Anhui Kouzi Distillery Co.,Ltd. has reported its weakest financial performance since going public. The company recently disclosed its 2025 results, showing significant declines in both revenue and net profit attributable to shareholders, representing the largest annual drop since its 2015 listing. Revenue fell to its lowest level since 2018, while net profit returned to levels seen nine years ago. Actual revenue reached 3.991 billion yuan, achieving only 60% of the previously budgeted 6.616 billion yuan.
Premium baijiu sales emerged as the primary drag on performance. In 2025, revenue from premium baijiu, which constitutes over 90% of total revenue, decreased by 35.08% to 3.688 billion yuan.
The performance slowdown has caused the former second-ranked distillery in Anhui to consistently fall to third place in recent years. Since Yingjia Distillery surpassed Kouzi in 2022 with a 370 million yuan revenue advantage, Kouzi has lost its second position in the Anhui liquor market. By 2025, Yingjia's revenue was 1.5 times that of Kouzi, while its net profit was nearly three times higher.
In 2022, Kouzi established its strategic goal to "accelerate achieving the 10-billion-yuan Kouzi target and enter the top tier of national baijiu producers," partnering with international consulting firm McKinsey to develop objectives including "striving to become a leader in Anhui liquor within five years." Subsequently, Kouzi increased its investment in consulting services, accumulating over 100 million yuan in consulting fees over four years.
Early in 2024, Kouzi set a three-year development target, reiterating the goal of quickly reaching the "10-billion-yuan Kouzi" milestone. However, with the target deadline approaching, the company's revenue continues to move further away from the objective.
Premium baijiu revenue plummeted by 35%, contributing to the largest performance decline since listing. On April 22, Kouzi released its 2025 annual report, showing full-year revenue of 3.991 billion yuan, down 33.65% year-on-year, and net profit attributable to shareholders of 673 million yuan, down 59.32% year-on-year.
This represents the largest annual decline since Kouzi's 2015 listing. Analysis reveals that 2025 revenue fell to the lowest level since 2018, while net profit returned to the lowest point since 2016. Compared to the previously disclosed 2025 financial budget projecting 6.616 billion yuan in revenue with 10% growth, actual revenue achieved only 60% of the target.
Kouzi attributed the revenue decline primarily to weak consumer demand in the baijiu market and reduced sales of premium products during the reporting period. Premium products, including the Five-Year Cellar, Ten-Year Cellar, and Jian series from Jian5 to Jian30, cover price ranges from 300 yuan to several thousand yuan. During the 2024 earnings briefing, management noted that mid-to-low-priced products in the Jian series showed good sales momentum, while high-end Jian series products underperformed expectations. Prices for Jian5, Jian6, and Jian8 remained stable within company guidelines, while Jian10 and Jian20 traded slightly below guidance.
Mid-range baijiu revenue, represented by products like Lao Kouzi and Kouzi Fang, decreased by 21.1% to 54 million yuan in 2025. Low-end baijiu revenue, represented by the Kouzi series, increased by 27.43% to 161 million yuan. However, with low-end products contributing only 4% of total revenue, their growth couldn't offset the significant decline in premium product sales.
Bai jiu industry analyst Cai Xuefei stated that Kouzi's sharp performance decline in 2025 resulted from the combined effect of industry-wide adjustment pressures and deep-seated strategic deficiencies. At the industry level, consumer segmentation and channel transformation intensified market competition, while at the corporate level, Kouzi faced multiple challenges including premium product portfolio expansion, channel optimization, and brand upgrades, leading to substantial upfront investments and reduced cost efficiency.
The downward trend continued into the first quarter of 2026, with revenue declining 24.02% to 1.375 billion yuan and net profit falling 46.16% to 329 million yuan.
Beyond the decline in premium baijiu revenue, management expenses decreasing at a slower rate than revenue contributed significantly to the profit contraction. Despite a 22.41% year-on-year reduction in consulting fees under management expenses during 2025, they still reached 23.3361 million yuan.
Substantial consulting investments began in 2022 when Kouzi established its strategic goals and partnered with McKinsey. Consulting fees increased by 327.85% to 12.8887 million yuan that year, maintaining growth trends of 38.2691 million yuan in 2023 and 30.0746 million yuan in 2024. Over four years, cumulative consulting fees exceeded 100 million yuan.
Meanwhile, office, travel, and entertainment expenses continued growing despite the performance decline, increasing 74.26% to 47.5331 million yuan in 2025. This follows a 13.05% increase to 27.2769 million yuan in 2024 and a 144.32% surge to 24.1276 million yuan in 2023, when revenue grew 16.1% to 5.962 billion yuan. The company previously attributed the 2023 expense growth to increased business travel and entertainment activities.
Controlling shareholder Liu Ansheng has cashed out over 300 million yuan in recent transactions. Since September 2018, Liu has reduced his stake multiple times, totaling 857 million yuan in share sales. The most recent transaction occurred in August 2025, when Liu sold 10 million shares via block trade for 329 million yuan due to personal funding needs.
Following Liu's reduction, Kouzi's share price trended downward, falling from 35 yuan per share in August last year to 24 yuan per share, a cumulative decline exceeding 28%.
Kouzi faces challenges in both its home market and national expansion. Revenue from Anhui province accounted for 81.33% of total revenue in 2025, decreasing 34.51% to 3.246 billion yuan, indicating market share erosion in its core market. Expansion outside Anhui also encountered obstacles, with revenue declining 28.58% to 657 million yuan despite adding 53 new distributors.
Listed in June 2015 as the first "Jianxiang-style baijiu" stock on the Shanghai Exchange, Kouzi ranks as the 17th national and fourth Anhui-based baijiu listed company. Along with Gujing Distillery, Yingjia Distillery, and Jinzhi Distillery, it comprises the "Four Golden Flowers of Anhui Liquor." While Gujing consistently leads the Anhui market, Kouzi and Yingjia have historically competed for second position. Kouzi maintained the second position from 2017 to 2021 through its distinctive Jianxiang-style products and distributor-led marketing model.
This competitive landscape shifted in 2022 when Yingjia surpassed Kouzi by 370 million yuan in revenue. Kouzi has remained behind Yingjia since, solidifying its third-place position. The gap widened further in 2025, with Yingjia's revenue reaching 1.5 times and net profit nearly triple that of Kouzi, despite Yingjia also experiencing declines of 18.04% in revenue to 6.019 billion yuan and 23.31% in net profit to 1.986 billion yuan.
With the 2027 target deadline approaching, Kouzi's revenue continues to diverge from its 10-billion-yuan objective. Inquiries regarding performance and strategic planning sent to Kouzi remained unanswered at time of publication.
Comments