The performance of Anhui Golden Seed Winery Co.,Ltd., one of the "Four Golden Flowers of Anhui Liquor" alongside Gujing Gongjiu, Kouzijiao, and Yingjia Gongjiu, remains challenging amid a deep industry adjustment period characterized by overall softness in terminal consumption and intensified market competition.
The company has forecast a net loss attributable to shareholders of up to 72 million yuan for the first half of 2026, with the loss in the second quarter widening compared to the first. Over a longer timeframe, Anhui Golden Seed Winery has incurred losses for five consecutive years, accumulating a total deficit exceeding 800 million yuan. Despite comprehensive reforms initiated following Huarun's entry as a major shareholder, operating data has yet to show substantial improvement.
Observers note that with its premium products still in a cultivation phase, low-end products dominating gross profit contribution, high fixed expenses, and negative operating cash flow persisting for years, it remains uncertain when Anhui Golden Seed Winery will break free from the cycle of "high investment and slow returns."
Interim Report Forecasts Loss, Q2 Loss Widens Sequentially
Anhui Golden Seed Winery Co.,Ltd. is primarily engaged in the production and sale of baijiu. Its product portfolio includes the Golden Seed series, Seed series, Zuisanqiu series, and Yingzhou series of strong-aroma baijiu, as well as its Golden Seed Fuhexiang aroma-type baijiu. The company has established a product architecture centered on Golden Seed Fuhexiang, flanked by mid-to-low-end products like the premium cultural baijiu Zuisanqiu, Top Seed, and Soft Seed. As one of the "Four Golden Flowers," the company is navigating a difficult industry adjustment cycle.
The latest performance forecast indicates that Anhui Golden Seed Winery expects a net loss attributable to shareholders in the range of -72 million to -60 million yuan for the first half of 2026, with an adjusted net loss of -76 million to -64 million yuan. In the first quarter of this year, the company reported a net loss attributable to shareholders of 15.24 million yuan and an adjusted net loss of 16.17 million yuan. Based on this, the net loss for the second quarter is estimated to be between 44.76 million and 56.76 million yuan, indicating a sequential widening of the loss.
The company attributed the loss to the ongoing deep adjustment phase in the baijiu industry, persistent stock-based competition, overall weakness in terminal consumption, intensified competition between traditional and emerging channels, and sustained pressure on product sell-through. The company's revenue fell short of expectations as it continued efforts to reduce channel inventory and standardize market pricing. Concurrently, it focused on building its Fuyang home market and developing model markets, investing in projects related to market infrastructure, the Fuhexiang 122N project, rural revitalization initiatives, and consumer cultivation. While brand reputation and market order in the Fuyang home market showed gradual improvement in H1 2026, with some optimization in expense levels and structure, the failure to meet revenue targets is expected to result in an operating loss.
It is noted that the company's weak performance trend has been evident for some time. From 2021 to 2025, Anhui Golden Seed Winery reported consecutive annual net losses attributable to shareholders of 166 million yuan, 187 million yuan, 22.07 million yuan, 258 million yuan, and 199 million yuan respectively, totaling over 800 million yuan in losses over five years.
Notably, in 2022, Huarun became a major shareholder and initiated a series of reforms in management, channels, and branding. Despite the changes brought by Huarun, the company has been unable to stem the losses.
High Proportion of Low-End Products, Soaring Costs "Erode Profits"
In its 2025 annual report inquiry response to the Shanghai Stock Exchange, which focused on the continuous losses and operating fundamentals, the company acknowledged that the root cause of losses is primarily linked to changes in baijiu sales revenue.
Anhui province is home to four listed baijiu companies: Gujing Gongjiu, Kouzijiao, Yingjia Gongjiu, and Anhui Golden Seed Winery. Local leaders like Gujing Gongjiu have leveraged geographical consumption advantages to deeply cultivate the sub-premium segment, leading to fierce competition for existing market share. From 2023 to 2025, the baijiu industry entered a deep adjustment period marked by加剧的消费分级 (intensified consumption stratification), weakening terminal sell-through, and further白热化 (intensified) industry competition.
Data shows the baijiu industry was under widespread pressure in 2025, with industry operating revenue declining 18.26% and net profit falling 24.14%. Comparable companies saw revenue drop 22.9% and net profit plunge 39.33%. While all four listed baijiu companies in Anhui faced an inflection point in 2025, Anhui Golden Seed Winery was the only one to report a loss. This indicates that while the industry cycle and heightened competition are external factors, internal factors are more critical.
It is understood that since 2021, Anhui Golden Seed Winery has vigorously promoted its sub-premium product "Golden Seed Fuhexiang" and iteratively upgraded its strong-aroma products like Soft Seed. However, the Fuhexiang series remains in a market cultivation phase and has not yet achieved economies of scale. In 2025, revenue from mid-to-high-end Fuhexiang products (Fu 9, Fu 16, Fu 20) was 194.72 million yuan, accounting for 33.28% of total revenue, while low-end product revenue was 390.34 million yuan, representing 66.72%.
The company stated, "Unit costs have risen year-on-year due to high fixed cost leverage and reduced sales volume, though they remain lower than comparable companies. Compared to peers, the proportion of mid-to-high-end products is significantly lower, and the proportion of low-end products is significantly higher. As mid-to-high-end products still require cultivation time, gross profit contribution is dominated by low-end products, resulting in significantly lower gross profit compared to peers. The inability to effectively improve the product structure in the short term, coupled with insufficient gross profit contribution from mid-to-high-end products, is one of the main reasons for the company's continuous losses."
Beyond product structure issues, the rigid pressure from the expense side is equally不容忽视 (cannot be ignored). In 2025, the combined selling and administrative expenses of Anhui Golden Seed Winery accounted for 45.29% of operating revenue, compared to an industry average of 17.68% and a peer average of 24.67%. The decline in sales revenue meant that投入的销售费用、管理费用不能得到有效回报 (the invested selling and administrative expenses could not be effectively recouped), and gross profit was insufficient to cover the expense投入 (expense投入 (input)), leading to substantial losses.
The company explained that in recent years, out-of-province branded baijiu companies have entered the Anhui market, continuously squeezing its original market share, necessitating more resource投入 to maintain its existing position. Additionally, the cultivation of the sub-premium Fuhexiang series and the iterative upgrade of older products require significant market promotion expenses, collectively resulting in high selling expenses.
Persistent Cash Flow Drain, Reliance on External Financing
The sluggish operating performance has directly impacted cash flow. In 2025, net cash flow from operating activities was -219 million yuan, marking nearly a decade of negative figures except for 2023.
Against this backdrop, Anhui Golden Seed Winery relies on external financing. At the end of 2025, the balance of short-term borrowings was 293 million yuan, a year-on-year increase of 48.02%, while the balance of long-term borrowings was 104 million yuan, representing新增借款 (new borrowings).
Regarding the necessity and rationality of the新增借款, the company stated that the decline in sales collections in 2025, the execution of its strategy to储备优质基酒 (stockpile high-quality base liquor), and rigid expenditures for daily operations, production, employee salaries, and taxes resulted in negative operating cash flow, creating a funding gap. Borrowing was necessary to ensure normal operations and long-term development,弥补经营缺口 (covering the operating shortfall).
In terms of monetary funds, as of the end of 2025, the balance was 264.19 million yuan, down 27.96% year-on-year. This included 26.61 million yuan in restricted funds such as operating deposits and 146.22 million yuan in special raised funds.
The company noted that after deducting these two types of restricted funds, freely available working capital stood at 91.36 million yuan. The company implements a three-month rolling fund测算管理制度 (forecast management system). With an average monthly operating expenditure of 82 million yuan in 2025, the 91.36 million yuan is primarily intended for subsequent operational expenses. Anhui Golden Seed Winery stated that for 2026, it will control the production-to-sales ratio, reduce base liquor production capacity, maintain cost optimization, and leverage price advantages in packaging materials to reduce raw material procurement支出 (expenditures).
Given the operating losses and persistently negative operating cash flow, the exchange raised the question of whether there is significant uncertainty regarding the company's ability to continue as a going concern.
Anhui Golden Seed Winery believes there is no significant uncertainty about its持续经营能力 (going concern ability), arguing from perspectives such as持续改善 (continuous improvement) in operating performance, narrowing losses, a shrinking operating cash flow gap, and a稳健 (sound) asset-liability structure. However, judging from market performance and financial data, the company's current operational resilience still faces严峻考验 (severe tests).
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