Northwest liquor companies face market pressure, Jin Hui Liquor's revenue and net profit both decline

Business News Reporter | Zhang Rui

On the evening of March 20, Jinhui Liquor (603919.SH) released its 2025 annual report. During the reporting period, the company achieved operating revenue of 2.92B yuan, a decrease of 3.4% year-on-year; net profit attributable to shareholders of 354 million yuan, down 8.7% year-on-year; non-recurring net profit attributable to shareholders of 348 million yuan, down 10.36% year-on-year.

Regarding the revenue decline, the company stated that it was mainly due to policy regulation, deep adjustments, and intensified competition in the Baijiu industry, leading to decreased sales volume, reduced operating income compared to the same period last year, and increased sales expenses compared to the previous year.

In terms of products, Jinhui Liquor’s performance across different price tiers showed significant differentiation. Products priced below 100 yuan saw a more obvious decline, with sales volume decreasing by 33.56% year-on-year, generating revenue of 536 million yuan, down 36.88% year-on-year; the main revenue driver, products priced between 100 and 300 yuan, performed relatively steadily, with sales volume up 1.05% and revenue up 3.09%, reaching 1.53B yuan, accounting for over half of total sales; high-end products priced above 300 yuan achieved rapid growth, with sales volume up 37.52% year-on-year, generating revenue of 709 million yuan, an increase of 25.21%. Overall, products priced above 100 yuan accounted for 80.71% of liquor revenue, an increase of about 10 percentage points from last year.

In terms of gross profit margin, Jinhui Liquor’s gross margin in 2025 was 63.17%, an increase of 2.25 percentage points year-on-year. Among them, products below 100 yuan had a gross margin of 47.85%, down 3.01 percentage points; products between 100 and 300 yuan had a gross margin of 66.50%, up 2.70 percentage points; products above 300 yuan had a gross margin of 76.17%, an increase of 0.18 percentage points.

The overall improvement in gross margin mainly benefited from the structural dividend brought by the revenue share of products above 100 yuan exceeding 80%, with high-margin products expanding their share, effectively boosting overall profitability. The simultaneous increase in gross margins of mid-to-high-end products also reflects the company’s growing brand premium capability in its core price segments.

Looking closely at Jinhui Liquor’s sales data within and outside Gansu Province, in 2025, the domestic market achieved revenue of 2.11B yuan, down 5.34% year-on-year, accounting for 76.05% of total revenue; the external market achieved revenue of 665 million yuan, down 0.81% year-on-year, accounting for 23.95%, an increase of 0.84 percentage points from last year. However, the gross profit margin in the domestic market was 60.52%, a slight decrease of 0.66 percentage points; outside Gansu, the gross margin was 70.21%, an increase of 8.86 percentage points.

In 2025, Jinhui Liquor actively adjusted its external distributors, attempting to improve resource allocation efficiency by reasonably reducing the number of distributors. The annual report shows that the number of external distributors increased by 80, while 171 were reduced. According to a research report from Guojin Securities, the company’s development in markets such as Shaanxi and Xinjiang outside Gansu has been good, Ninxia and northern markets remain stable, and efforts are focused on non-core regions like East China.

In terms of channels, Jinhui Liquor increased its efforts to promote online platforms in 2025. The annual online channel operating costs increased by 34.76%, with revenue reaching 118 million yuan, up 40.26%, and gross margin increased by 1.10 percentage points. The company stated that it is enhancing sales through refined operations in products, content, traffic, and consumer engagement to build a nationwide online marketing platform, serving as a third growth curve for brand empowerment, consumer cultivation, and sales growth.

Additionally, in 2025, Jinhui Liquor’s direct sales channel achieved revenue of 77 million yuan, up 4.36%; the distributor channel, which accounts for 88.5% of total revenue, generated 2.58B yuan, down 5.88%. It can be seen that traditional distributor networks face certain pressures during industry adjustments, while online channels are becoming an important growth engine.

Jinhui Original Liquor / Source: Jinhui Official Website

From a broader perspective of the Northwest region, Jinhui Liquor’s performance has been relatively stable. In the first three quarters of 2025, four listed liquor companies in the Northwest—Jinhui Liquor, Yilite, Tianyoude Liquor, and Huangtai Liquor—all faced downward pressure, with the regional Baijiu industry under overall stress.

Specifically, Tianyoude Liquor’s revenue in the first three quarters was 880 million yuan, down 10.79%, with net profit attributable to shareholders only 21.81 million yuan, a sharp decline of 62.03%; Huangtai Liquor continued its long-term sluggishness, with revenue of only 87.08 million yuan, down 23.25%, and a net loss of 7.1359 million yuan; Yilite’s revenue was 1.3B yuan, down 21.46%, with net profit attributable to shareholders plunging 43.06%, and net cash flow from operating activities at -273 million yuan, a significant decrease of 1241.37%. Moreover, Yilite’s revenue outside Xinjiang decreased by about 50%, and its nationwide expansion strategy has not met expectations.

By comparison, Jinhui Liquor’s revenue in the first three quarters declined by only 0.97%, and net profit attributable to shareholders decreased by 2.78%, reflecting its relative “resilience” among regional liquor companies, its stable position in the provincial market, and breakthroughs in online channels.

While continuing to expand market layout and optimize channels, Jinhui Liquor is also increasing capacity. According to the company’s official website, in February 2025, a total investment of 5 billion yuan was made to start the fourth phase of the Jinhui Hundred Billion Eco-smart Industrial Park.

As early as August 2025, Jinhui Liquor acquired 52.467 acres of secondary industrial land in Fujiashan Village, Fujiashan Town, Huixian County, Gansu Province, for 98.55 million yuan; in February 2026, it acquired another 1.9596 acres of primary industrial land for 36.83 million yuan, both for the construction of the Jinhui Hundred Billion Industrial Park project.

Source: Jinhui Official Website

However, while capacity construction is progressing steadily, Jinhui Liquor’s financial expenses and R&D expenses have shown different trends. The annual report shows that in 2025, financial expenses were -9.6716 million yuan, an increase of 50.11% (narrowing of the negative value), mainly due to a nearly 7 million yuan decrease in interest income from deposits; meanwhile, R&D expenses were 39.5758 million yuan, down 27.18%, mainly because R&D projects in this period decreased compared to the previous year. These two indicators have attracted market attention: the decline in interest income reflects changes in capital efficiency, while the reduction in R&D investment, though reducing expenses in the short term, may impact the company’s technological iteration and product quality improvement in the long run.

Additionally, amid performance pressure and increased capacity investment, Jinhui Liquor continued to maintain a relatively high dividend payout ratio. In 2025, it completed a cash dividend of 0.5 yuan per 10 shares for the 2024 fiscal year; in February 2026, it paid 0.2 yuan per 10 shares for the first three quarters of 2025; it also plans to distribute a cash dividend of 3.00 yuan per 10 shares (tax included), with the total annual dividend payout accounting for 42.06% of net profit attributable to shareholders.

For 2026, Jinhui Liquor stated in its annual report that with the full implementation of the “14th Five-Year Plan” and the continued rollout of policies to expand domestic demand, especially with the release of the “Guiding Opinions on Improving and Upgrading the Liquor Industry (2026-2030),” the Baijiu industry will迎来新的发展机遇与格局重构. The company will focus on developing new products based on consumer needs and accelerate the layout of intelligent brewing and digital marketing.