Jiugui Liquor Co., Ltd. (Jiugui Liquor) saw a sharp decline in its net profit in the first half of this year, with a year-on-year decrease of 92.60% for its net profit attributable to shareholders, and a drop of 92.79% for its non-GAAP net profit. The company attributed this slide in performance to the deep adjustment taking place in the Chinese liquor industry.
In its “2025 Interim Report” released on August 23, Jiugui Liquor reported that in the first half of 2025, the company generated operating income of 561 million yuan, representing a 43.54% decrease compared to the previous year. The net profit attributable to shareholders was 8.955 million yuan, down by 92.60% year-on-year, and the non-GAAP net profit also fell by 92.79% to 8.4207 million yuan. Specifically, the net profit attributable to shareholders in the second quarter of 2025 recorded a loss of 2.3 million yuan, plummeting by 147.77% year-on-year, while the non-GAAP net profit showed a loss of 2.3 million yuan, a decline of 148.77%.
Jiugui Liquor attributed its declining performance to the profound adjustment in the liquor industry. The company mentioned in its report that under the overall pressure faced by the liquor industry and the exacerbation of the Matthew effect, small and medium-sized enterprises are encountering significant operational pressures, with distributors becoming more cautious in payments, leading to a noticeable impact on business performance.
Looking at the data, Jiugui Liquor has already experienced two consecutive years of substantial declines in performance.
According to a report from “Manager Magazine”, in 2023, Jiugui Liquor’s revenue was 2.829 billion yuan, down by 30.14% year-on-year; net profit attributable to shareholders was 548 million yuan, a decrease of 47.77%. In 2024, the company’s revenue dropped to 1.423 billion yuan, a 49.7% decrease, with net profit attributable to shareholders at 12.4933 million yuan, down by 97.72%.
“Manager Magazine” believes that Jiugui Liquor’s continuous decline in performance is mainly a result of overstretching the market and distributors.
In 2019, Jiugui Liquor proposed a slogan to return to the forefront of the liquor industry. The company rapidly expanded its network of distributors, adding a cumulative total of 1,058 distributors from 2020 to 2022, reaching a total of 1,576 distributors by 2022. During this period, the company achieved a surge in performance by pushing products to distributors. However, Jiugui Liquor failed to establish a mutually beneficial relationship with its distributors, as it did not actively assist them in managing inventory. As a result, amidst a significant overall inventory pressure in the industry, performance stalled and distributors started to leave.
In the first half of 2025, the number of Jiugui Liquor distributors decreased to 805, a net reduction of 531 compared to the end of 2024, continuing the trend of losses from the previous year. In 2024 alone, the number of Jiugui Liquor distributors decreased from 1,774 to 1,336, resulting in a net loss of 438 distributors.
Faced with declining profits, Jiugui Liquor outlined a “2+2+2” strategic single product system in the first half of this year. The strategy focuses on core flagship products, promotes the upgrading of major products and the launch of new featured products, and aims to solve distributor inventory issues through enhanced supervision and management controls, as well as targeted sales reinforcement.
However, the financial data shows that the effectiveness of these efforts has been limited.