SCSF(SH:600779) Xin Lang Cai Jing·2025-09-12 10:37Core Insights - The Chinese liquor industry is entering a period of accelerated clearing, with significant declines in production and profits observed in the first half of 2025 [1][2] - The market is experiencing increased inventory pressure among distributors, leading to a negative feedback loop affecting the delivery pace of liquor companies [1][2] - A notable shift in the growth logic of the liquor industry is occurring, with both volume and price declining, contrasting with previous trends of volume reduction coupled with price increases [2][3] Industry Performance - In the first half of 2025, the total production of the liquor industry was 1.9159 million kiloliters, a year-on-year decrease of 5.8%, while sales revenue reached 330.42 billion yuan, a slight increase of 0.19% [1] - Profit for the industry was 87.687 billion yuan, reflecting a year-on-year decline of 10.93% [1] - 68% of listed liquor companies reported a decline in revenue, with 13 out of 19 companies experiencing this downturn [1][2] Market Dynamics - The market is increasingly favoring leading liquor companies, with the top six companies accounting for 47% of revenue and 62.2% of total profits, marking a 13 percentage point increase over five years [2] - The median revenue growth rate for liquor companies with over 10 billion yuan in revenue was 2.36%, while those below this threshold saw a median decline of 16.89% [2] Pricing Trends - The wholesale price index for liquor has been declining, with notable price drops for major brands such as Moutai and Wuliangye [3] - Moutai's price fell from 2,660 yuan to 1,820 yuan, while Wuliangye's price decreased from 960 yuan to 860 yuan [3] Expense Management - Despite declining revenues, many liquor companies have increased their expenditure, with 58% of companies raising their sales expense ratios [3][4] - The highest sales expense ratio was recorded at 36.35% for Shui Jing Fang, up from 34.7% the previous year [3][5] - The management expense ratio for some companies has also increased, with Huan Tai Wine leading at 23.59% [6][7] Profitability Challenges - The profitability of smaller liquor companies is under pressure, with some facing losses and others struggling to break even [8][9] - In contrast, most leading companies have managed to reduce their management expense ratios, indicating a divergence in financial health within the industry [9]