Analysis of Gujing Gongjiu's Price Inversion Problem and Strategies to Rebuild Distributor Confidence

Based on comprehensive market research and data analysis, the following is an in-depth analysis of Gujing Gongjiu’s price inversion problem and strategic recommendations to rebuild distributor confidence:

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Gujing Gongjiu (000596.SZ) has recently shown weak performance, and the price inversion problem has become a core challenge hindering the enterprise’s development [0]:

Indicator	Value	Market Interpretation
2025 Stock Price Decline	-17.69%	Significantly underperformed the market
Three-Year Cumulative Decline	-47.48%	Long-term trend is weak
Current Stock Price	¥141.80	In a downward trend
Technical Indicators	RSI oversold, MACD death cross	Short-term pressure is obvious
Inventory Turnover Days	Approximately 900 days	Industry high [1]

According to the “2025 China Baijiu Market Mid-Year Research Report” jointly released by the China Alcoholic Drinks Association (CADA) and KPMG, 60% of enterprises in the baijiu industry face price inversion problems, with the high-end price band of 800-1500 yuan being the most severely affected [1]. As a leading baijiu enterprise in Anhui Province, Gujing Gongjiu’s core products exhibit the following issues:

• High Channel Inventory
  : Distributors have severe inventory backlogs, leading to a significant decline in inventory turnover efficiency
• Wholesale Price vs. Retail Price Inversion
  : Actual transaction prices are lower than ex-factory prices, compressing distributors’ profit margins
• Sustained Sluggish Sales
  : Shrinkage of consumption scenarios leads to weak terminal sales

Price inversion is the result of multiple overlapping factors:

1. Policy Impact
   : In May 2025, the Central Committee of the Communist Party of China and the State Council revised the “Regulations on Practicing Economy and Opposing Waste in Party and Government Organs”, explicitly stating that high-end dishes, cigarettes, and alcohol should not be provided at official reception meals, directly impacting traditional consumption scenarios of baijiu [1]

2. Consumer Demographic Gap
   : The main consumer group of baijiu (30-55 years old) has decreased by approximately 28 million, while the younger generation (post-90s and post-00s) has diversified drinking preferences and no longer regards baijiu as their first choice [1]

3. Supply-Demand Imbalance
   : Precious capacity expansion plans of baijiu enterprises have caused overcapacity during the deep adjustment period, coupled with a 30% reduction in terminal consumption scenarios (banquets, business receptions), forming a severe supply-demand mismatch [3]

4. High Inventory Pressure
   : The overall inventory turnover days of the baijiu industry reach 900 days, equivalent to taking two and a half years to digest all inventory [1]

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Gujing Gongjiu has taken multiple measures to address the price inversion dilemma:

• Proactive Slowdown
  : In Q3 2025, it actively reduced the delivery rhythm to help channels digest inventory [2]
• Volume Control to Reduce Pressure
  : Stimulate sales by controlling delivery rhythm to ease channel pressure [2]
• Optimize Payment Collection Targets
  : Significantly reduced payment collection requirements compared to the same period in 2024, giving distributors buffer space

: Gujing Gongjiu opened its first bulk liquor shop to seek breakthroughs in the bulk liquor market [3]:

Innovative Measure	Specific Content
Channel Innovation	Open community bulk liquor shops, leveraging Bozhou’s regional advantage as the “Capital of Chinese Herbal Medicines”
Product Innovation	Launch health-focused liquors such as Jujube Kernel Lily Liquor and Ganoderma逍遥 Liquor
Consumption Scenario Innovation	Cover alcohol content from 6 degrees to 50 degrees, create consumption scenarios suitable for young people to check in and share
Model Innovation	Adopt “liquor wall + faucet” design to improve per-square-meter efficiency

Leading baijiu enterprises have jointly launched financial products such as “Liquor Merchant Loan” and “Liquor E-Loan” with banks to solve distributors’ capital pressure during peak season stock preparation. Gujing Gongjiu is also exploring relevant financial empowerment plans [2].

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To address Gujing Gongjiu’s price inversion problem, it is recommended to systematically rebuild distributor confidence from the following five dimensions:

Strategy Direction	Specific Measures	Expected Effect
Strengthen Price Control	Establish a strict price system management mechanism to crack down on cross-region sales and low-price dumping	Stabilize the channel price system
Innovate Rebate Mechanism	Implement the “Full Price Control Model” to reward distributors through long-term rebates and stock dividends	Balance short-term gains and medium-to-long-term interests
Dynamic Profit Maintenance	Strengthen dynamic profit monitoring and maintenance for distributors	Ensure reasonable profit margins for distributors

:

• Continue to reduce payment collection targets, referring to Yanghe’s 2025 payment collection targets (35% in Spring Sugar, 45% in mid-year, 50% at year-end) [2]
• Launch the “Market Purchase and Code Conversion” policy, allowing distributors to recover low-priced goods from the market and offset task volumes
• Provide inventory interest subsidies, giving corresponding capital subsidies based on inventory amount to ease capital occupation costs

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• Jointly launch special “Liquor Merchant Loan” products with banks
• Implement the “Goods First, Payment Later” policy to reduce distributors’ capital pressure
• Establish an inventory evaluation and repurchase mechanism to reduce distributors’ inventory risks

Innovative Model	Core Points	Implementation Path
Full-Link Unified Pricing	Break the traditional hierarchical price difference profit model, unify pricing across the entire link from ex-factory to retail	Prioritize pilot projects for new product promotion
Terminal Direct Connection Cooperation	Establish direct cooperation with core terminals to reduce intermediate links	Gradually promote in key markets
Three-Price Unification Strategy	Unify purchase price, sales price, and media price to stabilize the price system	Cooperate with diversified rebate empowerment

:

• Deepen bulk liquor business and community channel layout to explore new growth points
• Leverage Bozhou’s regional advantages to continue developing health-focused liquors and fruit-flavored baijiu suitable for young consumers
• Create community-based and scenario-based consumption experience stores to attract young consumer groups

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• Expand emerging consumption scenarios such as family consumption and friend gatherings
• Develop high-cost-performance product lines such as small packages and light bottles
• Strengthen online channel construction to achieve online-offline integration

:

• Establish a manufacturer-distributor information sharing platform to enhance communication transparency
• Implement a quarterly business review mechanism to jointly analyze market changes
• Establish a distributor rating system to provide more support to high-quality distributors

:

• Explore equity incentive or profit-sharing mechanisms
• Establish a manufacturer-distributor joint investment fund for market expansion
• Implement a special support plan for strategic distributors

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• Industry-wide Pressure
  : In the first three quarters of 2025, the revenue and net profit of 20 listed baijiu enterprises decreased by 5.90% and 6.93% year-on-year, respectively [1]
• Policy Uncertainty
  : Official consumption policies continue to tighten, putting pressure on high-end products
• Slow Consumption Recovery
  : Recovery of consumption scenarios takes time, and sales are difficult to improve significantly in the short term

• Industry Bottoming Signal
  : With the year-on-year bottoming of Moutai’s wholesale price, the signal of valuation bottoming and recovery is strengthening [2]
• Allocation Opportunities for High-quality Enterprises
  : As a regional leader, Gujing Gongjiu has share advantages and the value of exchanging time for space [2]
• Structural Opportunities
  : The era of mass consumption is coming, and cost-effective products are expected to break through first [2]

Dimension	Evaluation	Recommendation
Short-term Performance	Obvious pressure; it is recommended to pay attention to the progress of channel inventory digestion	Cautious观望
Mid-term Layout	Has regional advantages and brand accumulation	Layout high-quality positions at low prices
Long-term Value	Expected to recover first after the industry adjustment period	Maintain strategic attention

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Gujing Gongjiu’s price inversion problem is essentially a concentrated manifestation of the baijiu industry during the deep adjustment period. Rebuilding distributor confidence requires systematic strategies, with coordinated promotion from five dimensions: price control, inventory digestion, channel innovation, product youthification, and manufacturer-distributor relationship reshaping.

:

1. Control Volume to Protect Price
   : Continue to actively control delivery rhythm to help channels reduce inventory
2. Financial Empowerment
   : Relieve distributors’ capital pressure through loan support and inventory subsidies
3. Model Innovation
   : Accelerate bulk liquor business and community channel layout to explore new growth points
4. Youthification Transformation
   : Create products and scenarios that meet the needs of young consumers
5. Trust Rebuilding
   : Reshape manufacturer-distributor relationships through transparent communication and interest binding

During the industry adjustment period, Gujing Gongjiu needs to have the strategic determination to “exchange time for space”, actively seek transformation while controlling risks, so as to take the lead in getting out of the predicament and rebuilding distributor confidence when the industry recovers.

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[0] Jinling AI Financial Database - Market Data and Technical Analysis of Gujing Gongjiu (000596.SZ)
[1] China Alcoholic Drinks Association & KPMG - “2025 China Baijiu Market Mid-Year Research Report”
[2] 36Kr - “Decoding the 2025 Baijiu Industry: Reconstructing New Growth Drivers in Adjustment”
[3] Sina Finance - “Behind Famous Liquors’ Collective Exploration of ‘Bulk Liquor’: Solving Inventory and Cash Flow Pressure with ‘Scenario + Digitalization’?”
[4] Eastmoney.com - Gujing Gongjiu Channel Inventory and Distributor Policy Data