I. Q2 2025 Summary: Building Strength at the Bottom, Awaiting Improvement
Under the influence of the "518" new policy, the second quarter saw a lack of consumption scenarios in the baijiu industry, with demand under pressure. Leading liquor companies with stronger brand power (such as Moutai, Wuliangye, and Fenjiu) demonstrated strong performance resilience, while most other liquor companies pragmatically slowed down their apparent performance to relieve channel pressure. According to feedback from distributors in multiple regions, baijiu demand improved marginally after entering August, with sales decline narrowing. Subsequently, the dual festival payment collection entered the manufacturer-dealer negotiation stage, and most liquor companies may pragmatically lower distributor task targets in the weak demand environment.
By price segment: Premium baijiu showed strong apparent performance resilience, with overall revenue in 25H1/25Q2 growing +6.2%/+3.4% year-over-year respectively, leading performance among all price segments. Regional liquor brands were severely affected by the lack of consumption scenarios after entering Q2, mostly choosing pragmatic deceleration to relieve channel pressure, with overall revenue in 25H1/25Q2 declining -19.0%/-31.0% year-over-year respectively. Sub-premium baijiu performance was differentiated. Led by Shanxi Fenjiu, the segment's overall revenue in 25H1/25Q2 remained flat/-5.4% year-over-year respectively. Shede Spirits actively adjusted, with Q2 revenue decline significantly narrowing quarter-over-quarter, potentially ushering in an operational turning point. Shuijingfang and Jiugui Liquor actively adjusted to reduce channel inventory.
II. Financial Report Analysis: Demand Under Pressure, Differentiated Performance Across Price Segments
(I) Volume and Price Performance: Production Contraction, Premium Liquor Price Support Under Pressure
Production level: Above-scale baijiu enterprise production contracted, with small and medium enterprises clearing out. According to the National Bureau of Statistics, from January to July 2025, national above-scale baijiu enterprise production reached 2.146 million kiloliters, down -5.2% year-over-year. Under demand pressure, small and medium-sized liquor companies with poor profitability accelerated clearing out. From January to June 2025, the number of above-scale baijiu enterprises was 887, down by over 100 companies year-over-year.
Price level: Premium liquor wholesale prices continued to decline, while other products remained relatively stable. The second quarter is the traditional off-season for the baijiu industry. Weakened terminal demand combined with the lack of baijiu consumption scenarios under the "518" new policy led to continued price declines for most products since the Spring Festival. According to current liquor price data, wholesale prices of loose bottle Feitian/Puwu/Guojiao fell from 2210/935/870 yuan/bottle after the Spring Festival by 315/100/35 yuan/bottle to 1795/835/835 yuan/bottle respectively. Among sub-premium products, Fenjiu Qinghua 20 wholesale price was around 360 yuan/bottle. Regional liquor mainstream products operated relatively maturely in core markets, maintaining overall price stability.
Sales volume level: Medium to long-term squeeze growth trend unchanged. Under 25H1 demand pressure, some baijiu enterprises extended their price segments downward to expand product matrices, combined with expense accounting through goods discounting, showing apparent volume increase and price decrease. In the medium to long term, factors constraining baijiu sales volume are demographic structure and economic development. The industry's sales volume trend of stability with slight decline is difficult to change, but consumers' pursuit of value for money remains undiminished. We expect famous liquor brands with outstanding quality and leading brand power to maintain stable to slightly rising sales volumes.
(II) Revenue Side: Premium Liquor Shows Resilience, Regional Liquor Pragmatically Decelerates, Sub-premium Performance Differentiated
1. Premium Liquor: Apparent Performance Resilience Under Demand Pressure
In 25H1, three premium liquor companies achieved combined revenue of 160.32 billion yuan, up 6.2%; Q2 2025 single quarter revenue totaled 62.58 billion yuan, up 3.4%, ranking first among all segmented price categories, with leading liquor companies continuously demonstrating performance certainty.
By specific company: (1) Kweichow Moutai: In Q2 25, the company achieved total operating revenue/net profit attributable to shareholders of 39.7/18.6 billion yuan respectively, up +7.3%/+5.3% year-over-year, with Q2 revenue meeting market expectations. From product and channel structure perspective, direct sales channel proportion increased, series liquor revenue declined somewhat in Q2 25 under high base, Moutai liquor maintained double-digit growth, with non-standard Moutai liquor expected to contribute main increments; (2) Wuliangye: In Q2 25, the company achieved revenue/net profit attributable to shareholders of 15.83/4.63 billion yuan respectively, up +0.1%/-7.6% year-over-year. The company continued deepening channel reform in 25H1, promoting product renewal, optimizing "1+3" product structure, and advancing the launch of 29-degree Wuliangye; (3) Jiannanchun: In Q2 25, the company achieved revenue and net profit attributable to shareholders of 7.10/3.07 billion yuan respectively, down -8.0%/-11.1% year-over-year. Deeply implementing the "Hundred Cities Plan" and continuously advancing "Eastern China Strategy 2.0," allocating resources toward mid-to-high-end mainstream products, 1H25 revenue and net profit attributable to shareholders performance met expectations.
2. Sub-premium: Performance Differentiation, Fenjiu Continues to Lead
In 25H1, four sub-premium baijiu companies achieved combined revenue of 28.72 billion yuan, flat year-over-year; Q2 2025 single quarter revenue totaled 9.32 billion yuan, down -5.4% year-over-year.
By specific company: (1) Shanxi Fenjiu: In Q2 25, the company achieved total operating revenue/net profit attributable to shareholders of 7.44/1.86 billion yuan respectively, up +0.4%/-13.5% year-over-year. Q2 25 revenue growth rate declined significantly quarter-over-quarter from Q1. We expect this was mainly due to the company's deceleration to stabilize product prices and strengthen channel health in the face of external demand uncertainty, seeking long-term development; (2) Shuijingfang: In Q2 25, the company achieved total operating revenue/net profit attributable to shareholders of 0.54/-0.09 billion yuan respectively, down -31.4%/turning to loss year-over-year. The company's performance forecast mentioned the impact of high channel inventory after the Spring Festival, with active adjustment starting in Q2, awaiting subsequent demand stabilization; (3) Jiugui Liquor: Still in adjustment period, Q2 25 single quarter revenue declined 56.6% year-over-year; (4) Shede Spirits: The company actively responded during this adjustment period, continuously promoting product structure premiumization on the product side, supplementing increments with hundred-yuan major single products like T68 and Shezhi Dao, implementing product-specific strategies for offline channels, and actively developing online channels. Since the beginning of the year, the company has prioritized price, stabilizing channel profit levels and distributor stability, promoting continued improvement in social inventory and sales, with Q2 25 apparent revenue decline significantly narrowing.
3. Regional Liquor: Pragmatic Deceleration, Releasing Apparent Performance Pressure
In 25H1, five leading regional liquor companies achieved combined revenue of 41.80 billion yuan, down -19.0% year-over-year; Q2 2025 single quarter revenue totaled 12.34 billion yuan, down -31.0% year-over-year. In Q2 25, Jinshiyuan/Jiannanchun/Yingjia Gongjiu/Kouzijiao revenue declined -29.7%/-14.2%/-23.8%/-48.5% year-over-year respectively, all pragmatically decelerating quarter-over-quarter from Q1 to relieve channel pressure. Yanghe continued deep adjustment, with Q2 25 single quarter revenue/net profit attributable to shareholders declining -43.7%/-62.7% year-over-year respectively.
4. Other Baijiu: Laobaigan & Jinhui Liquor Performed Well
Among other baijiu companies, Q2 Laobaigan Liquor and Yilite demonstrated outstanding performance, achieving net profit attributable to shareholders of 0.17/0.06 billion yuan respectively, up +0.2%/-12.8% year-over-year. Among these, 25H1 Laobaigan Liquor net profit attributable to shareholders increased +5.0% year-over-year, ranking second among all listed baijiu companies. Additionally, Jinhui Liquor's 25H1 revenue/net profit attributable to shareholders increased +0.3%/+1.0% year-over-year respectively, with the company continuously consolidating provincial and Northwest base markets, achieving breakthroughs in premium and mass price segments.
(III) Profit Side: Scale Effect Weakening Under Rigid Expenses, Profitability Levels Generally Declining