Shede Spirits Rebounds: Inventory Begins to Return to Healthy Levels, Mass-Market Products Achieve High Growth

On March 20, Shede Liquor announced its 2025 annual report, achieving an operating income of 4.419 billion yuan and a net profit attributable to shareholders of 223 million yuan, with a significant narrowing of the year-on-year performance decline. Meanwhile, Shede Liquor announced a high dividend plan, proposing a cash dividend of 3.10 yuan (including tax) per 10 shares, totaling 102 million yuan (including tax), accounting for 45.67% of the net profit attributable to shareholders.

In recent years, the liquor industry has entered a deep adjustment period, forcing liquor companies to reduce inventory and slow down production, leading to varying degrees of impact on listed liquor companies. After a round of proactive adjustments, Shede Liquor’s布局 in old liquor, mass-market products, and diversified channels is driving a recovery in company performance.

Last year, relying on brand strength stabilized core products, with the collectible Shede 10-year maintaining stable prices, Shede celebrations seeing sales double, and Shede Dao experiencing growth in both sales and bottle openings. On the other hand, income from mass-market price segments grew against the trend by 5.75%, becoming an important growth engine.

Inventory Reduction Achieves Phase Results; Mass-Market Products Show High Growth

In 2025, the liquor industry faced the impact of soft consumption and total volume contraction, making “inventory reduction” a common issue for the entire industry. Shede Liquor insists on the strategy of “stabilizing prices, controlling inventory, and strengthening sales,” actively promoting channel inventory digestion through a series of measures.

From an operational perspective, Shede Liquor seized opportunities in the mass-market product sector, optimizing product structure and achieving breakthroughs through major products. Last year, the strategic major product Tuo Pai Special Grade T68 saw sustained high-speed growth in sales, bottle openings, and shelf data. The mid-range product Shede Dao achieved growth in both sales and bottle openings by penetrating into town markets, capturing banquet scenarios. Currently, the total sales revenue of ordinary liquor reached 733 million yuan, a year-on-year increase of 5.75%, becoming an important growth engine.

On the channel side, the company continually deepens its channel penetration and reach while focusing on cultivating consumers. Beyond traditional channels, Shede Liquor has developed diversified channels such as e-commerce, live streaming, and group buying direct sales. Last year, e-commerce channel sales revenue reached 604 million yuan, a significant year-on-year increase of 35.46%, becoming an important supplement to traditional channels. According to research data from Guojin Securities, the e-commerce channel growth rate in the fourth quarter of 2025 still reached over 20%, with emerging e-commerce and live streaming bases expected to maintain good growth in the future.

While cleaning up inefficient distributors, Shede Liquor has also provided strong support for channels, adjusting expense policies and payment schedules to accelerate distributor capital turnover, ensuring distributor profits to enhance channel confidence. Currently, the effects of Shede Liquor’s inventory reduction are evident. According to public information, the company’s channel inventory was around three months before the Spring Festival, already in a relatively healthy state, with main product prices stable.

Reflected in financial terms, last year’s revenue and net profit decline for Shede Liquor significantly narrowed year on year, with sales of goods receiving cash at 4.82 billion yuan, and the cash collection ratio still above 100%, indicating good payment conditions. The net cash flow from operating activities improved year on year, and management expenses decreased by 12.39% year on year, showing further optimization in cost control.

Where Does Shede Liquor’s Resilience Come From?

The current liquor industry has shifted from the “incremental expansion” phase to the “stock game” phase, where the core competitiveness of liquor companies lies in brand barriers.

Shede Liquor is one of the “Six Golden Flowers” of Sichuan liquor, with its brands “Shede” and “Tuo Pai” being selected for 22 consecutive years in the “China’s 500 Most Valuable Brands,” with a total brand value reaching 190.698 billion yuan in 2025.

In fact, Shede Liquor’s development has always been accompanied by product innovation and brand enhancement. In its early listing phase, it quickly opened up the market via Tuo Pai, and during the industry adjustment period in 2001, it launched the “Shede” brand to enter the mid-to-high-end market. In 2010, it proposed a dual-brand strategy of “Shede + Tuo Pai” to position itself for consumption upgrades. In 2019, amidst increasingly fierce homogenous competition in the industry, it introduced the “Old Liquor” strategy, using differentiation as a selling point, and began to enhance its layout for high-end light bottle liquor and the thousand-yuan price segment. This was a crucial brand upgrade for Shede Liquor.

In recent years, old liquor has begun to transition from “niche collection” to “mass consumption,” with the market size gradually expanding. According to the China Alcoholic Drinks Association, it is estimated that by 2024, the market size for aged liquor in China will exceed 150 billion yuan, making old liquor an important segment in the liquor market.

For liquor companies, the greatest barrier to competing in the old liquor market is inventory. Since 1976, Shede Liquor has reserved a certain proportion of the highest quality base liquor from each batch for strategic storage, forming a large inventory of old liquor, which has become the company’s greatest advantage.

As of 2025, Shede Liquor’s inventory of semi-finished liquor (including base liquor) reached 182,100 kiloliters, with high-quality aged liquor reserves of approximately 120,000 to 130,000 tons, and more than 80% of the reserves being high-quality old liquor. The age span of the reserved old liquor extends over several decades, providing scarce resources for flavor stability and quality upgrades of high-end aged liquor products.

In terms of product innovation, Shede has launched low-alcohol products like “Shede Zizai,” “Blind Box Mini Liquor,” and “Shede Now,” targeting young consumer groups. Shede Zizai is the industry’s “first low-alcohol drinkable old liquor,” receiving a large number of orders during the pre-sale phase. Another classic product, collectible Shede 10-year, performed well in the market after its launch, maintaining stable prices throughout the year and laying a foundation for future development.

Last year, collectible Shede 10-year won the gold medal at the 2025 International Spirits Challenge (ISC) and the grand gold medal at the 2025 International Spirits (China) Grand Prix (ISGC); Tuo Pai Special Grade T68 also won a gold medal at the 2025 International Spirits Challenge (ISC).

With the advancement of the old liquor strategy, Shede Liquor’s influence in the industry is also increasing. In 2023, the company took the lead in drafting two group standards: “Production and Traceability Requirements for Jar-Stored Old Liquor” and “Ecological Old Liquor Part 2: Aged Fragrant Liquor.” In 2025, it co-hosted the Seventh China Liquor Academic Seminar and the First Ecological Old Liquor Academic and Technical Summit Forum with Jiangnan University.

Overall, while old liquor consumption is still concentrated on leading brands, Shede Liquor has already leveraged its brand recognition and quality advantages to penetrate the mid-to-high-end and mass old liquor markets, and is expected to share in the industry’s growth dividends.