Shanxi Fenjiu is removed from the FT China A50. A long-term question for the leading Baijiu brand.

For years, the Baijiu industry has been accustomed to top brands rising steadily and familiar faces appearing on the index lists. When these lists change, the first thing that often gets amplified isn’t the frontline channel sentiment of the liquor companies, but rather the market’s reassessment of a leading Baijiu brand’s significance. The recent adjustment to the FTSE China A50 index carries this implication.

According to a report by Securities Times on March 4, 2026, FTSE Russell announced revisions to the FTSE China Index series, which will take effect after the close on March 20, 2026 (Friday). Among these changes, China Shipbuilding, Tianfutong Communication, and Wanhua Chemical are added to the FTSE China A50 Index, while China Everbright Bank, CRRC, and Shanxi Fenjiu are removed.

The report points out that the logic behind periodic index adjustments mainly relies on multiple factors such as market capitalization, liquidity, and financial health. The composition adjustments are highly correlated with the company’s stock performance at different stages. This change reflects shifts in the main themes of the A-share market.

1. A50 Exit: What’s Next for Leading Baijiu Brands?

Looking at the new entrants, they mainly come from sectors like shipping, optical modules, and chemicals. The companies leaving the list include banks, rail transit equipment, and Baijiu. These list changes are largely driven by shifts in market capitalization rankings rather than sudden operational turnarounds of a single liquor company. However, Shanxi Xinghuacun Fenjiu Co., Ltd. (hereafter “Shanxi Fenjiu”) being removed from the FTSE China A50 index can be seen as a reordering based on consumer stocks and, to some extent, a reflection of changes in the market valuation of leading Baijiu brands. The list change is just a trigger; the real impact lies in the fund rebalancing caused by the removal, but what companies need to focus on are their revenue growth rates, regional sales changes, channel income variations, and the alignment between expenses and profit growth.

For Shanxi Fenjiu, whether it re-enters the index later isn’t the key; what matters is which revenue streams continue to support its growth after the slowdown, which areas face challenges, which channels still have support, and which are experiencing disruptions. Beyond the list, these are more important and long-term questions. Looking back at 2024, Shanxi Xinghuacun Fenjiu’s annual report shows revenue of 36.011 billion yuan, up 12.79%; net profit attributable to shareholders was 12.243 billion yuan, up 17.29%; and net cash flow from operating activities was 12.172 billion yuan, up 68.47%.

Source: Shanxi Xinghuacun Fenjiu Annual Report 2024

Furthermore, the same report indicates that in 2024, Shanxi Fenjiu’s main business revenue was 35.875 billion yuan, with mid-to-high-end liquor accounting for 26.532 billion yuan, up 14.35%; other liquor sales totaled 9.342 billion yuan, up 9.40%. The gross margin of the food manufacturing segment was 76.30%, an increase of 0.93 percentage points from the previous year. From this data, it’s hard to conclude that the company has lost its top-tier position.

Source: Shanxi Xinghuacun Fenjiu Annual Report 2024

This makes the removal more of a side note—more like a normal occurrence—rather than a sign of decline. The reordering by capital isn’t solely based on historical status. As growth slows in the Baijiu industry, and sectors like manufacturing and technology attract more capital, Shanxi Fenjiu will be subject to more rigorous re-evaluation. The index change doesn’t mean the company has suddenly lost its foundation; it indicates that the market is now weighing Baijiu leaders with more scrutiny than in previous years. The broader market shifts, which are not captured in the March 4 list, are the real story. The A50 index simply highlights these changes early.

2. Behind the List Changes: Slower Growth

In 2024, Shanxi Fenjiu’s revenue was 36.011 billion yuan, up 12.79%. According to Xinhua News Agency’s “Xinhua Liquor Weekly” on May 9, 2025, 20 listed A-share Baijiu companies achieved a combined revenue of 442.227 billion yuan in 2024, up 7.3%, with a net profit attributable to shareholders of 166.631 billion yuan, up 7.4%. Based on their 2024 annual reports, Shanxi Fenjiu remains among the top in revenue.

However, in 2025, its growth rate started to decline. The Q1 2025 report shows revenue of 16.523 billion yuan, up 7.72%; net profit of 6.648 billion yuan, up 6.15%; and net cash flow from operating activities of 7.027 billion yuan, down 0.21%. Revenue and profit are still increasing, but cash inflow is no longer as strong as in 2024.

By mid-2025, the data shows further changes. The H1 2025 report indicates revenue of 23.964 billion yuan, up 5.35%; net profit of 8.505 billion yuan, up 1.13%; and net cash flow of 5.980 billion yuan, down 24.59%. Sales expenses increased by 19.10%. Revenue is still growing, but profit growth is slowing, cash flow is weakening, and expenses are not decreasing proportionally.

In the third quarter of 2025, the slowdown became more evident. The Q3 report shows revenue of 32.924 billion yuan, up 5.00%; net profit of 11.405 billion yuan, up 0.48%; and net cash flow of 8.982 billion yuan, down 21.45%. The quarterly revenue was 8.960 billion yuan, up 4.05%, but net profit declined by 1.38%. Revenue continues to grow, but profit is turning negative on a quarterly basis.

These data points suggest that Shanxi Fenjiu isn’t merely experiencing a slowdown in growth but rather a narrowing of its high-growth phase. This is closely tied to the industry environment. Shanxi Fenjiu remains one of the few companies still achieving double growth in this cycle. According to a report by Xinhua News on January 20, 2026, among the top Baijiu companies, only Kweichow Moutai and Shanxi Fenjiu maintained both revenue and profit growth in Q3 2025; others saw declines in key metrics.

This indicates Shanxi Fenjiu isn’t falling behind but is among the few still growing in a pressured industry. Its importance remains. The industry landscape has shifted, and leading companies can continue to advance not because of tailwinds but due to their solid fundamentals. The removal from A50 partly shows that the market now considers whether Shanxi Fenjiu still holds its previous high position, especially as its growth slows from double digits to single digits, profits approach zero growth, and cash inflows weaken. The list change reflects a cap on growth, not just a list update—it’s a cap on operational momentum at the capital level.

3. Regional, Product, and Channel Changes

Shanxi Fenjiu’s strength in recent years largely came from nationwide expansion. The 2024 annual report shows that in 2024, domestic sales revenue was 13.5 billion yuan (37.63%), while exports accounted for 22.374 billion yuan (62.37%). The distribution network included 835 dealers domestically and 3,718 abroad. By 2024, Shanxi Fenjiu was no longer just relying on local sales; the broader national market was its main revenue source.

Source: Shanxi Xinghuacun Fenjiu Annual Report 2024

However, the Q1 2025 data shows some divergence in product categories and channels. Revenue from Fenjiu in Q1 2025 was 16.212 billion yuan, up 8.23%; other liquor sales were 2.68 billion yuan, down 15.49%. Channel-wise, agency sales were 15.623 billion yuan, up 10.53%; direct sales, group buying, and e-commerce were 857 million yuan, down 26.23%. Regionally, domestic sales were 6.083 billion yuan, up 8.70%; exports were 10.396 billion yuan, up 7.18%.

This suggests that early in 2025, core Fenjiu still had strong support from the main brand and agency channels, but secondary product lines and direct/online channels faced pressure. The initial impact was on the margins outside the core, not a full-scale collapse.

In the first half of 2025, the trend continued. The H1 report shows revenue of 23.391 billion yuan, up 5.75%; other liquor sales declined 10.55%. Agency sales increased 7.17%; direct and group buying sales decreased 17.63%. Regionally, domestic revenue was up 4.04%, and exports up 6.15%. Compared to Q1, growth slowed across the board, with some categories declining.

By the end of H1 2025, the dealer network also showed mixed signals. Domestic Fenjiu dealers increased slightly, especially abroad, but other liquor dealers continued to shrink. The number of dealers in Shanxi Fenjiu’s core channels shifted from net decline to net increase, especially outside Shanxi, indicating a channel restructuring.

In the third quarter, the data shows further narrowing. Revenue was 32.171 billion yuan, up 5.54%; net profit was 1.405 billion yuan, up only 0.48%; cash flow declined 21.45%. The total revenue growth slowed, and profits and cash flow showed signs of strain. The dealer network also experienced mixed changes, with some regions and channels contracting.

Overall, Shanxi Fenjiu’s growth in 2025 is not just slowing but narrowing across multiple dimensions—regional, product, and channel. The company’s challenge is how to adapt to these shifts, with future data needed to see how it responds.

Source: Beiduo Business & Beiduo Finance

Author: Duoke

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Any investment decisions are at your own risk.