On the afternoon of March 18, ZJLD Group Chairman Wu Xiangdong conducted a live broadcast via video channel, unveiling the new Zhen 15 Fifth Generation product and a new marketing model. During the broadcast, Wu stated that Zhen 15 was launched in 2016, followed by the third generation in 2022 and the fourth generation in 2024. According to the information disclosed, cumulative sales of Zhen 15 have exceeded 15,000 tons, or over 30 million bottles, with sales revenue surpassing 10 billion yuan, making it a core major product for Zhen Jiu. The product has nationwide market coverage, performing particularly well in major sauce-flavor baijiu consuming provinces such as Guizhou, Hunan, Henan, Guangdong, and Shandong, ranking among the top three in market share within Guizhou.
However, at the end of last month, ZJLD issued a profit warning for fiscal year 2025, described as its most dismal performance forecast since listing, directly exposing the company's operational pressures amid the industry cycle. Concurrently, Chairman Wu Xiangdong's efforts to build a personal IP and the "Ten Thousand Merchants Alliance" model, while generating some channel payments and brand visibility, have failed to effectively counter the performance decline caused by falling sales of core products and channel destocking, creating a stark divergence between traffic and actual performance.
Revenue and Net Profit Both Decline, Second Half Turns to Loss ZJLD's 2025 profit warning indicates a significant drop in core operational metrics for the full year, with revenue nearly halved and net profit falling over 60%, highlighting operational pressures. According to the warning, the company expects 2025 revenue to be between 3.55 billion and 3.70 billion yuan, a decrease of 47.7% to 49.8% compared to 2024's 7.07 billion yuan. Profit attributable to equity shareholders is projected to be between 520 million and 580 million yuan, down 56.1% to 60.6% from 2024's 1.32 billion yuan. Adjusted net profit, approximately the same range, shows a sharp decline of 65.5% to 69.0% compared to 2024's 1.68 billion yuan.
Examining ZJLD's past financial data reveals that the pressure from declining performance has not eased. In the first half of 2025, the company reported revenue of 2.497 billion yuan, down 39.6% year-on-year, and an adjusted net profit of 613 million yuan, down 39.8%. Based on this, second-half 2025 revenue is estimated at only 1.053 billion to 1.203 billion yuan, a significant contraction from the 2.9 billion yuan in the second half of 2024, while the adjusted net profit shifted from profit to a loss, estimated between 30 million and 90 million yuan.
Regarding financial structure, as of June 30, 2025, ZJLD had total assets of 19.169 billion yuan, total liabilities of 5.294 billion yuan, and total equity of 13.875 billion yuan. Net cash flow from operating activities was negative 322 million yuan.
ZJLD attributed the significant performance decline primarily to weakened market demand leading to reduced baijiu consumption, especially in business and social entertainment and gifting occasions. Secondly, it was due to measures taken in the second half of 2025 to further reduce channel inventory.
From an industry perspective, ZJLD's performance decline is not an isolated case but reflects broader pressures on the sub-premium baijiu sector. Data compiled from broker reports by Southwest Securities and CITIC Securities indicate that the baijiu industry was in a bottoming adjustment phase in 2025, characterized by overall contraction, pressured wholesale prices, and high inventory. By the end of Q3 2025, the average inventory turnover days for 20 A-share baijiu companies soared to 1,456.29 days, a sharp 63.2% increase year-on-year, hitting a new high since 2015. Sub-premium and regional baijiu brands faced particular pressure, with demand in the 500-800 yuan price segment declining noticeably—a segment where most of ZJLD's products are positioned.
Core Brands Under Pressure, Issues Persist Post "Da Zhen" Launch and Alliance Model Behind the performance decline is comprehensive pressure on ZJLD's core brands. According to the company's 2025 interim report, its four core brands—Zhen Jiu, Li Du, Xiang Jiao, and Kai Kou Xiao—all experienced varying degrees of revenue decline in the first half of 2025, with a clear trend of falling volume and price.
Specifically, Zhen Jiu, the company's largest core brand, generated revenue of 1.492 billion yuan in H1 2025, accounting for 59.7% of total revenue, but saw a 44.8% year-on-year decline. The product's price per ton also dropped from 389,800 yuan/ton in 2024 to 323,400 yuan/ton. The Li Du brand, contributing 24.5% of revenue, declined 9.4%, with a more significant price drop of over 29%, from 492,000 yuan/ton to 348,000 yuan/ton. The declines for Xiang Jiao and Kai Kou Xiao were more severe, with H1 2025 revenues down 38.7% and 63.9% year-on-year, respectively.
To alleviate channel inventory pressure, ZJLD implemented multiple shipment halts starting early 2025 to advance destocking. On January 10, 2025, Guizhou Zhen Jiu stopped accepting orders for the third-generation Zhen 15 (including non-prize versions). On January 21, Li Du Jiu Ye suspended supply of core products like Li Du Gaoliang 1308 Shenyi Xianli, 1955, and 1975. On February 12, 2026, Li Du Jiu Ye issued another suspension notice, halting supply for 1308, 1955, 1975, and the Li Du Wang series, with resumption timing to be announced.
Amid ongoing pressure on core brands, ZJLD launched the strategic product "Da Zhen · Zhen Jiu" in June 2025, priced around 600 yuan, aiming to fill the gap between Zhen 15 (approx. 400 yuan) and Zhen 30 (approx. 800 yuan). Wu Xiangdong expressed strong confidence in "Da Zhen." At the 2025 World Employment Development Summit, he stated that occupying the consumer price band is the most critical task for Zhen Jiu currently and in the future. To offer consumers high-quality baijiu at an affordable price, Zhen Jiu launched Da Zhen · Zhen Jiu in the first half of 2025, employing a "Tianji Sai Ma" strategy, positioning it in the 600 yuan band. It has been well-received, with market demand outstripping supply, and over 1,000 customers awaiting delivery. Da Zhen · Zhen Jiu aims to show consumers worldwide that they can get the highest quality-to-price ratio premium sauce-flavor baijiu at the 600 yuan price point.
Concurrently, ZJLD initiated the "Ten Thousand Merchants Alliance" model, binding distributors through equity incentives to build a manufacturer-distributor community of interest, attempting a breakthrough via product upgrade and channel innovation.
Under Wu's leadership, Da Zhen · Zhen Jiu and the alliance model have achieved some interim results. By early February 2026, marking 200 days since Da Zhen's launch, Wu revealed in a large live broadcast titled "Our 200 Days" that the alliance model had signed 3,816 merchants, covering 31 provinces and 280 cities nationwide, generating payments up to 580 million yuan. As of March 18, 2026, over 80 wealth creation forums for the alliance had been held.
Notably, to maintain channel order and protect alliance members' interests, the model enforces rules against overstocking, requires batch deliveries, and strictly prohibits low-price online sales. In a video titled "The Biggest Pain in the Liquor Industry is Uncontrollable Prices, but Da Zhen Can!" on the Douyin account "Wu Xiangdong - Zhen Jiu Li Du," ZJLD published penalty notices for Da Zhen alliance merchants as short videos on the video channel "Zhen Jiu Shi Jie." A recent video showed that from March 8-14, Zhen Jiu conducted special inspections of 252 Da Zhen alliance merchants nationwide, reclaiming 303 bottles of Da Zhen, involving 29违约 merchants (online platforms/offline markets), including 3 for price violations and 26 for distribution issues.
Despite impressive payment and merchant recruitment figures for Da Zhen · Zhen Jiu, it remains insufficient in the short term to offset the overall revenue gap created by the sharp decline of original core brands. More critically, the 600 yuan price band where Da Zhen competes is the most fiercely contested segment in sub-premium baijiu. Major products like Moutai 1935 and Junpin Xijiu, originally in the 1,000 yuan band, have seen market prices drop to around 600 yuan, creating significant downward competition pressure on Da Zhen. Coupled with the ongoing demand slump in the 500-800 yuan band since 2025, terminal sales pressure for Da Zhen has intensified.
Traffic Fails to Convert, Personal IP Disconnected from Performance Furthermore, Wu Xiangdong's personal IP building has become a key support for advancing the alliance model. According to reports from media like China National Radio, Wu started operating his personal video channel in July last year, accumulating over 160 videos with a total view count of 680 million, and 4.62 million likes, 2.94 million favorites, 1.93 million shares, and 223,000 comments. One video exceeded 100 million views, with 16 videos reaching tens of millions of views. On March 17, Zhenghe Island and New Rank jointly released the "Top 100 Entrepreneur Video IP List" for Jan-Feb 2026, where the channel "Wu Xiangdong—Zhen Jiu Li Du" ranked first.
Data shows that from January to February this year, Wu published 25 videos, garnering 691,000 likes and a communication index of 878.5. On February 10, Wu hosted his seventh large live broadcast themed "Live the New Year Vibe," receiving 18.08 million likes across platforms, with 7.45 million viewers and a peak concurrent online audience of 540,000.
However, this substantial traffic has not fully translated into genuine terminal consumer demand. To date, ZJLD has not publicly disclosed core sales metrics for Da Zhen · Zhen Jiu, such as terminal opening rates, raising market doubts about the authenticity of the traffic and its conversion efficiency.
Regarding core issues like the halving of corporate performance, sales pressure on Da Zhen · Zhen Jiu, and strategic implementation challenges, an interview request was sent to ZJLD seeking official responses, but no reply had been received.
In its profit warning, ZJLD outlined three key strategies for 2026: First, continued promotion of the Ten Thousand Merchants Alliance model. Since its launch in June 2025 and the adoption of the alliance merchant equity payment plan in September 2025, the company has made significant progress in boosting sales, attracting quality distributors, and enhancing the Zhen Jiu brand's fame. In 2026, the company will vigorously advance this model as a key strategic priority, expecting substantial revenue contribution. Second, optimizing channel inventory. The significant efforts in H2 2025 to reduce channel inventory aimed to lay a solid foundation for 2026 business development, despite impacting 2025 revenue. The company plans to further allocate resources to market development and consumer cultivation to accelerate channel turnover and strengthen its competitive position in core regional markets. Finally, capturing new consumer demand. The company will continue accelerating penetration in county and township markets with sub-premium and lower-priced products and expand share in social occasions like birthdays and wedding banquets.
Amid the significant performance decline, ZJLD's executive compensation and personnel changes have also drawn market attention. According to the company's 2024 annual report and public disclosures, former CEO Yan Tao received an annual salary of 15.388 million yuan in 2024, including 10.06 million yuan in equity incentive payments. Vice Presidents Zhu Lin and Luo Yonghong received salaries of 11.804 million and 11.802 million yuan, respectively, each with 9.241 million yuan in equity payments. Wu Xiangdong's 2024 salary was 5.662 million yuan.
Additionally, a non-director highest-paid individual received 17.241 million yuan in 2024, including 15.204 million in equity payments. Overall, total director remuneration reached 47.161 million yuan in 2024, a sharp increase of 106.03% year-on-year.
In terms of personnel adjustments, ZJLD saw several important changes in 2025. According to company announcements, in May 2025, Wu Xiangdong's son, Wu Qirong, was appointed an executive director with an annual salary and discretionary bonus totaling 1.25 million yuan. In October, former CEO Yan Tao stepped down, succeeded by Tang Xiangyang, with a combined salary and bonus of 5 million yuan per year, significantly lower than Yan Tao's previous package. Also, on May 9, 2025, non-executive director Wu Guangshu retired, and Wang Lianbo and Huang Huier were appointed joint company secretaries.
From an industry environment perspective, the "dumbbell-shaped" consumption trend in baijiu is expected to persist in 2026, with demand for premium and mass-market baijiu remaining relatively stable, while the sub-premium segment continues to face significant operational pressure. Broker reports from institutions like Southwest Securities predict the baijiu industry will gradually bottom out and recover in 2026, but the recovery process remains uncertain. The Matthew effect will become more pronounced, with leading companies demonstrating stronger risk resilience, while smaller regional players face further compression of生存空间.
For ZJLD, the 600 yuan price band where Da Zhen · Zhen Jiu competes will continue to face downward competition from major products like Moutai 1935 and Junpin Xijiu. Whether its "personal IP + Ten Thousand Merchants Alliance" model can navigate the industry cycle and effectively convert traffic into terminal consumption awaits further validation in the market.
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