On October 31, 2025, Jiugui Liquor Co.,Ltd. (000799.SZ) released its third-quarter report, drawing widespread attention to the Hunan-based liquor giant. The report showed that the company's revenue for the first three quarters plummeted 36.21% year-on-year to 760 million yuan, while net profit swung to a loss of 9.8055 million yuan, a sharp decline from the 56.4876 million yuan profit recorded in the same period last year.
Although Q3 revenue edged up 0.78% year-on-year to 198 million yuan and net loss narrowed to 18.7605 million yuan from 64.532 million yuan a year earlier, these marginal improvements failed to mask deeper operational challenges.
Once hailed as a "cultural liquor benchmark," Jiugui Liquor now grapples with declining revenue and negative profits, reflecting the survival anxiety of regional premium brands during the industry's structural adjustment. The financial data reveals multiple contradictions in strategy, management, product mix, and channel pressure.
**Financial Downturn: Revenue and Profit Double Whammy** Jiugui Liquor's decline has been brewing for years. While it achieved an 86.97% revenue growth in 2021, revenue plunged 49.7% to 1.423 billion yuan in 2024, with net profit collapsing over 97% to just 10-15 million yuan. The Q3 2025 results continued this downward trend, with key financial metrics lagging behind peers.
Persistent revenue contraction highlights weak demand and poor channel digestion. The 760 million yuan revenue for the first three quarters is nearly halved from 2021 levels, while the slight Q3 growth was largely due to a low base effect rather than genuine demand recovery. The company admitted that liquor demand remains sluggish, with cautious client expectations and misaligned distributor payments and actual sales.
Profit performance is even more alarming. The near-10 million yuan net loss for the first three quarters marks a historic low, and despite Q3's narrower loss, the overall loss-making trend persists. The core issue lies in the severe imbalance between marketing expenses and revenue growth—high promotional costs failed to boost sales, further eroding margins.
Among 20 listed liquor firms, Jiugui Liquor ranks third in net loss and second-to-last in revenue below 1 billion yuan. Accounts receivable surged 3,540-fold to 47.577 million yuan by Q3 2025 from 13,400 yuan at end-2024, reflecting severe payment pressure. Contract liabilities (advances from distributors) dropped 52% year-on-year to 117 million yuan, ranking sixth-lowest in the industry. Operating cash flow worsened to -326 million yuan in Q3, signaling liquidity strain.
**Strategic Flip-Flops: From Aggressive Expansion to Contraction** Jiugui Liquor's woes stem partly from frequent strategy shifts. Since COFCO took over in 2016, the company has oscillated between national expansion, a "10-billion-yuan target," and a 2025 retrenchment strategy focusing on its home province and select regional markets.
During the 2021 industry boom, previous management aggressively pushed national expansion and premium product distribution, leading to severe channel inventory buildup. As premium demand cooled, batch prices for its flagship "Neican" series inverted by 300 yuan/bottle, hurting margins and distributor confidence. By H1 2024, Neican sales crashed 60.85%, becoming a major drag.
New CEO Cheng Jun, appointed in late 2024, initiated a strategic pivot to consolidate resources in Hunan and 15 regional markets. However, the transition has been painful: distributor count plummeted 39% to 805 by mid-2025, with 319 exits in Central China alone.
Product strategy adjustments also lagged. The "2+2+2" portfolio system (two strategic products, two key products, and two entry-level offerings) was only formalized in 2025, leaving core products like Neican struggling to regain market share amid fierce competition.
**Management Turmoil: Governance Risks** Frequent leadership changes—three chairmen and four CEOs since 2016—have undermined strategic continuity. Cheng Jun's return as CEO in 2024 signaled COFCO's attempt to "correct course," but challenges remain: clearing legacy inventory, rebuilding channel trust, and balancing short-term performance with long-term branding.
**Market Pressures: Dual Squeeze from National and Local Rivals** Even after refocusing on Hunan, Jiugui Liquor faces intense competition. National giants like Moutai and Wuliangye are penetrating lower-tier markets, while local brands like Xiangjiao and Wuling Liquor leverage regional familiarity to grab share. Meanwhile, shifting consumer preferences—toward health-conscious and younger demographics—pose long-term challenges for its traditional aromatic liquors.
Channel recovery remains arduous. Despite policy tweaks to support distributors, rebuilding trust takes time. High inventory and price inversion issues require sustained investment and market cultivation.
As a former "Hunan liquor leader" and "cultural marketing pioneer," Jiugui Liquor retains unique aromatic advantages and brand heritage. Investors should brace for near-term risks but monitor whether the company can resolve its contradictions and leverage its strengths for a turnaround.
Jiugui Liquor's struggles mirror those of regional premium brands in a consolidating industry. Only those with strategic focus, core competitiveness, and adaptability to consumer trends will endure. For Jiugui Liquor, the road ahead is tough—but essential to reclaim past glory.
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