To The Moon

Demand pressure in the baijiu market has once again shown up in Wuliangye Yibin Co.,Ltd. (SZSE: 000858) earnings.

On October 27, Wuliangye released its 2026 third-quarter report. In the third quarter, the company recorded operating revenue of 4.442 billion yuan, down 37.68% year on year; net profit attributable to shareholders was 958 million yuan, down 48.25% year on year.

This performance stands in sharp contrast with the first half of the year. In the first six months, Wuliangye's revenue and net profit attributable to shareholders grew 20.87% and 89.30%, respectively, year on year. But entering the third quarter, the earlier growth momentum did not continue, with both revenue and profit posting double-digit declines.

Wuliangye explained in its financial report that weaker market demand and lower sales of related products were the main reasons for the decline in third-quarter revenue and profit.

In fact, Wuliangye had already entered a period of deep adjustment starting last year.

In 2025, affected by factors such as the contraction of baijiu consumption scenarios and intensifying market competition, Wuliangye's sales volume fell 30.26% year on year, while inventory rose 45.18%.

In April this year, Wuliangye also made substantial corrections to its 2025 financial data. The company explained that, based on a review of its business model and the principle of prudence, it adjusted revenue recognition and accounting for certain businesses.

After the adjustment, Wuliangye's full-year 2025 revenue was 40.529 billion yuan, down 54.55% year on year; net profit attributable to shareholders was 8.954 billion yuan, down 71.89% year on year.

Last year's sharp decline in performance provided a low comparison base for this year's year-on-year growth.

In the first three quarters of this year, Wuliangye's net profit attributable to shareholders rose 49.98% year on year. The company explained that, in addition to the low base in the same period last year, strong sales momentum of core products during this year's New Year and Spring Festival peak season also supported performance.

However, as the peak season ended, product sales declined in the third quarter, and the earlier growth momentum failed to continue.

At the same time, Wuliangye is still increasing its market investment. In the third quarter, the company's selling expenses were about 1.476 billion yuan, up 19.6% year on year. Although the pace of investment growth slowed, revenue fell 37.68% in the same period, so selling expenses and revenue continued to move in opposite directions.

In the first three quarters, Wuliangye's cumulative selling expenses rose 64.7% year on year, and the continued increase in market investment has not yet reversed the decline in sales volume.

On the other hand, Wuliangye's cash collection pace is also changing.

In the first half of this year, the company's net cash flow from operating activities was negative 2.154 billion yuan, a sharp decrease from 31.137 billion yuan in the same period last year.

Although it turned positive in the first three quarters, the net amount was only 46.68 million yuan, down 99.83% year on year. Even though the income statement still showed growth, the net cash Wuliangye actually obtained from operating activities has fallen sharply.

Wuliangye gave the same explanation in both its interim report and third-quarter report: on the one hand, the base in the same period last year was relatively high; on the other hand, the company adjusted its collection policy in response to market changes, resulting in less cash received, while the amount of matured bank acceptance bills also declined year on year.

In the past, leading liquor companies relied on a settlement model in which distributors paid first and received goods later, allowing them to obtain relatively ample operating cash flow in advance. But in a market environment with weak demand, manufacturers need to rebalance product sales, channel funding pressure, and their own cash collection pace.

At present, Wuliangye still holds more than 110 billion yuan in monetary funds. However, amid weak market demand, whether increasing sales investment and adjusting collection policies can drive a sustained improvement in product sales momentum remains to be seen.