baijiu internationalization is still in the initial expansion period 'from 0 to 1,' with channel construction promotion, team deployment, and brand publicity exposure all expected to bring incremental growth," Huachuang Securities believes. "'From 1 to 10' requires genuine consumption atmosphere improvement, considering the generational transmission nature of alcoholic beverage consumption, requiring sustained cultivation over ten years or even longer periods, making long-term pathways more worthy of liquor company consideration."