Analysis of the Gross Margin Gap Between ST Rock's Baijiu Business and the Industry Average

Based on the obtained financial data and market research reports, I have completed an analysis of the gross margin gap between ST Rock’s baijiu business and the industry average.

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Year	ST Rock Gross Margin	Baijiu Industry Average Gross Margin	Gap (Percentage Points)
2020	54.41%	76.50%	22.09
2021	63.92%	78.20%	14.28
2022	67.43%	79.80%	12.37
2023	75.05%	81.00%	5.95
2024	56.96%	81.80%	24.84

• The latest gap reached 24.84 percentage points in 2024
  , the largest gap in recent years
• The five-year average gap is
  15.91 percentage points
  , indicating that ST Rock’s gross margin level has been significantly lower than the industry average for a long period [0][1]

• ST Rock’s gross margin continued to improve from 2020 to 2023, rising from 54.41% to 75.05%
• It deteriorated sharply in 2024
  , with gross margin plummeting to 56.96%, a decrease of 18.09 percentage points compared to 2023 [0]
• In stark contrast, the baijiu industry’s average gross margin rose steadily to 81.8% [1]

• The gap narrowed to 5.95 percentage points in 2023, indicating improvement in the company’s operations
• The gap widened sharply to 24.84 percentage points in 2024, reflecting a serious deterioration in the company’s operating conditions [0][2]

Factor	Explanation
Insufficient Brand Premium Power	As a regional baijiu enterprise, it lacks the high-end pricing power of leading brands such as Moutai and Wuliangye [1]
Low-End Product Structure	High proportion of mid-to-low-end products, making it difficult to achieve high gross margins [1]
Lack of Scale Effect	Revenue plummeted 82.54% to RMB 285 million in 2024, unable to spread fixed costs [2]
Collapse of Channel System	The number of dealers dropped sharply from over 4,000 to 772, severely damaging the sales system [2]
Weak Cost Control Capability	Cost-to-revenue ratio is as high as 43%, far exceeding the industry average of 18.2% [0]

According to the baijiu industry research report, the 2024 gross margin performance of various liquor enterprises [1]:

Enterprise Type	2024 Gross Margin	Gap with ST Rock
High-End Liquor (Moutai, etc.)	86.9%-91.9%	29.9%-34.9%
National Mid-to-High-End	74.7%-82.8%	17.7%-25.8%
Regional Leader	~75%	~18%
ST Rock	56.96%	—

1. Extremely High Delisting Risk
   : The company’s 2025 revenue is expected to be below RMB 300 million, and its net profit is negative, which has triggered the financial delisting criteria [2][3]
2. Actual Controller Risk
   : Han Xiao, the actual controller, has been taken criminal compulsory measures on suspicion of illegal fundraising [2]
3. Going Concern Doubt
   : It has been issued a qualified audit report for three consecutive years [2]
4. Loss in Trademark Dispute
   : It is required to stop using the “Guijiu” name, resulting in significant loss of brand assets [2]

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Chart Description: The left chart shows the comparison of gross margin between ST Rock and the industry average; the right chart shows the change trend of the gap over five years, with the gap expanding significantly in 2024.

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There is a

between the gross margin of ST Rock’s baijiu business and the industry average. The 24.84 percentage point gap in 2024 hit a record high, reflecting a sharp deterioration in the company’s operating conditions. Compared with industry leaders (Moutai’s gross margin is 91.9%), the gap is as high as 35 percentage points. This huge gap mainly stems from insufficient brand strength, low-end product structure, and the complete collapse of the sales system. In view of the multiple risks faced by the company, investors should exercise extreme caution.

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[0] Jinling API Financial Data - Annual Income Statement Data of ST Rock (600696.SS)

[1] Dongfang Fortune Securities Research Report - 2024 Annual Report & 2025 Q1 Report Overview of the Baijiu Industry (http://pdf.dfcfw.com/pdf/H3_AP202505211676443536_1.pdf)

[2] Jiemian News - Shanghai “Guijiu” A-Shares Delisting Enters Countdown (https://m.jiemian.com/article/13886711.html)

[3] The Economic Observer - *Over 94% Evaporated from Historical High, ST Rock Locked in for Delisting (http://www.eeo.com.cn/2026/0113/779014.shtml)