Recently, a research report from Guangfa Securities predicting the Q3 2025 performance of the liquor industry has stirred significant discussion within the sector. The report forecasts that Wuliangye Yibin Co., Ltd.
Interestingly, these predictions diverge substantially from those made by major brokerages such as Shenwan and Guosen.
What is the basis for Guangfa Securities' prediction regarding Wuliangye’s net profit? Why do they suggest a “reversal” between Wuliangye and Luzhou Laojiao? An investigation and analysis were conducted to uncover more details.
Last week, Guangfa Securities released a report titled "Continued Adjustment in the Liquor Sector, Diverging Performance Among Mass Brands—Q3 2025 Earnings Preview," where they provided a detailed analysis of the expected Q3 performance of liquor companies. Overall, Guangfa believes that after entering August, the tightening and refining of policy enforcement led to a slight improvement in liquor demand on a month-on-month basis, although it still faces year-on-year pressure. From the progress of distributors’ payment collections, it is anticipated that, in light of manufacturer negotiations, most companies are easing their payment collection requirements, which benefits some leading liquor producers.
As a result, the brokerage expects the performance of liquor companies in Q3 2025 to align more closely with actual sales. Looking at different price tiers, they project that among high-end liquors, Kweichow Moutai is likely to show resilience, while demand in the sub-premium business remains weak, and Fenjiu is leading the advantage; leading brands in the real estate liquor segment continue to make adjustments.
It's noteworthy that Guangfa’s performance forecasts for the liquor sector are largely consistent with those of other brokerages, differing little overall; however, their assessment of Wuliangye stands out starkly.
Guangfa Securities noted that amidst weak demand, the wholesale price of Wuliangye's flagship product has been continuously declining, currently around 820 RMB per bottle, down 100 RMB from the beginning of the year. In Q3 2025, the company plans to focus on long-term high-quality development and may take steps to reduce channel inventory and stabilize product prices, thus boosting distributor confidence. Guangfa predicts a 30% year-on-year drop in Wuliangye's revenue and a 45% decline in net profit.
In contrast, a more moderate forecast comes from China Merchants Securities, which observes that most of Wuliangye’s distributors have completed approximately 10% less of their annual targets compared to last year. The previously low wholesale prices reduced distributors’ willingness to collect payments, but recent increases in factory rebates and subsidies have somewhat restored distributor confidence, leading to slightly better sales during the festival season compared to competitors. They estimate a quarterly adjustment in the financial reports will see Wuliangye's revenue and profit decline by 8% and 13% year-on-year, respectively.
Regarding the brokerage's quarterly report predictions, an investor posed questions to Wuliangye's securities department. The staff stated, “The sales performance during the Double Festival this year was indeed somewhat muted compared to previous years, but we cannot currently provide quantitative data. As for the brokerage predictions, each carries different research data and conclusions. The company cannot clarify these forecasts, as doing so could involve disclosing insider information, so we recommend waiting for our Q3 report release.”
Meanwhile, Guangfa Securities also issued a report titled “Wuliangye (000858.SZ): Quantity and Price Require Rebalancing, Downgrading Earnings Forecast for This Year and Next.” Within this report, they suggested a “reversal” between Wuliangye and Luzhou Laojiao.
Guangfa's analysis pointed out that since 2021, the liquor industry has undergone a period of adjustment, during which many liquor product prices have decreased. Wuliangye and Guojiao—both positioned in the thousand RMB price range—are often compared by consumers and investors.
From 2021 to 2022, early in the sector’s adjustment, Luzhou Laojiao leveraged its low-alcohol Guojiao (38 degrees) to penetrate the northern market, providing relief for the high-alcohol Guojiao (52 degrees). Since Q2 2025, as Luzhou Laojiao enhances its digitization and capitalizes on its stronghold market, the price of high-alcohol Guojiao has surpassed that of Wuliangye. These price surpasses have coincided with frequent management changes at Wuliangye, providing further opportunities for Guojiao to narrow the gap.
Guangfa concludes, “The liquor industry’s overtaking performance resembles the ‘dripping water wearing away a stone.’ Moutai took over Wuliangye over more than a decade, creating a generational gap during this cycle, with new overtaking opportunities arising during this adjustment phase.”
Additionally, regarding Wuliangye’s high-end product ratio rising against the trend, Guangfa interprets this as a supply-demand imbalance. They remarked that since 2021, amid the economic transition, consumption scenarios for high-end liquor have seen declines, prompting companies like Kweichow Moutai, Shanxi Fenjiu, Luzhou Laojiao, Yanghe Distillery, and Jinshiyuan to shift focus toward mid to low-end products. From 2022 to 2024, Kweichow Moutai’s high-end liquor revenue proportion has decreased year-on-year, with a more pronounced decline in the first half of this year due to policy impacts.
Conversely, Wuliangye’s share of high-end liquor has shown a reverse trend—rising steadily from 2022 to 2024, with a slight increase predicted for the first half of 2025. This upward trend in Wuliangye’s high-end product revenue share contrasts sharply with the industry’s trends and, coupled with rapidly declining market prices, may reflect Wuliangye’s efforts to meet annual targets amid supply-demand imbalances.
Finally, while projecting future three-year performance, Guangfa forecasts that Wuliangye's performance may continue to decline in 2025 and 2026, with net profit expected to drop to 23.65 billion RMB in 2026. In contrast, they predict growth for the net profits of the other top five liquor companies—Kweichow Moutai, Shanxi Fenjiu, Luzhou Laojiao, Yanghe Distillery, and Gujing Gongjiu—by 2026.
For further details supporting Guangfa's predictions, calls were made to analyst Fu Rong at Guangfa Securities, but as of the publication of this piece, no connection was made, nor was there a response to emails.