Analysis of the Impact of the Anhui Baijiu Market Competition Pattern on Kouzijiao

Based on collected data and research materials, I now provide you with a systematic and comprehensive analysis report.

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Anhui Province is an important major province for baijiu production and sales in China, with a market scale of approximately RMB 35-40 billion. The Anhui baijiu market exhibits a distinct

, with three local leading baijiu enterprises dominating the market [0][1].

Enterprise	Provincial Market Share	2024 Revenue (RMB 100 million)	2024 Net Profit (RMB 100 million)	Core Products
Gujing Gongjiu	36%	218.3	55.17	Gu 20+, Gu 16
Yingjia Gongjiu	12%	67.6	25.89	Dongzang Series
Kouzijiao	9%	60.15	16.89	Jian Series

The combined market share of CR3 in Anhui reaches

, with local baijiu enterprises dominating and competition being extremely fierce [1]. In addition, national famous baijiu brands such as Moutai (9%), Wuliangye (7%), Yanghe (4%), Jiannanchun (3%), and Fenjiu (2%) also hold a certain share in the Anhui market [1].

From a historical evolution perspective, Kouzijiao’s advantage relative to Gujing Gongjiu has continued to decline:

• 2015: Kouzijiao’s revenue accounted for 49% of Gujing Gongjiu’s
• 2025: This proportion has dropped to approximately
  21%
  [1]

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According to Kouzijiao’s 2025 performance forecast [2][3]:

• Net Profit
  : Expected to be RMB 662-828 million, representing a
  50%-60% year-over-year decline
• Revenue Decline
  : Revenue in the first three quarters of 2025 was RMB 3.174 billion, down 27.24% year-over-year
• Q3 Sharp Plunge
  : Net profit attributable to parent shareholders in the third quarter was only RMB 26.96 million, a
  92.55% year-over-year plunge
  , marking the largest single-quarter decline since the company’s listing

Even more worrying is that the fourth quarter may see a

, a situation that Kouzijiao has not encountered in the past decade.

Indicator	Kouzijiao	Gujing Gongjiu	Yingjia Gongjiu	Industry Interpretation
ROE	10.21%	18.60%	20.71%	Kouzijiao has the lowest capital efficiency
Net Profit Margin	23.10%	22.60%	33.00%	Yingjia Gongjiu has the strongest profitability
Gross Profit Margin	75.65%	79.2%	71.6%	Gujing Gongjiu has the strongest product strength
Current Price (RMB)	29.36	133.98	38.99	—

Kouzijiao’s

, far lower than Gujing Gongjiu’s 18.60% and Yingjia Gongjiu’s 20.71%, reflecting the issue of low capital utilization efficiency.

Kouzijiao’s stock performance is significantly weaker than that of its competitors [0]:

• Decline in the past year
  : 20.07%
• Decline in the past three years
  : 51.70%
• Decline in the past five years
  : 56.22%
• Technical analysis shows a
  downtrend
  , with RSI in the oversold zone and MACD showing a bearish signal

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Gujing Gongjiu relies on

to accurately position itself and lead consumption upgrading, continuously expanding its competitive advantage within the province [1]:

1. Scale Advantage
   : Revenue is 3.6 times that of Kouzijiao, with significant scale effects
2. Channel Advantage
   : Deep distribution model + strong marketing team, with high efficiency in expense allocation
3. Brand Advantage
   : Gu 20 has become a benchmark product in Anhui’s mid-to-high-end baijiu segment
4. Expansion Outside Anhui
   : Has established scaled presence in regions such as East China, North China, and Hubei

Yingjia Gongjiu achieved a turnaround by virtue of its

[4]:

• In 2022, its revenue and net profit comprehensively surpassed Kouzijiao
• Sales expense ratio is only 8%, far lower than Gujing Gongjiu’s (27%) and Kouzijiao’s (14%)
• Mid-to-high-end baijiu accounts for 78% of its sales, with continuous optimization of product structure

• The high-end “Jian Series” has underperformed in terms of off-take, and brand strength is insufficient to support price points above RMB 600 [2][3]
• The actual transaction prices of Jian 10 and Jian 20 have fallen below the guide prices
• Gross profit margins of products across all price tiers have shown a downward trend

• Relies on the “large distributor system” business model, which has gradually become ineffective amid the trend of channel flattening
• Digital transformation is lagging, with insufficient monitoring of terminal off-take data [2]

• As of the end of Q3 2025, inventory reached as high as
  RMB 6.218 billion
• Inventory turnover days increased from 1,052 days in 2022 to 1,286 days in 2024
• The surge in inventory severely ties up capital, affecting operational efficiency

• The “alcohol ban” has impacted government consumption scenarios, leading to a sharp decline in sales of high-end products [2]
• Macro economic downturn has led to a contraction in business banquet consumption scenarios

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The market size of mixed-fragrance baijiu accounts for only

of the overall baijiu market, with estimated sales revenue of approximately RMB 48.4 billion in 2024, which is less than the scale of Wuliangye alone [3]. The absence of leading enterprises has become the main challenge for mixed-fragrance baijiu to break through.

Price Band	2020 Share	2025 Share	Trend
High-End (RMB 800+)	16%	16%	Stable
Sub-Premium (RMB 300-800)	10%	18%	Significantly Increased
Mid-Range (RMB 100-300)	37%	43%	Continuously Rising
Low-End (Below RMB 100)	38%	24%	Sharply Declined

Kouzijiao’s Jian Series is mainly positioned in the RMB 300-1000 sub-premium price band, which is in the most fiercely competitive segment, facing multiple attacks from Gujing Gongjiu, Yingjia Gongjiu, and national famous baijiu brands [1].

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1. Deteriorating Competition Pattern
   : Gujing Gongjiu’s “one superpower, multiple strong players” pattern is increasingly consolidated, while Kouzijiao’s market share continues to shrink
2. Prominent Internal Shortcomings
   : Outdated channel model, hindered product upgrading, and severe inventory pressure
3. Deteriorating External Environment
   : Policy impacts + industry adjustments, combined with the ceiling of the mixed-fragrance baijiu category

• The industry’s deep adjustment period will continue, and the squeeze situation will be difficult to alleviate in the short term
• There is significant uncertainty in the recovery of off-take for high-end products
• Inventory digestion will take a long time, which may continue to affect performance
• The RMB 10 billion revenue target faces significant challenges

• Progress of channel reform and digital transformation
• Whether new channel models such as bulk liquor shops can effectively clear inventory
• Changes in market acceptance of the Jian Series products
• M&A opportunities brought by industry integration

Kouzijiao is facing the most severe operational challenges since its listing. Amid the fierce competition in the Anhui baijiu market, the company needs to re-examine its strategic positioning and accelerate channel transformation and product upgrading to reverse its current predicament.

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[0] Gilin API - Kouzijiao (603589.SS) Company Profile and Financial Data (https://gilin-data.oss-cn-beijing.aliyuncs.com)

[1] Soochow Securities - In-Depth Research Report on Gujing Gongjiu (https://pdf.dfcfw.com/pdf/H3_AP202601091816872888_1.pdf)

[2] Beijing Business Daily - Why Kouzijiao Suffered a Performance Waterloo with its Worst Annual Report (http://www.bbtnews.com.cn/2026/0113/581584.shtml)

[3] Sina Finance - Kouzijiao’s Performance Plunge: Where Does Mixed-Fragrance Baijiu Go From Here (https://finance.sina.com.cn/stock/stockzmt/2026-01-14/doc-inhhfrsx8485651.shtml)

[4] Hualong Securities - In-Depth Research Report on Yingjia Gongjiu (https://pdf.dfcfw.com/pdf/H3_AP202311191611678621_1.pdf)