Core Viewpoint - Kouzi Jiao's performance in the first half of 2025 shows significant declines in both revenue and net profit, primarily due to reduced sales of high-end liquor, reflecting broader challenges in the liquor industry [1][2]. Financial Performance - In the first half of 2025, Kouzi Jiao achieved operating revenue of approximately 2.531 billion yuan, a year-on-year decrease of 20.07% [1]. - The net profit attributable to shareholders was about 715 million yuan, down 24.63% year-on-year [1]. - High-end liquor sales revenue was around 2.385 billion yuan, experiencing a decline of 19.80% compared to the previous year [1]. Industry Context - The liquor industry is facing intensified market differentiation and channel changes, with continuous production declines and slowing sales growth [1]. - Factors such as sluggish consumer demand, poor sales dynamics, and high inventory levels have become common challenges within the industry [1]. - The competitive landscape is increasingly fierce, with numerous liquor producers in the Huaihe River basin and notable competition from brands in Guizhou, Sichuan, and Shanxi [1]. Strategic Response - In response to the challenging industry environment, Kouzi Jiao is maintaining strategic focus on three upgrades: market upgrade, structural upgrade, and brand upgrade [2]. - The company is pragmatically adjusting its tactical approach in line with market rhythms [2].

Company Performance - In the first half of 2025, the company reported revenue of 2.531 billion yuan, a year-on-year decrease of 20.07% [2] - The net profit attributable to the parent company was 715 million yuan, down 24.63% year-on-year [2] - The net profit after deducting non-recurring items was 698 million yuan, a decline of 24.90% year-on-year [2] - The net cash flow from operating activities was -383 million yuan, compared to 39.258 billion yuan in the same period last year [2] Quarterly Performance - In the second quarter of 2025, the company's revenue fell by 48.48% to 721 million yuan year-on-year [2] - The net profit for the second quarter decreased by 70.91% to 105 million yuan year-on-year [2] - The net profit after deducting non-recurring items in the second quarter dropped by 73.41% to 91.26 million yuan year-on-year [2] - The net cash flow from operating activities in the second quarter was -137 million yuan, compared to 108 million yuan in the same period last year [2] Industry Context - The white liquor industry is experiencing market differentiation and intensified channel changes, leading to continuous production decline and slowed sales growth [3] - The overall industry is under pressure, with decreased demand, sluggish sales, and high inventory becoming the norm [3] - The company's direct sales (including group purchases) revenue increased by 44.57% year-on-year, but total sales revenue decreased by 19.30% due to a decline in wholesale and agency income [3] - The company is focusing on three core e-commerce channels: JD.com, Tmall, and Douyin, enhancing its e-commerce operational capabilities and expanding marketing through digitalization [3]