Industry Overview - The Chinese liquor industry is undergoing unprecedented structural changes due to macroeconomic shifts and generational consumption changes [1][3] - The China Alcoholic Drinks Association reports a continued decline in both volume and price in the first half of 2025, with production down 7.2% year-on-year [3] - 59.7% of liquor companies reported a decrease in operating profit, and 50.9% experienced a decline in revenue, primarily due to reduced customer numbers and average transaction values [3] Company Performance - Water Jiufang's revenue is expected to decline by 12.84% year-on-year, amounting to approximately 1.5 billion yuan, while its net profit is projected to drop by 56.52% [4][5] - Despite the overall decline, Water Jiufang's sales volume of mid-to-high-end liquor increased by 14.54%, indicating a shift towards quality and brand value [4][5] - The company maintains a reasonable inventory level, which is crucial for future growth and sustainable operations [5][6] Strategic Focus - The liquor industry is expected to focus on "strengthening fundamentals, restructuring, and innovation" as key strategies for transformation [4] - Water Jiufang is adapting to consumer demands by launching a new high-end brand and planning to introduce lower-alcohol products to cater to younger consumers [6] - The company emphasizes the importance of building a value loop around "quality, brand, and culture" as the industry shifts from growth to competition in existing markets [6]