A 328 billion yuan discrepancy has emerged due to an accounting policy change, raising questions about whether this reflects a broader industry downturn. On April 30, Wuliangye Yibin Co.,Ltd. disclosed its 2025 annual report, which shocked the market. The report showed full-year revenue of only 40.529 billion yuan, a sharp decline of 54.55% year-over-year. Net profit attributable to shareholders plummeted by 72% to 8.954 billion yuan.
Notably, financial reports for the first three quarters had indicated revenue of 60.945 billion yuan and a net profit of 21.511 billion yuan. This implies that 20.4 billion yuan in revenue and 12.5 billion yuan in profit effectively vanished in the fourth quarter alone.
The core reason for this discrepancy is an adjustment to the revenue recognition principle. The industry previously commonly recognized revenue upon shipment of goods. This has now been changed to a model based on the transfer of control and confirmation of payment receipt. Wuliangye Yibin Co.,Ltd. applied this change retrospectively to the full-year data, resulting in a cumulative reduction of 32.8 billion yuan in revenue and 15 billion yuan in profit. These "disappeared" funds were reclassified to "other current liabilities," more accurately reflecting the genuine inventory pressure within sales channels.
A comparison of key data before and after the adjustment highlights the impact.
The disclosure of the annual report occurred under unusual circumstances, closely following the investigation of the company's chairman. On February 28, 2026, then-chairman Zeng Congqin was placed under retention due to serious disciplinary and legal violations, creating a stalemate in the annual report approval process. The absence of a legal representative affected signature procedures, and internal approvals were delayed. An emergency announcement on April 28 stated the report would be delayed, and it was ultimately filed on the deadline of April 30 by the vice chairman acting with authorized powers. This marks the second chairman of Wuliangye Yibin Co.,Ltd. to be investigated within three years, following former chairman Li Shuguang, who was also implicated in a case after stepping down in 2025, highlighting governance risks during the industry's period of deep adjustment.
The company's first-quarter 2026 report showed signs of a rebound. Revenue was reported at 22.838 billion yuan, a 34% increase year-over-year, while net profit surged 83% to 8.063 billion yuan. However, it is crucial to note that these growth figures are measured against the already adjusted and lowered base from 2025. When compared to the original, pre-adjustment first-quarter 2025 revenue of 37.135 billion yuan, the 2026 first-quarter revenue actually represents a 38% decline.
Despite the severe drop in annual performance, Wuliangye Yibin Co.,Ltd. announced significant shareholder returns, supported by its substantial cash reserves. The company proposed a dividend distribution of 25.78 yuan per 10 shares, which accounts for 46% of the adjusted net profit. It also unveiled a share repurchase plan valued between 8 and 10 billion yuan. As of the first quarter of 2026, the company's monetary funds stood at 80.5 billion yuan, a 12% increase year-over-year, indicating a strong cash safety net. The massive buyback plan is intended to stabilize the stock price, as the company's current market capitalization has evaporated over 600 billion yuan since its peak in 2021.
The situation offers key insights for the broader baijiu industry. The sector is in a phase of profound adjustment, where the traditional model of pushing inventory into sales channels is becoming unsustainable. The change in accounting standards has exposed the true level of inventory across the industry. The combination of governance risks and significant earnings volatility is amplifying market concerns.
Wuliangye's "water-squeezing" annual report serves as both a microcosm of the industry's challenges and a potential starting point for value reassessment. The critical questions remain: Can the 80 billion yuan cash reserve effectively support necessary channel reforms? Can new leadership restore market confidence? The answers will ultimately determine the company's genuine path to recovery.
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