Kuaijishan Shaoxing Rice Wine Co.,Ltd. has demonstrated remarkable stock performance this year, with shares surging over 134% year-to-date in the secondary market.
The rice wine industry is experiencing significant changes as established player Kuaijishan pursues a path through market competition via intensive marketing investments and premium product strategies. On August 21, Kuaijishan released its first-half 2025 results. The company reported operating revenue of 817 million yuan, up 11.03% year-over-year, and net profit attributable to shareholders of 93.88 million yuan, up 3.41%.
Notably, the company's net profit growth lagged significantly behind revenue growth. This phenomenon primarily stems from a substantial increase in sales expenses—according to financial data, Kuaijishan's sales expenses reached 215 million yuan in the first half, surging 53.69% year-over-year.
**Premium Strategy Drives Growth, Zhejiang Market Shows Strong Performance**
Judging from first-half results, Kuaijishan's premium strategy has achieved significant success, with product mix and regional markets showing differentiated development trends. The company achieved dual improvements in revenue and gross margin by focusing on premium product lines and optimizing channel layouts amid overall industry pressure.
In terms of product structure, Kuaijishan's "premium-led" strategy has made breakthrough progress. Mid-to-high-end product lines contributed 521 million yuan in revenue, accounting for 63.8% of total revenue and serving as the core driver of performance growth.
The flagship "Lanting" series continued explosive growth, maintaining industry leadership after doubling sales volume in 2024. The sub-premium "1743" series grew 70% year-over-year, forming a comprehensive product portfolio.
Additionally, Kuaijishan's other alcoholic beverage businesses performed well, with revenue growth reaching 60.47%, reflecting active exploration in product diversification.
From a regional perspective, Zhejiang, as Kuaijishan's core base market, showed strong performance with revenue up 19% year-over-year, contributing 66% of total revenue. This achievement resulted from three strategic approaches: deepening "Spring Cultivation Summer Ice" channel initiatives and optimizing terminal network layout; combining local cultural IP to create rice wine-themed cultural tourism projects, such as collaborating with Michelin restaurants to develop premium consumption scenarios; and utilizing digital marketing for precision targeting, achieving record sales during e-commerce promotions like 618.
In contrast, markets outside the province saw declines, with Jiangsu and Shanghai dropping 14% and 11% respectively. This reflects two underlying issues: Kuaijishan's national expansion remains in preliminary stages with obvious shortcomings, and the "cultural circle barriers" inherent to rice wine as a category.
Outside the Jiangsu-Zhejiang-Shanghai region, consumer perception of rice wine remains limited to stereotypes of "cooking wine" or "elderly beverages," while baijiu has completed national education through social attributes and beer through youth-oriented marketing. Current data shows the national rice wine market is approximately 20 billion yuan, less than 2% of the baijiu market, with nearly 80% of sales concentrated in the Jiangsu-Zhejiang-Shanghai region.
Despite Kuaijishan's attempts to break through via cultural program sponsorships and e-commerce channel development (online revenue grew 18% in 2023), its national promotion efforts remain insufficient compared to baijiu brands' "high-profile strategies"—in 2023, Kuaijishan's out-of-province dealers accounted for only 25% of the total, with lower per-store output efficiency than in-province markets.
**Substantial Marketing Investment Increase, E-commerce Business Still in Investment Phase**
In the first half of this year, Kuaijishan significantly increased marketing efforts to enhance brand influence and capture market share.
In brand marketing, the company implemented a dual-drive model of "top-tier endorsement + cross-industry collaboration." In May, international star Daniel Wu was signed as brand ambassador, leveraging his elite image to strengthen market recognition of the premium "Lanting" series. Simultaneously, collaboration with top Douyin influencer "Bai Bing" created the "One Smoke Per Day" sparkling rice wine topic, with single video views exceeding 80 million.
Particularly noteworthy is IP operation innovation: activating traditional cultural IP through "Lady White Snake" collaboration for trendy gift boxes, while entering sports marketing by exclusively sponsoring the 2025 Jiangsu Provincial City Football League, using "rice wine + football" cross-industry attempts to break traditional consumption scenario limitations. This comprehensive marketing approach increased the brand's youth index by 27 percentage points compared to 2024, with consumers aged 18-35 growing to 39% of the total.
While these marketing strategies helped Kuaijishan break through multiple times and drove capital market favor for the entire rice wine sector, they also caused substantial growth in sales expenses.
Beyond brand marketing, Kuaijishan built a "comprehensive e-commerce + digitalized terminal" new sales network. Online channels implemented a "1+N" platform strategy, centering on the Tmall flagship store while simultaneously developing Douyin, Xiaohongshu and other content e-commerce platforms. During 618, the "influencer matrix + self-broadcasting room" combination achieved breakthrough GMV growth of 50 million yuan, with new sparkling rice wine products contributing 35% of sales.
Offline channels advanced "Spring Cultivation Plan 2.0," creating 100 brand experience stores in key cities that integrate tasting, cultural display and new retail functions. This online-offline integration model improved consumer reach efficiency by 40% but also brought enormous cost pressure.
Financial data shows Kuaijishan's sales expenses surged 53.69% to 215 million yuan in the first half, with digital marketing investment accounting for 42% and celebrity endorsement plus IP licensing fees representing 28%. While e-commerce business achieved 102 million yuan in revenue, the two e-commerce subsidiaries combined for losses exceeding 38 million yuan, reflecting the industry pain point of high traffic acquisition costs.
The sustainability of this "loss-for-market" strategy is questionable, particularly as online traffic dividends gradually diminish.
**Private Equity Veteran Quietly Takes Position, Institutions Maintain Buy Ratings**
Kuaijishan's stock performance has been impressive in the secondary market this year. From early April to late May, shares cumulatively rose nearly 160%, firmly holding the position as market cap leader in the rice wine sector. Despite periodic corrections, as of September 2 close, the company's year-to-date gain exceeded 134%, with a dynamic P/E ratio of 66.37 times, significantly above industry average.
Behind the enthusiastic capital market response lies strategic positioning by heavyweight investment institutions. The semi-annual report shows renowned private equity veteran Ge Weidong newly became the company's eighth-largest shareholder. As of the second quarter end, his holdings in Kuaijishan totaled 4.9715 million shares, representing 1.04% ownership with market value of approximately 112 million yuan.
Meanwhile, Ge Guilian, who has affiliated relationships with Ge Weidong, newly became the company's fourth-largest shareholder, holding 13.802 million shares at period end, representing 2.88% ownership with market value of approximately 310 million yuan. The moves by these two private equity veterans have drawn widespread attention and speculation from investors and industry professionals.
Reportedly, Ge Weidong is an investment veteran in both futures and A-share markets, known in industry circles as "Boss Ge." Previously, he favored technology stocks, with positions across multiple tech companies. Market sentiment toward Ge Weidong is generally positive, viewing him as having keen market instincts and exceptional ability to capture bull stocks. This move is therefore interpreted by markets as strong optimism about the rice wine industry's transformation and upgrade trends.
Additionally, professional institutions have responded positively to this capital operation. Huatai Securities raised its target price 20.53% to 25.07 yuan in its latest research report, maintaining a "Buy" rating.
Market analysts point out that this capital positioning has deep industrial logic. From an industry cycle perspective, rice wine is experiencing a critical transition from regional specialty to national consumer product, with 2025 industry scale expected to exceed 23 billion yuan, where premium products maintain compound growth rates above 25%.
From the company perspective, Kuaijishan has broken through price ceilings via premium series like "Lanting" and "1743," while opening young consumer markets through innovative categories like sparkling rice wine. This "orthodox yet innovative" strategy highly aligns with capital market growth demands.
Comments