On August 18, 2025, Jiangsu Yanghe Distillery Co.,Ltd. released its interim report showing 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 of the year. Compared to the same period in 2024, revenue declined 35.32% year-on-year, while net profit attributable to the parent company dropped 45.34%, reflecting continued performance adjustment trends.
From a profitability perspective, the company's net profit margin in H1 2025 was 29.30%, showing a notable decline from 32.83% in Q1 2025. Although the gross margin of mid-to-high-end liquor products increased slightly by 0.87 percentage points year-on-year to 80.27% and accounted for over 80% of total revenue, the overall gross margin decreased by 0.13 percentage points to 75.02% compared to the same period last year due to declining margins in ordinary liquor products. The profitability growth of core products failed to fully offset structural pressures.
Inventory turnover efficiency has emerged as a prominent issue. The company's asset turnover ratio in H1 2025 was 0.5959, significantly lower than 1.0484 for the full year 2024, indicating reduced operational efficiency. The interim report disclosed that semi-finished liquor inventory (including base liquor) reached 726,900 tons. Against the backdrop of high industry-wide inventory levels, channel destocking pressure persists. Data from the China Alcoholic Drinks Association shows that the average inventory turnover days for the baijiu industry in H1 2025 reached 900 days, a 10% increase year-on-year, presenting greater inventory management challenges for Jiangsu Yanghe Distillery.
The channel structure shows signs of contraction. During the reporting period, the company had 8,609 dealers in total, a decrease of 257 from the same period last year. Out-of-province dealers decreased by 268 to 5,599, while in-province dealers increased by 11 to 3,010, which failed to offset the impact of channel contraction in out-of-province markets. Meanwhile, the combined sales proportion of the top five dealer customers rose to 10.7%, an increase of 2.55 percentage points from 2024 and the highest level since 2020. Rising customer concentration indicates increased channel risk aggregation.
Notably, while the company's contract liabilities grew nearly 50% year-on-year and advance payments surged 124%, indicating some recovery in channel confidence, this has not reversed the short-term performance decline trend. During the industry's deep adjustment period, Jiangsu Yanghe Distillery is implementing strategic adjustments through volume control and price stabilization, focusing on core markets. However, based on the interim report data, confirming the performance bottom still requires time for verification.
Behind the continued performance adjustment lies transformation pressure in brand building and channel management. Management acknowledged in investor communications that they will face problems squarely and address deficiencies in marketing strategy execution, with future efforts needed to continuously strengthen product structure optimization and channel efficiency improvement.
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