Analysis of Kouzijiao's Performance Pressure and Coping Strategies for Regional Liquor Enterprises

Based on the latest market data and research materials, I have prepared this in-depth analysis report on Kouzijiao’s performance pressure and coping strategies for regional liquor enterprises.

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According to the annual performance pre-reduction announcement released by Kouzijiao on January 7, 2025, the company expects its 2025 net profit attributable to parent company to be

, a sharp year-on-year decline of [1][2]. Compared with RMB 1.655 billion in the same period of 2024, the reduction amount is as high as RMB 828 million to RMB 993 million. The non-net profit attributable to parent company is also not optimistic, expected to be RMB 645 million to RMB 811 million, a year-on-year decrease of 49.65% to 59.93%[3].

From the perspective of quarterly data, Kouzijiao’s decline is even more obvious. The third quarter of 2025 became the worst single quarter for the company since its listing in 2015:

• Q3 Revenue
  : RMB 643 million, down
  46.23%
  year-on-year
• Q3 Net Profit
  : RMB 26.9651 million, plummeting
  92.55%
  year-on-year[1]

The cumulative revenue in the first three quarters was RMB 3.174 billion, down 27.24% year-on-year; the net profit attributable to parent company was RMB 742 million, down 43.39% year-on-year[2].

The core reason for Kouzijiao’s performance decline lies in the sharp drop in sales of its

[1][2]. The performance of different product lines in the first three quarters of 2025 is as follows:

Product Grade	Revenue (RMB 100 million)	Year-on-year Change
High-end Liquor	29.61	-27.98%
Mid-range Liquor	0.41	-15.38%
Low-end Liquor	1.14	+25.09%

High-end liquor accounts for as much as

of total revenue, and its 27.98% decline directly dragged down the overall performance[3]. In sharp contrast, low-end liquor achieved a counter-trend growth of 25.09%, reflecting an obvious consumption downgrade trend.

In 2024, Kouzijiao put forward a strategic target of hitting

in the next 3 years[1]. However, the company’s revenue in 2024 only reached RMB 6.015 billion, a year-on-year growth of 0.89%, while the net profit attributable to parent company decreased by 3.83% year-on-year. After entering 2025, the performance has accelerated its decline, and the 10 billion target has become out of reach.

It is worth noting that while the performance is under pressure, important shareholders of the company have continued to reduce their holdings. Liu Ansheng, one of the actual controllers, launched the fourth share reduction plan in August 2025, planning to reduce holdings by no more than 10 million shares[1]. Institutional investors are also “voting with their feet”: China Merchants CSI Liquor Index Securities Investment Fund has significantly reduced its holdings, and the company has been excluded from multiple mainstream indices such as the SSE 180 Index and MSCI China Index[1].

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In 2025, the liquor industry continued its in-depth adjustment trend, showing the structural characteristics of

[4][5]. Data from the National Bureau of Statistics shows that the cumulative output of liquor from January to November 2025 was 3.215 million kiloliters, a year-on-year decrease of 11.3%[2]. In the first three quarters of 2025, the total revenue of 20 A-share listed liquor enterprises was RMB 317.779 billion, a year-on-year decrease of 5.90%; the total net profit was RMB 122.571 billion, a year-on-year decrease of 6.93%[4].

The price system continues to be under pressure. According to the 2025 First Half Luzhou · China Liquor Price Index Operation Report, the national liquor wholesale price index fell 9.9% year-on-year in the first half of the year, among which the wholesale price of famous liquor dropped by as much as

[5]. The wholesale price of loose bottles of Feitian Moutai once fell below the official guidance price of RMB 1,499, a drop of about 35% from the beginning of the year; the actual wholesale price of the 8th Generation Wuliangye has oscillated in the RMB 850 range for a long time, forming a serious inversion with the ex-factory price of RMB 1,019[5].

The industry shows an obvious

. In the first three quarters of 2025, the total revenue of the six head liquor enterprises (Kweichow Moutai, Wuliangye, Luzhou Laojiao, Shanxi Fenjiu, Yanghe Co., Ltd., and Gujing Gongjiu) accounted for of the 20 listed liquor enterprises, and their net profit accounted for as high as [4].

Among the 20 listed liquor enterprises, only Kweichow Moutai and Shanxi Fenjiu achieved “double growth” in revenue and net profit, while the remaining 18 enterprises experienced declines to varying degrees[5]. Regional liquor enterprises show obvious differentiation: Jinhui Liquor’s revenue in the first three quarters was RMB 2.306 billion, a year-on-year decrease of only 0.97%, becoming a “stabilizer” among regional liquor enterprises; while the revenue of Jiuguijiu, Jinzhongzi Liquor, Huangtai Liquor, etc. all dropped by more than 20%, and Jiuguijiu’s net profit even decreased by 117.36% year-on-year[4].

The industry reshuffling speed has accelerated significantly. In the first half of 2025, the number of domestic designated-scale liquor enterprises was 887, a decrease of

compared with the end of 2024[5]. Data from the China Alcoholic Drinks Association shows that the loss ratio of designated-scale liquor enterprises is as high as , hitting a record high[5].

Capacity depreciation has become a “nightmare” for many small and medium-sized liquor enterprises. Shandong Bandao Jing’s 560 tons of base liquor was valued at RMB 11.2 million, and finally sold for RMB 8.96 million; Sichuan Luzhou Luhe Liquor’s 5,549.55 tons of base liquor was sold for only RMB 13 million after 30 price increases, which translates to a base liquor price of only

[5].

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National famous liquor enterprises continue to penetrate regional markets by virtue of their brand potential and scale advantages:

Impact Dimension	Specific Performance
Price Suppression	Head liquor enterprises compress the living space of regional liquor enterprises through measures such as volume control to maintain prices and channel subsidies
Channel Sinking	Famous liquor enterprises strengthen layout in county-level markets and directly control terminal outlets
Consumer Diversion	Consumers’ brand awareness increases, and “drinking famous liquor” becomes a rational choice
Resource Competition	Famous liquor enterprises increase marketing investment, squeezing the budget space of regional liquor enterprises

Taking the Anhui market as an example, despite the saying “Eastern liquor enterprises do not enter Anhui”, national major brands such as Moutai and Wuliangye can still occupy

of the market share[6]. In the Shandong market, local liquor enterprises only account for of the province’s total liquor consumption, the core reason being the lack of leading liquor enterprises and low consumer brand loyalty[6].

Facing the sinking of national famous liquor brands, regional liquor enterprises generally face the following dilemmas:

• Insufficient Brand Potential
  : Difficult to compete with national famous liquor brands in terms of brand influence
• Weak Channel Control
  : Rely on dealer systems, lack the ability to directly control terminal outlets
• Serious Product Homogenization
  : Lack of differentiation in flavor, taste, and pricing
• Lagging Marketing Capabilities
  : Insufficient capabilities in digital marketing and private domain operation
• Limited Financial Strength
  : Difficult to support large-scale market investment

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Cai Xuefei, a think tank expert at the China Liquor Culture Brand Research Institute, pointed out that regional liquor enterprises should

[4][7].

:

• Focus on core regions to increase market coverage
• Bind rigid consumption scenarios such as banquets and festivals
• Establish consumer brand awareness and emotional connection
• Build the status of regional “hidden champions”

: Anhui Gujing Gongjiu deeply cultivates the local market. Consumers’ preference for low-alcohol strong-flavor liquor and brand recognition have formed a consumption inertia of “trusting local liquor”, with local liquor accounting for more than of the market share[6].

Kouzijiao has begun to actively explore transformation paths. In December 2025, the first store of the company’s community store “

” opened in Huaibei City, Anhui Province, deeply cultivating community consumption scenarios, aiming to create a “old liquor shop” at the doorstep, and plans to continue promoting layout[2].

:

Channel Type	Innovation Mode	Core Advantages
Community Store	Community tobacco and liquor stores, direct-sale stores	Close to consumers, available for immediate purchase
Instant Retail	Cooperation with Meituan, Ele.me	Meet immediate consumption needs
Private Domain Operation	WeChat Mini Programs, WeChat Work	Reach consumers directly
Live E-commerce	Live streaming with goods on Douyin	Break geographical restrictions

: By opening stores around communities, it can achieve “last mile” reach to consumers, while reducing channel costs and improving channel efficiency.

Differentiation and category innovation have become important forces for regional liquor enterprises to consolidate local advantages[6]:

:

• Flavor Innovation
  : Such as Linshui Yuquan’s “cave storage + mixed flavor”, Wutijiang’s “one product, three flavors”
• Taste Differentiation
  : Mung bean aroma (bright green aroma), fruit-flavored liquor, etc.
• Product Form
  : Small-bottle liquor, low-alcohol liquor, trendy drink series
• Crossover Integration
  : For example, Wuliangye launched “Feng Huolun” craft beer[4]

:

• Low-alcohol fruit-flavored liquor: Target young consumer groups
• Small-bottle liquor: Meet solo drinking and gathering scenarios
• Healthy liquor: Cater to healthy consumption trends
• Bottled liquor without packaging box: Cost-effective advantage, meet self-drinking needs

Channel reform to activate sales promotion has become the key[4][6][7]:

:

Traditional Channels → Online-Offline Integration → Instant Retail → Direct Reach to C-end

:

• Volume Control to Reduce Pressure
  : For example, Yanghe lowered its 2025 payment collection target, and Gujing Gongjiu actively “slowed down” to control delivery rhythm
• Financial Support
  : Provide working capital support for dealers
• Price Control
  : Strengthen market order management and stabilize the wholesale price system
• Digital Empowerment
  : Establish a dealer management system to realize data-driven refined operation

For small and medium-sized liquor enterprises with scarce resources, Cai Xuefei recommends actively seeking cooperation with head enterprises, and through

, share the OEM/ODM orders transferred by leading enterprises to become “capacity supporting suppliers”[4].

:

• M&A Integration
  : Accept acquisition offers from head liquor enterprises
• Capacity Trusteeship
  : Provide base liquor or OEM services for famous liquor enterprises
• Brand Authorization
  : Obtain brand authorization cooperation from famous liquor enterprises
• Channel Sharing
  : Join the channel system of head liquor enterprises

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Kouzijiao’s current dilemma is not only a microcosm of industry cycle adjustment, but also exposes deep-seated problems in the company’s development:

Challenges	Opportunities
High proportion of high-end products, weak risk resistance	25% growth of low-end liquor, large space for product structure optimization
Traditional channel system, high inventory pressure	Exploration of community store mode, initial stage of channel innovation
Insufficient brand potential, difficult to break through regional boundaries	One of Anhui’s “Four Golden Flowers”, with brand foundation
Rigid expense ratio, profit under pressure	Space exists for expense structure optimization

In view of Kouzijiao’s actual situation, the following strategies are recommended:

:

• Accelerate channel inventory digestion and stabilize the wholesale price system
• Control volume to maintain prices and reduce delivery of high-end products
• Increase promotion efforts for low-end products and optimize product structure

:

• Promote community store layout and deeply cultivate terminal channels
• Explore category innovation and launch differentiated products
• Strengthen C-end operation and improve consumer reach capabilities

:

• Re-examine the “10 billion RMB target” and formulate pragmatic strategies
• Strengthen brand building and enhance brand potential
• Explore M&A integration opportunities to achieve external development

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Institutions generally expect that the liquor industry is expected to usher in a key turning point of bottoming out and rebounding in the

[5]. The current liquor industry shows the following characteristics:

• Stock price bottom precedes financial report bottom
  : Market sentiment is close to the bottom
• Inventory digestion continues to advance
  : Channel pressure is gradually released
• Price system is bottoming out
  : Moutai’s wholesale price has rebounded above RMB 1,570[5]
• Institutional holdings are sluggish
  : The proportion of heavy positions in the liquor sector has dropped 10 percentage points from the peak[5]

:

Dimension	Trend Judgment
Concentration	Head liquor enterprises will further enhance their positions, with CR6 accounting for over 90%
Competition Focus	Shift from price wars to quality wars and brand wars
Channel Reform	Increased proportion of flattening, digitalization, and instant retail
Product Innovation	Youthful, healthy, and personalized become the directions
Regional Pattern	Regional leading enterprises consolidate base markets, national famous liquor brands sink to lower tiers

In the industry adjustment cycle, regional liquor enterprises need to follow the following survival rules:

1. Focus on Excellence rather than Scale
   : Cut inefficient products and focus on 1-2 core flagship products
2. Deeply Cultivate Base Markets
   : Strengthen local advantages and avoid blind national expansion
3. Differentiated Competition
   : Avoid red-ocean markets and deeply cultivate niche scenarios
4. Embrace Digitalization
   : Improve channel efficiency and enhance C-end operation capabilities
5. Maintain Flexibility
   : Dynamically adjust strategies according to cycle rhythms

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[1] Sina Finance - “High-end Cellar Product Sales Plunge Sharply in 2025, Kouzijiao’s "10 Billion RMB Dream" Unlikely to Come True” (https://finance.sina.com.cn/roll/2026-01-07/doc-inhfnzrp1973199.shtml)

[2] The Paper - “Kouzijiao Expects Net Profit to Be at Least Halved Last Year, Sales of Core Profit Source High-end Cellar Products Plunge Sharply” (https://www.thepaper.cn/newsDetail_forward_32335476)

[3] Securities Times Network - “Performance Under Pressure! In-depth Adjustment of the Liquor Industry, Dealer Conference Releases Positive Signals” (https://www.stcn.com/article/detail/3580000.html)

[4] Xinhua News Agency - “2025 Year-end Observation of the Liquor Industry: Breaking Through in the Deep Water Zone, Anchoring New Growth in Reconstruction” (http://www.news.cn/food/20251231/970071d1a546486ea04b216e3667c66c/c.html)

[5] Jiemian News - “Falling for Five Consecutive Years, What Happened to the Once Top-performing Liquor Industry? | A-share 2026 Investment Strategy ⑫” (https://m.jiemian.com/article/13836669.html)

[6] The Paper - “Decoding the 2025 Liquor Industry: Reconstructing New Growth Drivers in Adjustment” (https://m.thepaper.cn/newsDetail_forward_32256942)

[7] 36Kr - “‘Frustrated’ 2025: The Liquor Industry Explores the Bottom of the "Deep Water Zone", Urgently Needing Value Remolding” (https://m.36kr.com/p/3605318721438727)

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: Jinling AI Financial Analysis Team
: Jinling API Database, Listed Company Announcements, National Bureau of Statistics, Xinhua News Agency, Securities Times, etc.