Liquidity Analysis Report on Kouzijiao's Monetary Funds

Now I have complete information. Let me provide you with a comprehensive analysis report on Kouzijiao’s liquidity status.

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First, it needs to be clarified that according to public information [1][2], the “740 million RMB” figure you mentioned does not refer to the company’s monetary funds, but rather

.

According to reports from media outlets such as The Paper [2], from 2018 to 2025, Liu Ansheng cashed out over 1.07 billion RMB through multiple share reduction operations, including a one-time cash-out of approximately 330 million RMB (10 million shares × RMB 32.92 per share) in the share reduction plan in July 2025. The cumulative cash-out from previous operations amounted to approximately 740 million RMB.

According to the company’s financial report data [0][3]:

Time Node	Consolidated Monetary Funds	Parent Company Monetary Funds	Remarks
End of 2023	1.515 billion RMB	1.066 billion RMB	-
End of 2024	1.923 billion RMB	823 million RMB	YoY increase of 26.9%
2025 Mid-Year	1.60 billion RMB	1.241 billion RMB	Sequential decrease of 16.8%

The company distributed cash dividends of approximately

in 2024 [3], and achieved operating revenue of 3.174 billion RMB and net profit attributable to parent company of 742 million RMB in the first three quarters of 2025 [3].

Assessment Dimension	Specific Indicator	Assessment Result
Short-term Solvency	Current ratio 3.88 (end of 2024)	Excellent, far exceeding the 2.0 safety line
Cash Reserves	Monetary funds of 1.6-1.9 billion RMB	Adequate, accounting for approximately 27% of annual operating revenue
Debt Structure	Asset-liability ratio of approximately 23%	Conservative, low-leverage operation
Borrowing Status	Short-term borrowings = 0	No debt repayment pressure
Dividend Capacity	Cash dividend ratio >30%	Sustained returns to investors

Risk Point	Specific Performance	Impact Analysis
High Inventory Proportion	Inventory of 5.835 billion RMB, accounting for 64% of current assets	Characteristic of the baijiu industry, but occupies a large amount of capital
Low Quick Ratio	0.35-0.60	Limited liquidity after excluding inventory
Downward Trend in Cash	1.923 billion RMB → 1.60 billion RMB	Need to pay attention to capital utilization efficiency
Industry Cycle Pressure	In-depth adjustment of the baijiu industry	Sluggish terminal sales, inventory backlog

Based on calculations using 2024 financial report data [0][3]:

Current Ratio = Current Assets / Current Liabilities ≈ 3.88
Quick Ratio = (Current Assets - Inventory) / Current Liabilities ≈ 0.60
Monetary Fund Coverage Ratio = Monetary Funds / Current Liabilities ≈ 107%

1. The actual scale of the company’s monetary funds is 1.6-1.9 billion RMB
   , far exceeding the 740 million RMB figure you mentioned

2. Liquidity pressure assessment: Low risk
   • A current ratio of 3.88 indicates that current assets sufficiently cover current liabilities
   • No short-term borrowings, with adequate cash reserves
   • Sustained positive operating cash flow
   • Asset-liability ratio is only 23%, with healthy financial leverage

3. Main risk sources
   : Not liquidity issues, but:
   • Operating pressure from the baijiu industry entering an adjustment period [2][3]
   • Provincial market share being squeezed by Gujing Gongjiu and Yingjia Gongjiu [2]
   • Failure to meet equity incentive targets (2024 revenue growth rate of 0.89% missed the 30% target) [2]

1. Industry Risk
   : Downward demand in the baijiu industry, with continuous channel transformation [2]
2. Performance Risk
   : Net profit is expected to decline by 50%-60% year-over-year in 2025 [2]
3. Market Risk
   : The stock price has fallen by 20.31% cumulatively in 2025, deviating from the performance of the Shanghai Composite Index [2]
4. Liquidity Risk
   : Slow inventory turnover and long cash conversion cycle

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[0] Jinling API Financial Data (603589.SS)

[1] Eastmoney.com - Kouzijiao Shareholder Share Reduction Data (https://www.eastmoney.com)

[2] The Paper - “For Debt Repayment! Kouzijiao Veteran Shareholder Extends Pledge After Frequent Cash-Outs” (https://m.thepaper.cn/newsDetail_forward_32376518)

[3] Sina Finance - Semi-Annual Evaluation Report on Kouzijiao’s 2025 “Improve Quality, Enhance Efficiency, Prioritize Returns” Action Plan (https://finance.sina.com.cn/roll/2026-01-13/doc-inhhchnf5082778.shtml)

[4] Anhui Kouzijiao Liquor Co., Ltd. 2024 Annual Report (http://static.cninfo.com.cn/finalpage/2025-04-29/1223370055.PDF)