On January 11, Anhui Golden Seed Winery Co.,Ltd. released its 2025 annual performance forecast, indicating that the company's full-year net profit attributable to shareholders of the listed company is still expected to be negative. Although the scale of the loss narrowed year-on-year, this marks the fifth consecutive year the company has been in the red.
This pre-loss announcement not only reveals the persistent difficulties in the company's operations but also prompts the market to re-examine the effectiveness of reforms under the China Resources umbrella over the past three years. Despite a series of actions, including divesting non-core assets and promoting product upgrades, this established Anhui liquor company has yet to emerge from its downturn.
The asset divestment has sparked controversy, with the stopgap self-rescue measure failing to mask the weakness of the core business. Prior to the release of this pre-loss announcement, an asset disposal by Golden Seed Winery had already drawn significant market attention. On November 7, 2025, the company announced the transfer of a 92% equity stake in its controlling subsidiary, Golden Sun Pharmaceutical, for 126 million yuan. The buyer was Shenzhen Juncheng Pharmaceutical, an entity established just 25 days prior with a registered capital of only 1 million yuan.
Golden Sun Pharmaceutical was once a key profit pillar for Golden Seed Winery, contributing up to 42% of its revenue in 2020. However, since 2024, this business has taken a sharp downturn, with revenue plummeting 62% to 161 million yuan. In the first three quarters of 2025, it swung from profit to a loss of 2.5034 million yuan, transforming from a "cash cow" into a "drag on performance." For Golden Seed Winery, this divestment appears to be a strategic retrenchment to focus on its core business, but in reality, it seems more like a forced move to alleviate financial pressure. By the end of the third quarter of 2025, the company had only 367 million yuan in cash on its books, while interest-bearing debt totaled 375 million yuan. Its operating cash flow had been negative for many consecutive years, making the 126 million yuan transfer payment a much-needed "lifeline."
The market's primary doubts center on why the divestment was only initiated in 2024, when the pharmaceutical business's revenue began to decline sharply, and why a newly established transferee was ultimately chosen, raising suspicions of a low-price asset transfer. These questions have not yet been clearly addressed by the company, and whether this "capital injection" can genuinely improve operations remains to be seen over time.
The premiumization strategy has encountered setbacks. In February 2022, China Resources Strategic Investment took control of Golden Seed Winery as a strategic investor, and the market had high hopes that this "central-local cooperation" would inject new vitality into the enterprise. The China Resources team promptly dispatched senior executives like He Xiuxia and Jin Hao to take charge of operations, launching a product strategy centered on "Fùhéxiāng (Complex Aroma)" with the Seed brand and Zuisanqiu as supporting wings. The aim was to break away from reliance on low-end products through a premium transformation and leverage China Resources' beer distribution network to expand the market.
However, after three years, the results of the reforms have fallen far short of market expectations. In 2024, the company's baijiu (white liquor) business revenue fell sharply by 24.33% to 744 million yuan, reverting to 2021 levels. In the first three quarters of 2025, baijiu revenue further declined to 512 million yuan. The performance of the core premium product series, Fùhéxiāng, has been particularly dismal.
More critically, profitability has continued to deteriorate. In 2024, the gross profit margin for the company's baijiu business dropped by 10.44 percentage points to 38.4%, with margins for premium and mid-range baijiu falling sharply by 18.58 and 20.91 percentage points, respectively. Although the gross margin recovered to 43.26% in the first three quarters of 2025, it remained significantly below the industry average. Meanwhile, the sales expense ratio climbed against the trend to 31.84%, and coupled with a management expense ratio of 12.47%, the total expense ratio reached 44.31%, already exceeding the comprehensive gross margin of 34.94%. This has created a vicious cycle of "increasing losses leading to more investment, and more investment leading to greater losses."
Between July and September 2025, General Manager He Xiuxia and CFO Jin Hao, both dispatched by the China Resources team, resigned successively. This marked a phase of failure for the initial round of reforms. The change in the senior management team has raised market concerns about the continuity of the company's strategy and also reflects the experience gap of the China Resources system in navigating the transformation within the baijiu industry.
(Note: This article was created with the assistance of AI tools and does not constitute investment advice.)
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