Regional cultivation and channel restructuring position Yanghe for future recovery.
In the first half of 2025, the baijiu industry faced tremendous pressure as the landscape of stock competition accelerated its evolution. Confronting the industry's deep adjustment period, Jiangsu Yanghe Distillery Co.,Ltd. (002304.SZ) positioned itself for second-half recovery through proactive strategic adjustments.
On the evening of August 18, Jiangsu Yanghe Distillery Co.,Ltd. released its first-half 2025 performance report. The semi-annual report showed that the company achieved operating revenue of 14.796 billion yuan and net profit attributable to shareholders of 4.344 billion yuan in the first half.
Behind this performance lies Yanghe's implementation of a deep inventory reduction strategy. The company has led the industry since the second half of 2023 by reducing performance growth rates in exchange for healthy and stable channel ecosystems.
Huaxin Securities believes that with current pressure on baijiu market consumption, the company has entered a deep reform period with decelerated adjustments. With management changes now implemented, the company's continued cargo control and price stabilization efforts to release channel pressure, supported by brand foundations, are expected to gradually yield positive reform results.
**Short-term Performance Pressure, Building Long-term Strength**
While China's economic recovery shows overall positive trends, it still faces challenges including insufficient domestic effective demand and complex external environments, bringing significant uncertainty to baijiu industry development. Jiangsu Yanghe Distillery Co.,Ltd. directly acknowledged in its financial report that industry prosperity continues under pressure, with stock competition patterns accelerating evolution and industry concentration and differentiation trends becoming more prominent.
With the arrival of the rational consumption era, consumers increasingly favor more comfortable and cost-effective baijiu products. This consumption shift compels liquor companies to adjust strategies, and Yanghe is no exception.
In the first half of 2025, Jiangsu Yanghe Distillery Co.,Ltd. focused on long-term and rational development, combining current environmental conditions to manage operational rhythm while prioritizing solutions to development challenges. Facing market changes, the company made inventory reduction a key task for 2025. The company concentrated on Jiangsu's local market and high-ground markets outside the province, using bottle opening as policy guidance while controlling volume and stabilizing prices for leading products like Dream Six Plus and Haizhi Blue.
In February 2025, Jiangsu Yanghe Distillery Co.,Ltd. suspended sales orders for the sixth-generation Haizhi Blue to create market space for the seventh-generation launch. Simultaneously, the company implemented volume control and price stabilization for M6+, comprehensive cargo control for Haizhi Blue within the province, and actively promoted sales to reduce inventory.
These measures achieved significant results. In the first half of 2025, Yanghe's baijiu sales volume decreased 32.4% year-over-year to 78,000 tons, accelerating channel inventory clearance through reduced shipments. During the same period, the company's baijiu inventory decreased by over 30% to 16,000 tons, reaching the lowest level for the same period since the first half of 2021.
Research reports from Huachuang Securities show that Yanghe's overall inventory declined 10% in the first half, with Jiangsu province declining over 10% and some regions declining by more than 30%.
Baijiu industry analyst Xiao Zhuqing believes that Yanghe's short-term performance adjustments represent strategic preparation, with decelerated growth being an inevitable choice for "inventory reduction, structure optimization, and quality improvement" during the industry's deep adjustment period. Against the backdrop of high inventory levels and price inversions in the current baijiu industry, Yanghe's restraint on short-term performance represents strategic protection of channels.
While addressing these issues, Jiangsu Yanghe Distillery Co.,Ltd. focused on leading products and key markets, strengthening quality expression and reputation leadership, further solidifying foundations for sustainable development.
Specifically, in 2025, Yanghe proposed "building a brand system centered on consumer operations," focusing on dual efforts in products and markets. Under this framework, Yanghe positioned "quality upgrading" as the core breakthrough, comprehensively promoting transformation from "channel-driven" to "user-driven" approaches. This aligns with the industry's core direction of transitioning from "scale growth" to "value growth."
Currently, the company has wine storage capacity of 1 million tons, including 700,000 tons of base liquor storage, 230,000 tons of ceramic jar base liquor, and annual base liquor production capacity of 160,000 tons. Its solid-state liquor production capacity, high-quality base liquor storage capacity, ceramic jar storage scale, and aged mianrou liquor volume all rank first globally.
Following the semi-annual report release, multiple securities firms including Guohai Securities, Dongwu Securities, Guoxin Securities, and China Merchants Securities gave Yanghe buy and overweight ratings. Founder Securities believes that during industry adjustment periods, liquor companies should focus on core markets and strengthen channel organization and consumer cultivation to consolidate market share. Current Yanghe report risks are further released, with future focus on product upgrades and channel reform effectiveness to solidify development foundations for new growth rounds. Huaxi Securities believes that Yanghe firmly clears risks and releases adjustments, with corrections nearing completion.
**Increased R&D Investment Improves Liquor Quality** **59-yuan Blue Yanghe Ignites Consumer Enthusiasm**
While reducing inventory, Jiangsu Yanghe Distillery Co.,Ltd. actively positioned for future growth points.
Yanghe mentioned in its semi-annual report that baijiu's core consumer groups are gradually completing generational consumption migration, with changes in group structure, consumption demands, and concepts having certain impacts on industry development. The company will persist in consumer demand orientation, conduct in-depth consumer insights and research, and effectively meet diversified consumer needs through product innovation, experience innovation, and model innovation.
Industry data shows that the bottled liquor market has continued growing in recent years, breaking through the 150 billion yuan threshold in 2024, with expectations to reach 200 billion yuan in 2025. The 50-100 yuan price segment grew over 40%, becoming the baijiu industry's most dynamic growth driver.
Jiangsu Yanghe Distillery Co.,Ltd. keenly captured this trend, positioning high-end bottled liquor as an important strategic component. On June 22, Yanghe and JD.com held a "Brothers Unite, Create Future Together" strategic launch event in Baotou, Inner Mongolia, jointly introducing Yanghe Daqu high-end bottled liquors: Blue Yanghe and Golden Yanghe. Golden Yanghe has a market price of 89 yuan, Blue Yanghe 59 yuan, targeting the 50-90 yuan price segment.
Blue Yanghe, a seemingly simple product, quickly created sales miracles: online presales sold out instantly, sales exceeded 10,000 bottles within 48 hours, and it topped JD.com's baijiu bestseller charts.
China Alcoholic Drinks Association President Song Shuyu evaluated Yanghe Daqu high-end bottled liquors, believing they "redefined bottled liquor value benchmarks with quality as the core," achieving "making quality accessible." He noted that in the rational consumption era, ultra-cost-effective products are emerging, and removing luxurious packaging for "naked" presentation represents industry sustainable development trends.
While launching Golden and Blue Yanghe, Jiangsu Yanghe Distillery Co.,Ltd. also renewed and upgraded the seventh-generation Haizhi Blue. As Yanghe's flagship product in the hundred-yuan price segment, Haizhi Blue sells 100 million bottles annually and is consumed by 300 million people yearly, establishing its "ballast" position in the product matrix.
The seventh-generation Haizhi Blue reportedly uses mianrou-type core brewing technology, with main base liquor selected from premium original liquor stored in ceramic jars for over three years, blended with aged flavoring liquor of over five years. Extended ceramic jar storage allows full oxidation and aging, creating more mellow and smooth liquor bodies.
Yanghe's product innovation extends beyond mass markets. In high-end markets, the company uses age certification systems to strengthen the scarce value of Yanghe handcrafted premium series, establishing industry quality benchmarks. In sub-premium markets, Dream Blue M6+ quality continues upgrading while partnering with CCTV for "Dream Resonates China·Music Gala" and supporting Chinese aerospace activities to enhance brand momentum. At the end of April, Dream Blue Business Edition positioned as "business preferred" launched comprehensively, precisely filling commercial consumption niche demands.
Financial reports show that in the first half of 2025, Yanghe's mid-to-high-end liquor operating revenue reached 12.672 billion yuan, accounting for 87.32% of total revenue; regular liquor revenue was 1.841 billion yuan, representing 12.68%.
From high-end leadership to mass consumption, Yanghe successfully deployed a three-dimensional product matrix through iteration and innovation.
**Regional Cultivation and Channel Restructuring** **Yanghe Builds Strength for Future Recovery**
Beyond product innovation and price segment expansion, in market positioning, Jiangsu Yanghe Distillery Co.,Ltd. no longer pursues nationwide market casting but shifts strategic focus toward deep cultivation of Jiangsu and surrounding base markets, deepening channel penetration in peripheral markets (Shandong, Anhui), creating model townships, and responding to industry challenges through channel restructuring.
This strategic shift already appears in financial statements. By market segment, first-half 2025 provincial market revenue reached 7.12 billion yuan while extra-provincial market revenue was 7.39 billion yuan, with provincial and extra-provincial sales revenues nearly balanced. In 2024, provincial and extra-provincial revenue proportions were 42.66% and 57.34% respectively.
Company channel positioning adjustments also manifest in dealer numbers. During the reporting period, Yanghe reduced extra-provincial dealers by 268 while continuously optimizing channel structure; conversely, provincial dealers increased by 11 to 3,010, demonstrating company support for core markets.
In international markets, Jiangsu Yanghe Distillery Co.,Ltd. actively expands overseas markets with products sold throughout Southeast Asia, Europe, and the Americas.
In March 2025, Yanghe participated in Singapore's "2025 Chinese Flavors and Customs Overseas Exhibition" with its Yanghe, Shuanggou, and Guijiu brands, showcasing new developments in China's baijiu industry upgrading to global markets. Its "mianrou-type" taste gained recognition from multinational purchasers, with Shuanggou and Guijiu series completing first Southeast Asian market concentrated exposure.
As a pioneer in Chinese baijiu internationalization, Yanghe has built a global network covering 80 countries across six continents. Data shows company overseas business revenue maintained over 40% growth for three consecutive years.
In online channels, first-half 2025 e-commerce expenses increased 39.8% year-over-year to 32.54 million yuan, with online direct sales revenue of 220 million yuan declining 6.9% year-over-year, significantly smaller than overall declines. Yanghe Daqu high-end bottled liquor's outstanding JD.com performance demonstrates online channels have become important growth supplements.
Jiangsu Yanghe Distillery Co.,Ltd. also innovatively conducts sports marketing, sponsoring Jiangsu Provincial Football Super League and accompanying the Chinese women's football team in pursuing Asian Games dreams. Through supporting hometown team "Suqian Yanghe Shares Team," the company establishes emotional resonance with fan communities, achieving brand rejuvenation and popularization.
Results show Yanghe's strategic transformation is beginning to show effects. In product structure optimization, the company launched seventh-generation Haizhi Blue and Yanghe Daqu high-end bottled liquors; in channel adjustments, Yanghe proactively controlled volume and stabilized prices while helping dealers reduce inventory; in regional market performance, Jiangsu provincial market revenue stabilized at 7.121 billion yuan with gross margins improving 1.14 percentage points to 76.18%, with provincial market stability providing foundations for returning to growth trajectories; in brand and consumer operations innovation, Yanghe established consumer trust through "mianrou aged liquor certification systems" with premium product opening rates increasing to 42%... As company strategies gradually implement and industry cycles bottom out and recover, Jiangsu Yanghe Distillery Co.,Ltd.'s long-term development potential remains broad.
Which Yanghe liquor do you prefer?
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