On May 6, Wuliangye Yibin Co.,Ltd. (000858.SZ) saw its share price hit a new low, prompting its major shareholder to urgently announce a share buyback plan of 3 to 5 billion yuan in an effort to stabilize market sentiment. However, this move could not conceal the grim reality: the company’s 2025 revenue was halved year-on-year, and net profit attributable to shareholders plummeted by over 70%, indicating a sharp decline in both operations and profitability.
The drastic earnings decline was attributed to what the company described as a correction of accounting errors, which led to a major restatement of financial data for the first three quarters of 2025. Revenue was revised downward from 60.945 billion yuan to 30.638 billion yuan, while net profit attributable to shareholders was slashed from 21.511 billion yuan to 6.475 billion yuan. This overnight disappearance of over 30 billion yuan in revenue and 15 billion yuan in net profit sparked market uproar and intense scrutiny. By significantly lowering the base figures, the company reported a sharp year-on-year increase in both revenue and net profit for the first quarter of 2026.
Notably, the financial restatement coincided with the investigation and subsequent vacancy of the chairman position, and the delay in the annual report filing further heightened market concerns. Investors are questioning whether this is a legitimate accounting correction or a maneuver to shift historical burdens onto the previous management and ease the path for new leadership. As trust erodes, it remains to be seen whether buybacks, dividends, and other stabilizing measures can restore confidence.
Following a sharp decline in its share price, Wuliangye’s major shareholder quickly introduced a buyback plan. On the evening of May 6, the company announced that it had received a notice from its parent group, Wuliangye Group Co., Ltd., indicating its intention to increase its stake in the listed company over the next six months through methods such as centralized bidding and block trades. The buyback, funded by the group’s own capital, is set between 3 billion and 5 billion yuan, with no price range specified. After completion, the repurchased shares will be locked up for six months.
As of the announcement date, Wuliangye’s controlling shareholder, Yibin Development Holding Group Co., Ltd., held a 34.43% stake, while Wuliangye Group held 20.65%, making them joint actors with a combined 55.08% ownership. The buyback will not alter the company’s controlling shareholder or listing status.
The announcement came after Wuliangye’s shares opened 6.49% lower on May 6, hitting an intraday low of 90.1 yuan per share before closing at 92.26 yuan, down 4.96%. Although the company stated that the buyback reflects confidence in its long-term value, market observers largely view it as an attempt to support the stock amid price pressure.
The company’s performance showed a pattern of decline followed by a sharp rebound due to accounting adjustments. In 2025, the baijiu industry entered a phase of intense competition and structural change. National data showed declines in production, sales, and profits across the sector. Wuliangye’s full-year 2025 revenue fell 54.55% year-on-year to 40.529 billion yuan, while net profit dropped 71.89% to 8.954 billion yuan, returning to pre-2017 levels and marking the first simultaneous decline in revenue and net profit since 2015.
By product category, liquor revenue fell 55.36% in 2025, with core products like the Eighth Generation Wuliangye and 39-degree Wuliangye down 58.84%, and series liquors such as Wuliang Chun and Wuliang Tequ down 39.89%. Sales declined across all regions: eastern, southern, and northern areas saw drops of 58.99%, 54.69%, and 48.42%, respectively.
The steep revision of prior financials—cutting cumulative revenue by 30.307 billion yuan and net profit by 15.036 billion yuan for the first three quarters of 2025—enabled a strong first-quarter 2026 report. Revenue rose 33.67% to 22.838 billion yuan, and net profit surged 82.57% to 8.063 billion yuan, nearly matching the full-year 2025 figure. Without the restatement, first-quarter 2026 figures would have shown declines of 38.18% in revenue and 45.74% in net profit. However, net cash flow from operating activities turned negative at -2.535 billion yuan, which the company attributed to increased acceptance of bills receivable.
The extensive restatement has drawn investor criticism, with some accusing the company of treating financial reporting lightly. Wuliangye defended the move as a correction of accounting errors under applicable standards, stating that the adjustments—based on a review of its 2025 business model—provide a more prudent and accurate reflection of its financial condition.
However, analysts note that such corrections, intended to remedy genuine errors, are now under suspicion as tools for earnings management. The timing is notable: in late February, then-chairman Zeng Congqin was placed under investigation, leaving the chairman role vacant. The annual report, originally due on April 29, was delayed until after market close on April 30 and was signed by an acting representative, suggesting extended internal review processes.
Many in the market see the restatement as an attempt to assign past issues to previous management, thereby reducing pressure on incoming leadership. Despite accompanying the report with an 8–10 billion yuan buyback plan and a 10 billion yuan dividend proposal, Wuliangye faces a significant trust deficit. Industry observers note that the company stands at a crossroads, balancing industry-wide challenges with internal governance issues. While accounting adjustments may temporarily improve short-term figures, they risk undermining the company’s credibility. Sustainable value, analysts stress, depends on genuine performance, transparent governance, and stable operations—not base effects or financial engineering.
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