On March 20, Shede Spirits Co.,Ltd. disclosed its 2025 annual report, revealing revenue of 4.419 billion yuan and a net profit attributable to shareholders of 223 million yuan. The decline in performance narrowed significantly compared to the previous year. Concurrently, the company announced a high dividend distribution plan, proposing a cash dividend of 3.10 yuan per share (before tax), totaling 102 million yuan (before tax), which represents 45.67% of the net profit attributable to shareholders.
In recent years, the baijiu industry has entered a period of deep adjustment, forcing distilleries to slow down and reduce inventory, impacting all listed baijiu companies to varying degrees. Following a round of proactive adjustments, Shede Spirits' strategic focus on aged spirits, mass-market products, and diversified channels is now driving a recovery in its performance.
Last year, the company stabilized its core products through brand strength. The price of the Shede Collection 10-Year remained stable, sales of Shede Celebration doubled, and both sell-through and open-bottle rates for Shede Dao increased. Furthermore, revenue from the mass-market price segment grew against the trend by 5.75%, becoming a significant growth driver.
Inventory reduction has achieved phased success, while mass-market products have experienced high growth. In 2025, the baijiu industry faced challenges from weak consumption and overall market contraction, making inventory reduction a common issue across the sector. Shede Spirits adhered to a strategy of stabilizing prices, controlling inventory, and strengthening sell-through, actively promoting channel inventory digestion through a series of measures.
From an operational perspective, the company capitalized on opportunities in the mass-market segment by optimizing its product structure and achieving breakthroughs with key products. Last year, the strategic product Tuopai Superior T68 saw sustained high growth in sell-through, open-bottle rates, and shelf placement data. The mid-range product Shede Dao achieved double growth in sell-through and open-bottle rates, capturing banquet scenarios by expanding into township markets. Overall revenue from standard spirits reached 733 million yuan, a year-on-year increase of 5.75%, establishing it as a crucial growth engine.
In terms of channels, the company continuously deepened its market penetration and focused on cultivating consumer relationships. Beyond traditional channels, Shede Spirits developed diversified channels such as e-commerce, live streaming, and group purchasing/direct sales. Last year, e-commerce channel sales revenue reached 604 million yuan, a substantial increase of 35.46% year-on-year, serving as an important supplement to traditional channels. According to data from a Sinolink Securities research report, e-commerce channel growth remained above 20% in the fourth quarter of 2025, with emerging e-commerce and live streaming bases expected to maintain solid growth prospects.
While phasing out underperforming distributors, Shede Spirits provided strong support to its channels by adjusting expense policies and payment collection schedules, accelerating distributor capital turnover, ensuring distributor profits, and thereby boosting channel confidence. Currently, the company's inventory reduction efforts have shown clear results. Public information indicates that channel inventory was around three months before the Spring Festival, reaching a relatively healthy state, with stable wholesale prices for main products.
Financially, the decline in revenue and net profit narrowed significantly year-on-year. Cash received from sales of goods was 4.82 billion yuan, with a cash collection ratio remaining above 100%, indicating healthy collection conditions. Net cash flow from operating activities improved compared to the previous year, and management expenses decreased by 12.39%, demonstrating further optimization of cost control.
What underpins Shede Spirits' resilience? The baijiu industry has shifted from a phase of incremental expansion to one of stock-based competition, where brand barriers represent the core competitiveness of distilleries.
As one of Sichuan's "Six Golden Flowers," Shede Spirits has seen both its "Shede" and "Tuopai" brands included in the "China 500 Most Valuable Brands" list for 22 consecutive years, with a combined brand value reaching 190.698 billion yuan in 2025.
The company's development has consistently involved product innovation and brand enhancement. Initially entering the market rapidly through Tuopai, it launched the Shede brand during the 2001 industry adjustment to target the mid-to-high-end market. In 2010, it adopted a dual-brand strategy of "Shede + Tuopai" to align with consumption upgrades. In 2019, amid intensifying homogeneous competition, it introduced an "Aged Spirits" strategy, emphasizing differentiation and beginning to develop its presence in the high-end bottled spirits and thousand-yuan price segments. This represented a critical brand upgrade for the company.
Recently, aged spirits have been transitioning from a niche collectible to a mass-consumption category, with the market gradually expanding. According to estimates from the China Alcoholic Drinks Association, the size of China's aged spirits market surpassed 150 billion yuan in 2024, establishing it as a significant segment within the alcoholic beverages market.
For baijiu companies, the primary barrier to competing in the aged spirits market is inventory. Since 1976, Shede Spirits has reserved a portion of the highest-quality base liquor from each batch for strategic storage, building a substantial aged spirits inventory that constitutes its greatest advantage.
As of 2025, the company's semi-finished spirits (including base liquor) reserves reached 182,100 kiloliters, with high-quality aged spirits reserves estimated at 120,000-130,000 tons, accounting for over 80% of the total. The age span of these reserves covers several decades, providing a rare resource for ensuring flavor stability and quality upgrades in high-end aged spirits products.
In terms of product innovation, Shede has launched products such as the low-alcohol "Shede Ease," "blind box mini-spirits," and "Shede Luck" to reach younger consumer groups. Shede Ease, marketed as the industry's "first low-alcohol, easy-to-drink aged spirit," received a large number of orders during its pre-sale phase. The classic product Shede Collection 10-Year performed well in the market after its launch, maintaining stable pricing throughout the year and laying a foundation for future development.
Last year, Shede Collection 10-Year won a gold medal at the 2025 International Spirits Challenge (ISC) and a grand gold medal at the 2025 International Spirits (China) Awards (ISGC). Tuopai Superior T68 also received a gold medal at the 2025 ISC.
As the aged spirits strategy advances, Shede Spirits' influence within the industry is growing. In 2023, the company led the drafting of two group standards: "Requirements for the Production and Traceability of Jar-Stored Aged Spirits" and "Ecological Aged Spirits Part 2: Chenxiang Baijiu." In 2025, it co-hosted the 7th China Baijiu Academic Symposium and the First Ecological Aged Spirits Academic and Technical Summit with Jiangnan University.
Overall, consumption of aged spirits remains concentrated among leading brands. However, Shede Spirits has already leveraged its brand recognition and quality advantages to enter the sub-premium and mass-market aged spirits segments, positioning itself to benefit from future industry growth.
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