Core Viewpoint - The Chinese liquor industry is experiencing a significant downturn, with over 15 companies reporting substantial declines in profits or expected losses, indicating a deep adjustment period for the sector [1][5]. Company Performance - Shunxin Agriculture (Niulanshan) expects a net profit of 155 to 195 million yuan for the first half of 2025, a decrease of 53.85% to 63.32% compared to over 400 million yuan in the same period last year [2][3]. - Jiu Gui Jiu anticipates a revenue of approximately 560 million yuan, down about 43%, with a net profit drop of 90.08% to 93.39%, projecting earnings of 8 to 12 million yuan [2][3]. - Shui Jing Fang forecasts a net profit of 105 million yuan, a decrease of about 137 million yuan or 56.52% year-on-year, with expected revenue of 1.498 billion yuan, down 12.84% [2][3]. - Jin Zhong Zi Jiu, *ST Yan Shi, and Huang Tai Jiu Ye are expected to report losses, with Jin Zhong Zi Jiu projecting a loss of 60 to 90 million yuan [4][5]. Industry Trends - The liquor industry is undergoing a deep adjustment, with many companies citing declining sales volumes as a key factor affecting revenue and profit levels [5][6]. - Despite an increase in sales volume, Shui Jing Fang's profits have significantly declined due to rising sales expense ratios and the need for promotional support for new products [5][6]. - Fund managers are actively adjusting their portfolios, reducing positions in companies like Gu Jing Gong Jiu and Jin Si Yuan, reflecting a cautious outlook on the sector [7][12]. Strategic Responses - Companies are focusing on terminal sales and channel penetration, with some investing in store coverage and single-store productivity to adapt to the changing market [1][14]. - Jiu Gui Jiu plans to enhance consumer purchasing intent through events and expand sales channels, while Shui Jing Fang aims to increase store coverage and improve single-store sales [13][14]. - Major liquor brands are introducing lower-alcohol products to attract younger consumers, with several companies developing new low-alcohol offerings [14].

Group 1 - Wuliangye announced the launch of a new 29-degree product "Yijian Qingshin" in September, replicating a classic formula from the last century while incorporating modern taste optimizations [1] - Luzhou Laojiao is following suit with its 38-degree Guojiao 1573, which already accounts for half of its product line, and is in the final stages of developing a lower 28-degree product [1] - Yanghe plans to focus on launching fruit-flavored liquor and a 33.8-degree micro-molecule series in the third quarter, targeting "light social" scenarios [1] Group 2 - The rise of low-alcohol beverages is driven by the younger consumer demographic, with Meituan's flash purchase data showing a tenfold increase in low-alcohol liquor sales during this year's 618 shopping festival, with the 18-35 age group contributing over 60% of sales [1] - The industry faces challenges in maintaining flavor integrity while reducing alcohol content, with technical innovations being crucial for success [1] - Traditional liquor companies are leveraging their resources and blending techniques to create a competitive edge, as over 50 low-alcohol brands have exited the market due to quality control issues [1] Group 3 - There is a regional disparity in the acceptance of low-alcohol beverages, with southern regions seeing over 65% market share, while northern markets still favor high-alcohol options [2] - Industry experts express concerns that excessive adaptation to younger tastes may lead to competition with fruit wines and foreign liquors, potentially undermining traditional white liquor [3] - Despite high-end liquor inventory turnover days reaching 867, Wuliangye's management believes that this transformation is essential for integrating white liquor into the lifestyle of younger consumers [3]