Anhui Kouzi Distillery Co Ltd

Financial Associated Press, August 27 — Amid a deep correction in the baijiu industry, Kouzijiao released its 2026 interim report. First-half revenue was 1.952 billion yuan, down 22.89% year-on-year, and net profit attributable to the parent was 365 million yuan, down 48.97% year-on-year. Second-quarter revenue was 576 million yuan, down 20.03% year-on-year, while net profit attributable to the parent was 36 million yuan, a sharp drop of 65.43% year-on-year, far exceeding the 15% to 30% decline estimated by multiple brokerages including China Merchants Securities and Huachuang Securities. Premium baijiu revenue fell 24.43% year-on-year in the first half, becoming the main drag, while mid- and low-end liquor achieved only single-digit growth. Contract liabilities fell about 57% year-on-year to 129 million yuan, indicating insufficient willingness among distributors to stock up. The company judges that the industry is in a stage of weak recovery and stock competition. In the second half, it will prioritize consolidating foundations and stabilizing prices, deepen penetration of county and district terminals within the province, scale back expansion outside the province, and focus on building a model market in the Yangtze River Delta.

Kouzijiao disclosed its 2026 semi-annual report on August 27. During the period, it achieved operating revenue of 1.952 billion yuan, down 22.89% year on year, and net profit attributable to shareholders of the listed company of 365 million yuan, down 48.97% year on year. The company said the change in performance was mainly due to lower operating revenue, and because the declines in administrative expenses and selling expenses were smaller than the decline in revenue.

Kouzijiao released its 2026 semi-annual report, achieving operating revenue of 1.952 billion yuan, down 22.89% year on year; net profit attributable to shareholders of the listed company was 365 million yuan, down 48.97% year on year. The decline in performance was mainly due to a decrease in operating revenue during the reporting period, while the declines in administrative expenses and selling expenses were both smaller than the decline in operating revenue. Among them, net profit in the second quarter was 36 million yuan, and net profit in the first quarter was 329 million yuan, with second-quarter net profit down 89% quarter on quarter.

Kouzijiao confirmed at its 2025 annual and first-quarter 2026 results briefing that the company will not renew its contract with McKinsey and will independently continue to deepen channel reforms in 2026. This marks the end of a four-year external strategic consulting partnership that began in 2022 when McKinsey was brought in to refine brand strategy and drive product and organizational upgrades. Financial data shows that consulting service fees from 2022 to 2025 were 12.8887 million yuan, 38.2691 million yuan, 30.0746 million yuan, and 23.3361 million yuan respectively, totaling over 100 million yuan over the four years. However, the heavily funded external brain trust failed to deliver the expected growth. In 2025, the company's revenue plunged to 3.991 billion yuan, down 33.65 percent year-on-year, and net profit attributable to shareholders fell to 673 million yuan, down 59.32 percent, moving further away from the 10-billion-yuan revenue target. The company stated it will focus on improving channel quality, enhancing collaboration with manufacturers, and empowering distributors, while solidifying its core base in its home province by strengthening brand momentum and deepening refined operations.

Kouzijiao recently disclosed an investor relations activity record, sending a clear signal of adjustment. In 2025, the company achieved revenue of 3.991 billion yuan, down 33.65 percent year-on-year; net profit of 673 million yuan, down 59.32 percent year-on-year; and net cash flow from operating activities turned from positive to negative, reaching minus 216 million yuan. In the first quarter of 2026, revenue and net profit both declined again, falling 24 percent and 46 percent respectively. In its home market of Anhui, Kouzijiao's provincial revenue was about 3.2 billion yuan, a year-on-year drop of over 34 percent, as it faces a pincer attack from Gujing Gongjiu and Yingjia Gongjiu. Gujing Gongjiu's provincial market share has reached 36 percent, while Yingjia Gongjiu's revenue is about 6.019 billion yuan. Kouzijiao has lost its position as the second-largest Huizhou baijiu maker. The company said the provincial revenue decline resulted from intensified industry competition, a weak consumption environment, and proactive inventory control and price stabilization. Going forward, it will focus on the price band above 100 yuan and deepen refined channel operations to restore terminal sell-through. In addition, the pan-in-pan marketing model that once made Kouzijiao famous has lost its effectiveness. In 2025, the number of distributors increased by 184, but wholesale agency revenue plummeted 36.4 percent, trapping the company in a situation of adding distributors without adding revenue. The company stated that its out-of-province distributor recruitment is still in the cultivation stage, making it difficult to release scale revenue in the short term, and the channel profit model is undergoing restructuring.