Once hailed as a dark horse in the baijiu industry, Anhui Yingjia Distillery Co.,Ltd., the "runner-up of Hui liquor brands," appears to be losing momentum amid the industry's harsh winter.
On the evening of August 25, Anhui Yingjia Distillery Co.,Ltd. (Stock Code: 603198.SH) disclosed its interim results for 2025. The financial report showed that the company achieved revenue of 3.16 billion yuan in the first half of the year, down 16.89% year-over-year, and net profit attributable to shareholders of 1.13 billion yuan, down 18.19%.
Notably, this performance with double-digit declines in both revenue and net profit represents the worst results for Anhui Yingjia Distillery since its high-speed growth period in 2021. As one of the "four golden flowers" of Hui liquor, the company had previously overtaken Kouzi Jiao, the former "provincial runner-up," two years ago to successfully claim the second position among Hui liquor brands.
Now, judging from the significant decline in multiple key operational indicators, Anhui Yingjia Distillery may not only struggle to maintain its "second-place position" but also face considerable difficulty in achieving its previously set annual performance targets.
**A Challenging 10th Anniversary of Listing**
The year 2025 holds special significance for Anhui Yingjia Distillery: it marks both the 70th anniversary of the distillery's establishment and the historic 10th anniversary of the company's public listing.
According to public records, the history of Yingjia Tribute Liquor can be traced back to 106 BC when Emperor Wu of Han toured Huoshan, and officials and citizens welcomed him with fine wine, hence the name "Yingjia Tribute Liquor." In 1955, its predecessor, Fozilin Distillery, was established by several private workshops in the mountain-surrounded Huoshan County. In 1958, the distillery completed public-private partnership transformation, becoming a state-owned enterprise. For a long time thereafter, Anhui Yingjia Distillery quietly accumulated market experience and brand recognition through product series such as "Fozilin Daqu," "Fozilin Special Brew," and "Zaofang."
2015 was the golden turning point for Anhui Yingjia Distillery's takeoff. The company successfully listed on the Shanghai Stock Exchange main board, becoming Anhui's third and China's 16th listed baijiu enterprise. That same year, its "Ecological Cave-Aged" series targeting the mid-to-high-end market was launched and quickly became a core flagship product with revenue exceeding 1 billion yuan.
A review of historical performance shows that the company's total annual revenue was still around 3 billion yuan at the time, trailing behind Jiannanchun and Kouzi Jiao within the province. However, over the subsequent decade (2015-2024), Anhui Yingjia Distillery increased its annual revenue by 4.4 billion yuan and multiplied its net profit by more than five times. Starting from 2023, its revenue and net profit surpassed Kouzi Jiao, securing the "provincial runner-up" position for two consecutive years.
This year's performance by Anhui Yingjia Distillery can be described as a cliff-like decline. Regarding the reasons for the decline, the company mainly attributed it to industry conditions in its financial report: "In 2025, the liquor industry entered a new round of policy adjustment period, consumption structure transformation and differentiation period, and a deep adjustment period of inventory competition. National Bureau of Statistics data shows that from January to June 2025, the cumulative output of large-scale industrial baijiu was 1.916 million kiloliters, down 5.8% year-over-year."
While the deteriorating external environment is an objective fact, when examining specific operational indicators, such explanations may not be entirely convincing. After all, apart from national leaders like Kweichow Moutai, fellow Hui liquor brand Jiannanchun continues to grow.
From a product performance perspective, Anhui Yingjia Distillery's mid-to-high-end baijiu (Cave-Aged, Gold Star, Silver Star series) achieved revenue of 2.537 billion yuan in the first half, down approximately 14% year-over-year; ordinary baijiu (Century Yingjia Tribute, Zaofang series) revenue was only 452 million yuan, plummeting 32.47% year-over-year.
Notably, its strategic weapon "Cave-Aged series," with ecological brewing as its core concept, already accounts for nearly 60% of total revenue. However, such concentrated product lines also mean high risk - once "Ecological Cave-Aged" growth weakens, overall performance becomes passive. Anhui Yingjia Distillery now shows tendencies of "high-end decline and low-end collapse."
In recent years, Anhui Yingjia Distillery has also attempted to use "Cave-Aged" as a spearhead to break through provincial market barriers, but results appear limited. In the first half, its regional dependence remained significant: provincial revenue was 2.364 billion yuan, down 12% year-over-year; out-of-province revenue was 625 million yuan, down over 30% year-over-year. This indicates that Anhui Yingjia Distillery not only faces setbacks in provincial expansion but also experiences some loosening in its foundational Anhui market.
Additionally, Anhui Yingjia Distillery's operating cash flow in the first half was 317 million yuan, nearly halved compared to the same period last year (down 48.3%); contract liabilities, symbolizing the performance reservoir, were 440 million yuan, down nearly 5% year-over-year; accounts receivable dropped significantly by 65.55% from 195 million yuan at the beginning of the year to 67 million yuan.
Against this backdrop, Anhui Yingjia Distillery is not only moving further away from the "10 billion target" proposed in 2017, but even the 2025 annual targets set in May this year seem somewhat optimistic. The company projected revenue of 7.6 billion yuan for this year, up 3.49% year-over-year, and net profit of 2.62 billion yuan, up 1.00% year-over-year.
Currently, these targets are 41% and 43% completed respectively. Without significant improvement going forward, delivery pressure remains high. In the second half, Anhui Yingjia Distillery's revenue and net profit growth rates need to be at least 24% and 22% respectively.
**Focused Defense of "Second-Tier Hui Liquor" Position**
In the baijiu sector, "Don't enter Sichuan from the west, don't enter Anhui from the east" is a tacitly understood industry rule.
This stems mainly from the strong competitive capabilities of enterprises in Sichuan and Anhui provinces. Among China's approximately 20 listed baijiu companies, Sichuan (Wuliangye, Jiannanchun, Shede, Shuijingfang) and Anhui (Jiannanchun, Anhui Yingjia Distillery, Kouzi Jiao, Golden Seed Winery) together account for nearly half.
Focusing on the Anhui baijiu market, all four major listed liquor companies have disclosed their results, recording combined revenue of 20.055 billion yuan and continuing to show a "one dominant, many strong" industry pattern. Except for Jiannanchun, the "leading Hui liquor brand," which maintained growth, the other three companies all experienced performance declines.
Financial reports show that Jiannanchun (Stock Code: 000596.SZ) achieved double growth in revenue and net profit in the first half, adding a bright spot to the Hui liquor sector. It realized revenue of 13.88 billion yuan in the first half, up 0.54% year-over-year, and net profit attributable to shareholders of 3.662 billion yuan, up 2.49% year-over-year.
Regarding Jiannanchun's strong performance, independent liquor industry commentator Xiao Zhuqing believes the main reasons include: 1) Continued high growth and good sales momentum in its home base Anhui market; 2) Core products have initially completed national layout, with brand momentum further released, achieving breakthroughs in out-of-province channels including Henan, Hubei, Shandong, and Beijing; 3) Steady implementation and significant growth of sub-premium strategy, with further improvement in product structure.
From interim revenue alone, Anhui Yingjia Distillery now trails Jiannanchun by over 10 billion yuan, with the gap widening. Moreover, Kouzi Jiao (Stock Code: 603589.SH) is closely pursuing from behind, eyeing the second position. In the first half, Kouzi Jiao achieved revenue of 2.531 billion yuan, down nearly 20% year-over-year, and net profit attributable to shareholders of 711 million yuan, down 24.63%. Although Kouzi Jiao is also declining, its gap with Anhui Yingjia Distillery is clearly narrowing: in 2024, Anhui Yingjia Distillery's 7.344 billion yuan revenue led by 1.3 billion yuan, but the first-half lead was only about 600 million yuan.
However, Golden Seed Winery (Stock Code: 600199.SH) faces an obviously more severe situation: first-half revenue of 484 million yuan, down 27.47% year-over-year; net profit attributable to shareholders lost 72.1968 million yuan, plummeting 750.54% year-over-year. Its premium product - the Fuhexiang series - recorded sales revenue of only 37.2785 million yuan, less than even the annual advertising expenses of 46.8711 million yuan, with further loss of provincial market share.
For Anhui Yingjia Distillery, it needs to defend against suppression from Jiannanchun within the province while responding to pursuit from Kouzi Jiao, and also faces threats from out-of-province giants like Kweichow Moutai and Wuliangye entering Anhui to compete for market share. Facing performance challenges and market competition, Anhui Yingjia Distillery seems determined to focus on its baijiu core business.
Recently, it announced the sale of 100% equity in its subsidiary Anhui Yingjia Business Hotel Co., Ltd. for a transaction price of 31.7265 million yuan. The counterparty, Anhui Yingjia International Travel Service Co., Ltd., is controlled by the controlling shareholder, constituting a related-party transaction.
Public information shows that Yingjia Business Hotel was established in March 2024 with registered capital of 30 million yuan. This entity operates a Ji Hotel (Huoshan Yingjia Avenue branch) through franchise, with 132 rooms. The hotel achieved operating revenue of 5.7424 million yuan and net profit of 563,800 yuan last year; however, in the first half of this year, the hotel realized revenue of 3.1316 million yuan with a net loss of 543,100 yuan.
Regarding this, Anhui Yingjia Distillery stated, "Yingjia Business Hotel has been in loss or marginal profit status for the past two years due to the hotel's remote geographical location and small local population base, resulting in low overall occupancy rates. This equity transfer aims to further optimize assets, management structure, and integrate resources, focusing on the company's main business, which aligns with the company's operational development needs."
However, it's noteworthy that Anhui Yingjia Distillery seems to lack clear plans for product innovation. Currently, against the backdrop of a shrinking baijiu market, leading liquor companies are all attempting to break through by increasing investments in low-alcohol beverages, bottled liquor, cross-industry collaborations, and instant retail channels. Taking low-alcohol beverages as an example, Wuliangye announced it will launch 29-degree products and craft beer; Jiannanchun launched the 26-degree "Vintage Original Liquor·Gu 20" in August this year; Jiannanchun produces Guojiao 1573 with a classic alcohol content of 52 degrees, but 38-degree liquor has now become its main product accounting for about 50% of sales, 28-degree liquor has also been successfully developed, and the company is considering launching ultra-low-alcohol beverages of 16 degrees and 6 degrees.
However, being slow once may mean being slow at every step. Industry analysts point out that when industry leaders and emerging forces are seizing incremental markets through youth-oriented strategies, if Anhui Yingjia Distillery fails to timely supplement its product matrix adapted to younger demographics and relies solely on traditional "Cave-Aged" advantages, it may face user stratification risks.
"It will be difficult to penetrate young consumer markets for new growth while potentially gradually losing market vitality due to the solidified age structure of core customer groups."
Whether Anhui Yingjia Distillery can successfully complete its established targets, maintain its "Hui liquor runner-up" position, and smoothly navigate through the industry's dangerous period remains to be observed.
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