Core Viewpoint - The Australian wine giant Treasury Wine Estates (TWE) has adjusted its performance expectations for the fiscal year 2026 due to weaker-than-expected sales in the Chinese market, leading to a temporary halt of its previously initiated AUD 200 million share buyback plan [2][10]. Group 1: Market Dynamics - The Chinese wine market has undergone significant changes, impacting not only baijiu but also international wine brands like Penfolds [2]. - Following the removal of anti-dumping duties on Australian wines in 2024, Penfolds has regained its position as the largest source of imported wine in China, contributing to record net sales for TWE in fiscal year 2025 [3][6]. - However, since the second quarter of this year, there has been a notable decline in wine consumption driven by changes in business banquet scenarios, which has adversely affected Penfolds [4][10]. Group 2: Pricing and Sales Trends - Since June, the market prices for Penfolds' major products, BIN 389 and BIN 407, have dropped significantly, with prices falling by 30 to 50 CNY compared to post-Spring Festival levels [4][7]. - As of September, the wholesale prices for BIN 389 and BIN 407 have decreased to below 450 CNY and 670 CNY, respectively, with e-commerce prices even lower [7][9]. - The decline in sales inquiries and orders has been observed since mid-year, with a notable drop in business banquet-related purchases [9]. Group 3: Financial Performance and Future Outlook - TWE's overall net sales and earnings before interest and taxes (EBIT) saw significant increases in fiscal year 2025, with EBIT rising by 17% and net sales in the Asian market increasing by nearly 20% [10]. - Initially, TWE projected low to mid-double-digit EBIT growth for fiscal year 2026, but the rapid cooling of the Chinese market has led to a reassessment of these expectations [10][12]. - TWE has decided to reallocate Penfolds' products to other markets and control the risk of parallel imports into China, while also exploring partnerships, such as the recent collaboration with Langjiu to launch limited edition products [12].