Luzhou Laojiao Co.,Ltd. (000568), with its market capitalization returning to 200 billion yuan, has delivered its interim results.

On the evening of August 29, Luzhou Laojiao released its performance report for the first half of 2025, achieving operating revenue of 164.54 billion yuan, net profit of 76.63 billion yuan, and basic earnings per share of 5.21 yuan.

Luzhou Laojiao's stock price has shown significant gains recently, rising 33.28% from its June 2025 low. On the last trading day of August (29th), the stock closed at 137.19 yuan per share, with market capitalization returning above 200 billion yuan for the first time in five months.

**Mid-to-High-End Liquor Sales Continue Growing, Contract Liabilities Up Over 50%**

In May 2025, the issuance and implementation of the "alcohol ban" led to the disappearance of official consumption scenarios and affected some business entertainment occasions, causing widespread pessimism in the market regarding the prospects of alcoholic beverages, particularly baijiu.

However, Luzhou Laojiao's stable performance in the first half of this year significantly exceeded securities firms' and market expectations, reflecting the company's strong development resilience during this industry stress test.

Luzhou Laojiao's products are divided into mid-to-high-end liquor and other liquor categories. The core mid-to-high-end liquor segment was not affected by the alcohol ban, with production and sales volumes increasing by 24.14% and 13.33% respectively in the first half of 2025. During the reporting period, mid-to-high-end liquor achieved total revenue of 150.48 billion yuan, remaining essentially stable year-on-year, with its proportion of operating revenue further increasing to 91.45%.

There were also highlights in channel performance. In the first half of 2025, revenue contributed by the company's emerging channel operating model increased by 27.55% year-on-year to 9.32 billion yuan, with gross margin improving by 4.52 percentage points year-on-year to 83.52%. The traditional channel operating model is primarily based on offline distributors, with domestic and overseas distributor numbers increasing by 88 and 10 respectively during the reporting period, reaching 1,703 and 88 respectively by period-end.

Luzhou Laojiao's contract liability data was even more impressive. As of the end of the first half of 2025, the company's contract liabilities totaled 35.29 billion yuan, representing a 50.68% increase compared to mid-2024 (23.42 billion yuan) and a 15.1% increase from the end of Q1 2025 (30.66 billion yuan).

Compared to previous years, Luzhou Laojiao's contract liabilities at the end of the first half of 2025 reached a new historical high. Contract liabilities have always been likened to liquor companies' "reservoir," representing distributors' willingness to make advance payments to enterprises and, to some extent, reflecting distributors' market expectations for the industry. The growth in contract liabilities indicates higher channel enthusiasm for stocking up.

**Continuous Product Innovation and Active Shareholder Returns**

Regarding second-half work measures, it was noted that Luzhou Laojiao's 2025 interim report outlined four aspects: strengthening market cultivation and deep development, continuously promoting product innovation, continuously consolidating core fundamentals, and continuously advancing channel transformation.

In terms of continuously promoting product innovation, Luzhou Laojiao pointed out that facing current product demands for lower alcohol content, healthiness, palatability, and diversification, it will actively innovate and adapt, accelerating the development and promotion of new drinking methods, developing 28-degree Guojiao 1573 for timely market introduction.

Regarding continuously consolidating core fundamentals, Luzhou Laojiao indicated that in response to consumption differentiation trends, it will allocate resources toward mid-to-high-end mainstream products for the masses, actively layout the high-growth bottled liquor segment, and plans to launch new Luzhou Laojiao Erqu products to continuously consolidate its mass market positioning.

Luzhou Laojiao stated that the company consistently adheres to focusing on the "dual brands, three product lines, major single products" strategy: Guojiao 1573 firmly maintains its position in China's "top three premium baijiu" category; the Luzhou Laojiao brand revival plan has achieved remarkable results, with series products showing steady development momentum; innovative products such as health liquor and Chinese-style fruit wine continue to be cultivated, becoming a driving force for the company's advancement toward younger demographics, fashion, health, and internationalization.

At this year's June shareholders' meeting, Liu Miao, Party Secretary and Chairman of Luzhou Laojiao, stated that for 2025, Luzhou Laojiao has set the tone of "building momentum for breakthrough, intensive cultivation for stable growth; following trends, reform and innovation for development," with annual operating targets maintaining steady progress.

Dongwu Securities research report pointed out that Luzhou Laojiao has forward-looking judgment on industry cycles and has prepared in advance with digital marketing, terminal expansion, and other responses. Inventory and price management remain stable, and its ability to navigate this cycle is significantly stronger than during 2013-2014.

Regarding shareholder returns, Luzhou Laojiao distributed 87.59 billion yuan in cash dividends in 2024, with a dividend payout ratio of 65%, maintaining over 60% for four consecutive years. On April 28, 2025, the company disclosed its latest dividend plan, with annual cash dividend ratios for 2025-2026 to be no less than 70% and 75% of net profit respectively, and both no less than 8.5 billion yuan.