On August 19, Anhui Kouzi Distillery Co.,Ltd., China's leading mixed-aroma liquor producer, released its 2025 interim report, showing operating revenue of 2.531 billion yuan in the first half, down 20.07% year-over-year; net profit attributable to shareholders of listed companies reached 711 million yuan, down 24.63% year-over-year; and net profit attributable to shareholders excluding non-recurring gains and losses was 698 million yuan, down 24.90% year-over-year.
Anhui Kouzi Distillery Co.,Ltd. stated that since 2025, market differentiation and channel changes in the liquor industry have intensified, with production continuing to shrink and sales growth slowing. The company said it will fully participate in market competition, comprehensively support distributors, advance "intelligent transformation and digital reform" projects, and orderly promote Phase I and Phase II brewing, koji-making, packaging, and liquor storage projects at the Kouzi Industrial Park.
**High-End Liquor Revenue Decline Drags Down Performance, Direct Sales Show Strong Growth Despite Small Proportion**
Anhui Kouzi Distillery Co.,Ltd. is one of China's representative mixed-aroma liquor brands, with product series including Kouzi Liquor, Lao Kouzi, Kouzi Fang, and Kouzi Wine. The company's Kouzi liquor series products have unique aromas and represent China's mixed-aroma liquor category. Located in northern Anhui Province, adjacent to major liquor-consuming provinces like Jiangsu, Shandong, and Henan, the company has strong market influence in surrounding provinces beyond the Anhui market.
From a revenue structure perspective, the company primarily relies on high-grade liquor product sales. In the first half of 2025, high-grade liquor revenue reached 2.385 billion yuan, accounting for approximately 96% of current liquor revenue, with this segment declining 19.80% year-over-year, impacting the company's overall revenue and net profit performance in the first half. While high-end liquor growth remained weak, mid-range and low-end liquors also experienced certain declines, leading to significant overall revenue decline.
From a channel perspective, the company's revenue decline was mainly due to substantial drops in wholesale agency channels. The company's main channels are divided into direct sales (including group purchases) and wholesale agencies. In the first half, wholesale agency revenue was 2.352 billion yuan, accounting for approximately 95% of channel revenue, down 21.26% year-over-year, exceeding the company's overall revenue decline rate. The company's direct sales (including group purchases) showed strong growth, achieving revenue of 133 million yuan in the first half, up 44.57% year-over-year.
Sales expense investment also declined year-over-year. The company's sales expenses in the first half were 357 million yuan, down 25.11%, which the company attributed to reduced promotional investments due to sales decline and decreased television advertising spending.
Regarding regional sales, the company experienced declines both within and outside the province. Provincial revenue was 2.1 billion yuan, down 19.31% year-over-year, while out-of-province revenue was 384 million yuan, down 19.24%.
**Full Market Competition Participation, Anhui Kouzi Distillery to Accelerate Shanghai Marketing Center Construction**
Anhui Kouzi Distillery Co.,Ltd.'s performance decline reflects the increasingly fierce competition in the liquor market.
The company explained that the liquor market is a fully competitive market, with numerous liquor producers in the Huai River basin area and the company's main market of Anhui Province, including well-known enterprises. In recent years, liquor manufacturers from Guizhou, Sichuan, Shanxi, and other regions have continued to develop, making market competition increasingly intense for the company.
Facing operational challenges, the company stated that with factors like sluggish consumption affecting the industry, overall industry development faces pressure, with declining demand, poor sales momentum, and high inventory levels becoming industry norms. Confronting the severe situation of industry development, Anhui Kouzi Distillery Co.,Ltd. will seek progress in market construction, brand marketing, and comprehensive strength.
The company stated it will fully participate in market competition. Within the province, relying on the Anhui operations center, it will continuously penetrate county-level and township markets; outside the province, it will accelerate construction in key markets like the Yangtze River Delta and Pearl River Delta. The company will accelerate construction progress of the Shanghai operations center to create a model and benchmark for out-of-province market expansion.
The company will also comprehensively support distributors. Through key market visits, it will precisely conduct distributor support and management, continuously optimize distributor structure, and significantly improve distributors' market construction capabilities and comprehensive levels.
The company noted that its main products face increasingly fierce competition. If the company's brand influence declines, marketing efforts prove ineffective, or products cannot meet market demand, or if the company strengthens brand promotion and market publicity to respond to competition and increases promotional efforts, leading to substantial increases in marketing expenses, this will impact the company's profitability.
Anhui Kouzi Distillery Co.,Ltd.'s profitability has long been questioned by the market. In 2024, the company was removed from mainstream indices including the SSE 180 Index and MSCI China Index. Recently, one of the company's founders, Liu Ansheng, plans to reduce holdings again, expecting to sell no more than 10 million shares, valued at over 300 million yuan based on the closing price of the trading day before the reduction announcement.
At the beginning of 2024, Anhui Kouzi Distillery Co.,Ltd. set a three-year development goal, proposing to achieve the "10 billion yuan Kouzi" target. However, currently, stabilizing high-end liquor scale appears more important.
Comments