Facing persistent industry-wide adjustments, Wuliangye Yibin Co.,Ltd. (000858.SZ) is navigating its "darkest hour."

The company recently disclosed its Q3 2025 financial report, revealing a 10.26% year-on-year decline in revenue to RMB 60.945 billion for the first three quarters, with net profit attributable to shareholders dropping 13.7% to RMB 21.511 billion.

The standalone Q3 performance was even more dismal. Revenue plummeted 52.66% YoY to RMB 8.174 billion, while net profit nosedived 65.62% to RMB 2.019 billion.

Southwest Securities’ research highlights severe margin compression and cash flow strain. Wuliangye’s Q3 gross margin contracted by 13.5 percentage points to 62.6%, attributed to weakened demand for its core brand, steep revenue decline, and rigid fixed costs. Cash receipts plunged 74.7% to RMB 7.14 billion.

Experts note that 2025 remains a period of profound adjustment for the baijiu sector, with listed firms grappling with slowing growth, inventory pileups, and sluggish sales. Corporate travel and entertainment budget cuts have significantly dented high-end baijiu consumption, while demand for banquet occasions (weddings, birthdays) also softened.

The *2025 China Baijiu Market Mid-Year Report* indicates 59.7% of liquor makers saw operating profit shrink in H1, with 50.9% reporting lower revenue—primarily due to reduced customer numbers and average spending. Industry-wide inventory turnover days surged to 900 (up 10% YoY), while 60% of companies faced price inversions, most severely in the RMB 800–1,500 range. The RMB 100–300 mid-to-low segment emerged as the sales driver.

With mounting inventory pressure, some distributors resorted to steep discounts, further dampening stockpiling expectations. One dealer revealed, "(Wuliangye’s) factory still has unsold stock," noting normal terminal sales volume but declining prices.

Institutional investors remain cautious about the sector’s near-term outlook. Wanlian Securities data shows fund holdings across baijiu stocks broadly declined, with leading players seeing sharp reductions. Compared to Q1 2025, 12 baijiu stocks recorded fewer fund holders—Wuliangye’s count dropped by 190 to 358 funds.

As Q3 results unfold, Wuliangye confronts a perfect storm: industry-wide recalibration, bloated channel inventories, and persistent core product price erosion. The baijiu winter shows no signs of thawing, leaving markets keenly watching how the company weathers this critical test.