In-depth Analysis of Kouzijiao's 2025 Performance: A Typical Sample of Regional Liquor Enterprises' Predicament in High-End Transformation

Based on the collected information, I will provide a systematic and comprehensive analysis for you.

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According to the annual profit warning announcement released by Kouzijiao on January 7, 2026, the company expects its 2025 net profit attributable to shareholders to be

, a year-on-year decrease of [1][2]. This drop marks the largest annual net profit decline since the company’s listing in 2015.

Indicator	First Three Quarters of 2025	YoY Change	Full-Year Forecast
Operating Revenue	RMB 3.174 billion	-27.24%	Expected to decline sharply
Net Profit Attributable to Shareholders	RMB 742 million	-43.39%	RMB 662 - 828 million (-50% ~ -60%)
High-End Liquor Revenue	RMB 2.961 billion	-27.98%	—
Gross Profit Margin	62.66%	-9.25 pct	—

Notably, if the full-year net profit hits the lower end of the forecast range (RMB 662 million), it would mean Kouzijiao incurs a

in Q4 2025, which would be the first quarterly loss since the company’s listing[1].

Kouzijiao’s high-end liquor business has long accounted for

of the company’s revenue, making it the absolute pillar business. However, from January to September 2025, the company’s high-end liquor revenue reached only , a significant year-on-year drop of compared to RMB 4.112 billion in the same period of the previous year[1][2].

Since 2023, Kouzijiao has launched

, covering the price ranges of RMB 300, RMB 500, and RMB 1,000 respectively, in an attempt to upgrade its product structure. However, market feedback shows:

• Jian 5, Jian 6, Jian 8
  : Their pricing systems are relatively stable, and mid-to-low-end products maintain decent sales[1]
• Jian 10, Jian 20
  : Actual transaction prices have fallen
  below the guided prices
  , and sales of products in the 1,000-yuan price range are clearly sluggish[1]
• Jian 30
  : As a strategic product in the 1,000-yuan range, it has limited market acceptance

Xiao Zhuqing, an independent commentator on the Chinese liquor industry, pointed out that Kouzijiao’s “Jian Series” for high-end transformation

. The 1,000-yuan price range requires a clear cultural narrative and scarcity attributes, and Kouzijiao has yet to provide a sufficiently convincing solution, leading its products to fall into the awkward situation of “neither high-end enough nor competitive in mid-end markets”[1].

Quarter	Operating Revenue	YoY Change	Net Profit Attributable to Shareholders	YoY Change
Q1	RMB 1.810 billion	+2.42%	RMB 610 million	+3.59%
Q2	RMB 721 million	-48.48%	RMB 105 million	-70.91%
Q3	RMB 643 million	-46.23%	RMB 27 million	-92.55%

It can be seen that

. The company continued its growth momentum at the beginning of the year, but after entering Q2, industry demand contracted, and the liquor market cooled rapidly. Sluggish sales and high inventory became the norm, putting significant pressure on the company’s performance[1].

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The

that Kouzijiao has long relied on was once a key to its success, generating sales through exclusive venue partnerships and terminal interception. However, this traditional model is no longer viable in the current Chinese liquor industry environment[1][2].

Liquor industry analysts point out that the core logic of the ‘Panzhongpan’ model is

, using distributors’ large-scale stockpiling to inflate sales data. But as the industry shifts from an “inventory stocking logic” to a “sales realization logic”, the drawbacks of this model have been fully exposed:

1. Weak channel control
   : Under the large distributor model, manufacturers have insufficient control over terminal channels, and distributors prioritize short-term profits, leading to inertia when launching new products[2]
2. Slow market response
   : Unable to adapt to the current trend of flat and refined channels in the liquor market
3. Low cost efficiency
   : Channel cost efficiency has dropped significantly, and profit margins have been compressed sharply

Indicator	First Three Quarters of 2025	YoY Change
Revenue from Wholesale & Distribution Channels	RMB 2.894 billion	-29.70%
Direct Sales (Including Group Purchases) Channels	RMB 222 million	+64.94%

Although direct sales channels maintain rapid growth, their overall scale is limited, and

[1].

• Contract Liabilities
  : As of the end of Q3 2025, contract liabilities stood at RMB 339 million, a
  39.46% decrease
  compared to the end of 2024, reflecting weakened willingness of distributors to make advance payments[1]
• Inventory Scale
  : Inventory climbed to
  RMB 6.218 billion
  , a 6.38% increase compared to the end of the previous year[1]

Distributors have shifted their focus from “stocking up” to “clearing inventory first”, and sluggish terminal sales are transmitting pressure upstream.

While revenue is under pressure, expenses have not decreased proportionally:

Expense Indicator	Q3 2025	YoY Change
Sales Expense Ratio	24.61%	+12.23 pct
General & Administrative Expense Ratio	15.03%	+7.95 pct

Sales expenses amounted to RMB 158 million, a year-on-year increase of 6.76%; general & administrative expenses reached RMB 96.58 million[1]. Expense rigidity has further amplified downward pressure on profits.

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The Chinese liquor industry has entered a period of in-depth restructuring since 2021, and the adjustment trend continued in 2025.

[3], indicating a significant increase in industry concentration.

• The revenue of the liquor sector decreased by
  5.83%
  year-on-year
• Net profit decreased by
  6.94%
  year-on-year
• The single-quarter revenue drop hit a new low since 2012[3]

Price Range	Performance Characteristics
High-end Liquor (Moutai, Wuliangye)	Wholesale prices have stabilized relatively, and performance maintains positive growth, showing strong resilience
Mid-to-High-end Liquor	Faces price inversion and inventory pressure; some enterprises respond by controlling production to stabilize prices
Regional Liquor Enterprises	Under the greatest pressure; insufficient brand strength leads to erosion of market share

The liquor industry is experiencing

:

1. Demand for high-end liquor has not contracted
   , but consumers are more rationally shifting to national famous brands such as Moutai and Wuliangye[1]
2. Consumers are more rational during consumption upgrading
   , turning to products with stronger brand strength and clearer value perception
3. Government and business scenarios have sharply decreased
   , while emerging scenarios such as small gatherings with friends, personal drinking, and outdoor camping are growing

Cai Xuefei, a liquor industry analyst, pointed out that “Kouzijiao may face challenges of insufficient brand value support and outdated consumer perception in the high-end price range”[1].

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Dimension	Moutai	Wuliangye	Regional Liquor Enterprises
Brand History	Hundreds of years of sauce-flavor heritage	650+ years as the originator of strong-flavor liquor	Decades of local history
Scarcity Attributes	Specific production area + 5-year brewing cycle	Traditional brewing techniques	Regional characteristics with limited national recognition
Financial Attributes	A store of value and investment product	Benchmark in the mid-to-high-end market	Lack of such attributes
Consumer Perception	Social currency, symbol of prestige	First choice for business banquets	Regional consumption habits

The dilemma of regional liquor enterprises in the high-end market lies in:

[1][2].

• Channel Coverage
  : Moutai and Wuliangye cover all provincial, municipal, and county-level channels across the country
• Terminal Control
  : Strong manufacturer control over terminal prices and inventory
• Distributor System
  : High-quality distributor resources are highly concentrated in famous brands
• Digital Capabilities
  : Leading in channel digital transformation

• Relatively single channel structure, relying on large distributors
• Weak terminal control, unable to respond quickly to market changes
• Limited distributor resources, low enthusiasm for new product promotion
• Low channel cost efficiency, compressed profit margins[1][2]

The flavor segment market of Chinese baijiu presents a clear

:

• Sauce-flavor
  : Dominated absolutely by Moutai, with consumers forming the perception that “sauce-flavor = Moutai”
• Strong-flavor
  : A competitive pattern formed by Wuliangye, Luzhou Laojiao, Yanghe, etc.
• Light-flavor
  : Led solely by Fenjiu
• Combined-flavor
  : Kouzijiao, though the “first listed company of combined-flavor baijiu”, has limited national recognition

The core challenge Kouzijiao faces as a combined-flavor liquor representative is:

[2].

Consumer Group	Proportion	Consumption Preferences
Born 1985-1994	34%	New core consumer group
Born after 1995	18%	Emerging young consumer force

• Brand aging risk
  : Young consumers have low awareness of regional liquor enterprises
• Disconnect from consumption scenarios
  : Traditional government and business scenarios for liquor have sharply decreased
• Taste acceptance
  : 62% of young consumers consider traditional liquor “spicy and stimulating”[4]

Dimension	National Famous Liquor Brands	Regional Liquor Enterprises
Brand Promotion	Hundreds of millions of yuan in CCTV advertising, digital marketing	Regional promotions with limited budgets
R&D Investment	Continuous innovation leading the industry	Follow-the-leader strategy with insufficient innovation
Talent Reserve	Attract top industry talents	Risk of talent loss
Capital Strength	Low financing costs, strong risk resistance	Limited financing channels

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In the face of difficulties, Kouzijiao has proposed multi-dimensional adjustment strategies:

• In Anhui Province, rely on the Anhui Operation Center to promote channel transformation, intensive cultivation, and sink to county and township-level markets
• Accelerate the construction of key markets outside the province, such as the Yangtze River Delta and Pearl River Delta
• Strengthen support for distributors and optimize the distributor structure

• Build an online marketing matrix
• Hold characteristic offline activities in key markets

• Launch and operate a digital marketing platform
• Establish a horizontally coordinated “supply-production-sales-inventory” operation system

Industry insiders generally believe that the problems Kouzijiao faces

.

Xiao Zhuqing, a liquor industry analyst, pointed out: “Kouzijiao is facing a

, requiring fundamental channel reform and brand reshaping”[1][2].

• Short-term (2026)
  : Focus on Spring Festival sales data; if economic recovery falls short of expectations, mid-to-high-end and regional liquor enterprises may continue to adjust[3]
• Mid-term (2-3 years)
  : Regional liquor enterprises with weak brand strength will face a longer adjustment cycle in stock competition[1]
• Long-term
  : Differentiation in the liquor industry will continue; “small but beautiful” and “specialized and sophisticated” will become realistic choices for small and medium-sized liquor enterprises[3]

Indicator	Key Focus Areas
Spring Festival Sales	Leading indicator of channel confidence recovery
Inventory Destocking	Progress of channel inventory digestion
Consumption Tax Policy	Small and medium-sized enterprises may face greater tax pressure
Wholesale Price Stabilization	Price trends of high-end liquor

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1. Kouzijiao’s performance collapse is the result of resonance between industry adjustment and its own strategic defects
   — Industry demand contraction, lagging channel model transformation, and blocked product high-end transformation have led the company to face the most severe operational crisis since its listing.

2. Regional liquor enterprises face systemic barriers in high-end transformation
   — Intertwined issues such as insufficient brand strength, weak channel control, limited flavor recognition, and aging consumer groups make it difficult to break through the 1,000-yuan price market dominated by Moutai and Wuliangye in the short term.

3. The liquor industry has entered an elimination phase of “the strong survive”
   — The six leading liquor enterprises account for 86% of the industry’s total profit, with industry concentration continuing to increase. Regional liquor enterprises with weak brand strength will face a longer adjustment cycle.

Strategic Direction	Specific Recommendations
Precise Positioning	Avoid blind high-end transformation; consolidate local markets and leverage regional advantages
Characterized Development	Take the “specialized, sophisticated, unique, and new” path, focusing on differentiated competition rather than simple imitation
Channel Restructuring	Adapt to the trend of flat and refined channels, and strengthen terminal control
Youth-oriented Transformation	Develop low-alcohol products, adopt digital marketing, and reach young consumer groups
Efficiency Improvement	Control expense ratios, implement digital operations, and improve operational efficiency

In the era of consumption differentiation, “small but beautiful” and “specialized and sophisticated” will become realistic choices for regional liquor enterprises.

[3].

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[1] Sina Finance - ‘First Profit Warning in Liquor Sector: ‘Third Largest Liquor Enterprise in Anhui’ Kouzijiao Struggles to Sell High-End Liquor’ (https://finance.sina.com.cn/jjxw/2026-01-08/doc-inhfqtym5300058.shtml)
[2] Red Star Capital Bureau - ‘Kouzijiao Expects 2025 Net Profit to Halve, Marking the Largest Annual Drop Since Listing’ (https://finance.sina.com.cn/stock/relnews/cn/2026-01-08/doc-inhfreqf5148548.shtml)
[3] Sina Finance - ‘In the Era of Consumption Differentiation, Liquor Enterprises Must Not Blindly Imitate Others’ (https://finance.sina.com.cn/roll/2026-01-08/doc-inhfqyhr1249360.shtml)
[4] Economic Information Daily - ‘Leading Liquor Enterprises Accelerate ‘Youth-Oriented’ Strategic Transformation’ (http://jjckb.xinhuanet.com/20251209/19aa80d65a4940da80e14a4cab36edf5/c.html)
[5] Caifuhao (Eastmoney Wealth Column) - ‘What’s Wrong with Liquor? When Will the Industry Emerge from the Restructuring Slump?’ (http://caifuhao.eastmoney.com/news/20260103112110351561250)