Jiugui Liquor Co.,Ltd. issued a stark profit warning on July 14, projecting devastating first-half 2025 results. The baijiu producer anticipates revenue of approximately 560 million yuan – a precipitous 43% year-on-year collapse – while net profits will nosedive by 90.08% to 93.39%, landing between a mere 8 million and 12 million yuan.

Mounting industry pressures, amplified by the Matthew effect squeezing smaller players, have made distributors increasingly reluctant to commit payments, the company explained. Further exacerbating the crisis, Jiugui Liquor Co.,Ltd. highlighted how cautious market sentiment has desynchronized dealer repayments from actual retail sales. With marketing expenses tethered to sluggish terminal sales, costs have ballooned. Simultaneously, hefty promotional outlays for new product launches have dramatically widened the net profit freefall.

This dismal forecast extends an alarming downward spiral revealed in 2024’s annual report. Last year’s revenue cratered by 49.70% to 1.423 billion yuan, while net profit attributable to shareholders imploded by 97.72% to 12.4933 million yuan. The bleeding continued into Q1 2025, with revenue dropping another 30.34% to 344 million yuan and net profit shrinking 56.78% to 31.7133 million yuan.

Jiugui Liquor Co.,Ltd.'s premium Neican series suffered most acutely, its 2024 sales plunging 67.06% to 235 million yuan. Market prices for this once-exclusive offering halved from the suggested 1,499 yuan to around 750 yuan, shattering its high-end image. During Jiugui Liquor Co.,Ltd.'s 2022 peak, the Neican line generated 1.157 billion yuan – 28.57% of total revenue – but has since seen gross margins erode from 91.63% to 87.71%.

Distribution channels are unraveling rapidly. Dealers plummeted by 438 (24.7%) to 1,336 in 2024, while sales concentration among the top five clients weakened significantly, dropping to 26.01% from 34.84% in 2023 and 37.33% in 2022.

Management instability mirrors this operational turmoil. Since COFCO Wine’s 2016 takeover, three chairmen and four deputy general managers have cycled through. Gao Feng replaced Wang Hao as chairman in February 2024; sales veteran Wang Zhe resigned as deputy GM that June; and COFCO alumnus Cheng Jun returned as Party Secretary and GM by year-end. Stretching back to its 1997 IPO, the company has churned through 10 chairmen, averaging under three years each.

Amid this crisis, all eyes turn to the partnership with retail phenomenon Pang Donglai. Founder Yu Donglai announced via June 29 video that their co-developed "Jiugui Freedom Love" baijiu would launch in late July or early August. Priced around 200 yuan for a 550ml bottle at 52% ABV, this rich-aroma spirit will be sold exclusively through Pang Donglai outlets – a strategic move tracing back to Yu’s February 19 visit to Jiugui Liquor Co.,Ltd.'s headquarters, where he and COFCO Wine chairman Gao Feng explored retail expansion and product innovation.

Market hopes surged, fueled by Pang Donglai’s recent success reviving Yonghui Superstores and its blockbuster "Freedom Love 1995" collaboration with Baofeng Liquor, which racked up 500 million yuan in sales with daily shipments hitting 3,000-4,000 cases. Yet Jiugui Liquor Co.,Ltd.'s catastrophic H1 forecast throws icy water on this optimism. With entrenched product, pricing, and distribution challenges, Pang Donglai’s magic alone appears insufficient to resuscitate this embattled distiller.