GTHT Securities recently released a research report stating that during a period of deep industry adjustment, ZJLD Group has initiated a two-way restructuring of both its channels and products through initiatives like the Ten Thousand Merchants Alliance and product innovation. This lays the foundation for an earnings recovery by 2026. The report expresses optimism regarding the company's long-term value in achieving a breakthrough through innovation and maintains an "Overweight" rating.
Despite facing performance pressure, the company's resilience is evident. In 2025, the baijiu industry overall encountered deep adjustments characterized by weak demand and channel destocking, with the sub-premium market under particular pressure. ZJLD Group achieved annual revenue of 36.50 billion yuan and an adjusted net profit of 523 million yuan, representing a year-on-year decline that was in line with market expectations. By brand, Lidhu performed relatively well, effectively hedging against the contraction in government and business consumption scenarios thanks to its early strategic focus on the mid-market and banquet occasions. Zhenjiu saw revenue decrease due to reduced government and business drinking, a contraction in gifting occasions, and destocking impacts on its Zhen 15 and Zhen 30 products. Xiangjiu and Kaikouxiao faced industry-wide challenges of pressure on both volume and price.
Despite the pressure on revenue and adjusted net profit, the company's fundamentals demonstrated structural resilience. The full-year gross profit margin remained at 58.5%, essentially flat compared to 58.6% in 2024, indicating that the core support from product strength and brand power remains solid.
The innovative alliance model is seen as a key strategy to activate growth. In response to industry challenges, ZJLD Group has employed a combination of "super single products + alliance model," which forms the core logic for the report's positive outlook. In 2025, the company innovatively launched the strategic new product Dazhen Zhenjiu and the Ten Thousand Merchants Alliance model. By offering multiple benefits such as channel profits and stock economic benefits rights, this approach addresses industry pain points like price inversion and high inventory, deeply aligning the interests of alliance merchants. To date, the number of merchants signed to the Ten Thousand Merchants Alliance has exceeded 4,300, with over 2,500 of them achieving sales progress ahead of expectations, driving nearly 1 billion yuan in collections for Dazhen Zhenjiu.
In March of this year, ZJLD Group further deepened its channel strategy by launching the fifth generation of Zhen 15 and the "Zhen 15 Alliance Plan," which was incorporated into the "Alliance Merchant Equity Payment Plan." This model, centered on "profit from liquor sales + monthly dividends + equity incentives," achieves precise adaptation and a comprehensive upgrade of the channel model. GTHT Securities believes that ZJLD's innovative model has the potential to strengthen customer loyalty, achieve mutual success in the channel, and break through the current market situation in a differentiated manner.
The capital market continues to show confidence. Recently, ZJLD Group Chairman Wu Xiangdong revealed at the company's full-year earnings investor briefing that sales have shown a steady recovery in the first quarter of 2026, with the operational trend continuing to improve. Industry observers noted that, while stock prices in the baijiu sector are generally under pressure due to macroeconomic uncertainty and the industry's deep adjustment, ZJLD Group's share price bucked the trend in 2025, rising over 30%. Since the beginning of 2026, the company's share price has continued its stable trajectory. As of March 31, ZJLD's share price stood at HK$9.39 per share, an increase of over 8% since the start of the year, fully demonstrating the capital market's recognition of the company's operational resilience, innovative strategy, and long-term investment value.
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