Wuliangye Yibin Co., Ltd. opened trading 6.49% lower, with its share price at 90.78 yuan. The sharp decline follows the company's significant revision of its financial results for 2025. For the first quarter of 2025, the company revised its revenue figure down from 369.4 billion yuan to 170.86 billion yuan, a reduction of 53.7%. Net profit attributable to shareholders was adjusted down from 148.6 billion yuan to 44.16 billion yuan, a decrease of over 70%. For the first three quarters of 2025, cumulative revenue was revised down by 303.07 billion yuan, and net profit attributable to shareholders was revised down by 150.36 billion yuan. For the full year 2025, the corrected revenue was 405.29 billion yuan, representing a year-on-year decline of 54.55%, while the corrected net profit was 89.54 billion yuan, a year-on-year decrease of 71.89%.
Citigroup analysts stated that Wuliangye unexpectedly announced a major "restatement" of its historical income statement for the first nine months of 2025 to "correct accounting errors," significantly adjusting the recognition of some sales revenue. This action, which cut the previously reported net profit for the first nine months of 2025 by 150 billion yuan, is described as unprecedented in the Chinese baijiu industry. Although the company did not provide a detailed explanation, the analysis suggests this essentially constitutes a major channel inventory buyback program, primarily funded through payables to distributors rather than cash payments. Given that a significant portion of this channel inventory is likely still physically held in distributors' warehouses, uncertainty is expected to persist into 2026, despite a lower comparative base for accounting profits due to the restatement. This outlook remains even with the company's newly announced share buyback plan of 8 to 10 billion yuan. Following a reduction of their net profit forecasts for 2026 and 2027 by 51% and 47% respectively, Citigroup has downgraded its rating on Wuliangye from Buy to Sell.
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