Kuaiji Mountain's performance doubles, can "burning money" marketing continue?

Ask AI · Can the beer strategy破解黄酒地域局限难题?

Huangjiu listed company Kuaiji Mountain Shaoxing Wine Co., Ltd. (referred to as “Kuaiji Mountain”) recently released its 2025 annual report, achieving double growth in revenue and net profit, with sales revenue of mid-to-high-end products increasing by 7.30% year-on-year, and sales of ordinary wine including sparkling Huangjiu and other wines growing by about 20%.

Behind the performance growth is Kuaiji Mountain’s continuous large-scale promotional marketing. In 2025, the company’s sales expenses reached 473 million yuan, a year-on-year increase of 42.67%; advertising and promotional expenses reached 262 million yuan, an increase of 105 million yuan from the previous year, which also led to a 27.70% decline in net cash flow from operating activities. Whether this performance boost driven by increased marketing investment can be sustained is worth watching.

Sales expenses increased by 42.67% year-on-year

Kuaiji Mountain’s 2025 annual report shows that during the reporting period, the company’s revenue was 1.82B yuan, up 11.68% year-on-year; net profit was 245 million yuan, up 24.70%; non-recurring net profit was 235 million yuan, up 32.06%. Regarding performance changes, Kuaiji Mountain stated that mainly due to changes in sales volume and other factors. This is also the reason for the company’s revenue and net profit maintaining double-digit growth since 2023.

Such performance relies heavily on continuously increasing marketing promotion expenses. In 2025, Kuaiji Mountain’s sales expenses soared to 473 million yuan, a 42.67% increase year-on-year. The company explained that this was mainly due to increased employee compensation for sales staff and advertising promotion costs.

The significant increase in advertising and promotional expenses to strengthen product marketing also caused the net cash flow from operating activities (238 million yuan) to decrease by 27.70%.

Looking at product sales volume, Kuaiji Mountain’s intensified marketing indeed led to increased sales. In 2025, revenue from the alcohol business was 1.77B yuan, up 11.79% year-on-year, with a gross profit margin of 58.45%, an increase of 5.70% from the previous year.

Among them, revenue from mid-to-high-end wines was 1.14B yuan, up 7.30%, with a gross profit margin of 67.33%, an increase of 5.76%. Revenue from ordinary wine and other wines was 627 million yuan, up 21.01%, with a gross profit margin of 42.25%, an increase of 7.63%. Other wines refer to sparkling wines (sparkling Huangjiu), small quantities of fermented white wine, etc.

In recent years, the Huangjiu industry has been in a period of high-end, youth-oriented, and nationwide transformation, with leading companies actively pushing their transformation. Kuaiji Mountain mentioned in its annual report that the company is promoting a “high-end, youthful” brand breakthrough, building a “Kuaiji Mountain + Lanting” dual-engine driving pattern, focusing on three core series products: 1743, sparkling wine, and Lanting. Among them, the sparkling wine series, proposed in 2023, has now become a “billion-level big product.”

Kuaiji Mountain’s performance growth is highly dependent on marketing investment, but can this high-investment model continue to be effective? Does this approach have universal significance for the Huangjiu industry?

Wine industry analyst Cai Xuefei told The Beijing News that Kuaiji Mountain’s 2025 “investment-driven growth” strategy has indeed stimulated the market in the short term, such as the growth of high-end “Lanting” and youthful “sparkling wine,” especially the achievement of billion-level sales for sparkling Huangjiu in two years, demonstrating the effectiveness of aggressive marketing in breaking the outdated perception of Huangjiu. However, he also believes that the sustainability of this model faces severe challenges: the rapid increase in sales expenses far exceeds revenue growth, indicating diminishing marginal returns; the company’s cash flow has significantly declined, and dividend payouts have shrunk, possibly exposing the financial strain caused by high investments. Moreover, overemphasizing marketing at the expense of R&D may undermine product quality and hinder long-term high-end positioning.

“Kuaiji Mountain has verified the feasibility of ‘high leverage and high intensity’ to break through the circle, injecting long-lost vitality and attention into the industry. But this high-cost, high-risk path is not sustainable for all companies. The common way out for the Huangjiu industry may be to leverage their own resources, focusing on deepening high-end value, exploring regional characteristics, or innovative experiential approaches to find more stable differentiation paths,” Cai said.

Will the beer strategy be “unsuitable” for Huangjiu?

Difficulty in breaking out of Jiangsu, Zhejiang, and Shanghai has been a long-standing problem for the Huangjiu industry. To this end, leading companies are promoting nationwide expansion through various means.

In 2025, regionally, Kuaiji Mountain’s Zhejiang region remains the main revenue source, with sales of 1.04 billion yuan, accounting for 58.98%, a slight increase year-on-year. Sales in Jiangsu and Shanghai regions were 136 million yuan and 308 million yuan respectively, with Jiangsu declining. This shows that Jiangsu, Zhejiang, and Shanghai still are Kuaiji Mountain’s primary markets; although the progress of nationwide expansion has improved, the effect remains limited.

In recent years, Kuaiji Mountain has also experienced personnel changes. In 2022, controlled by Fang Chaoyang, China Construction Trust Holdings Group Co., Ltd. acquired the company for 1.87B yuan. In 2023, Fang Chaoyang officially became chairman, entering the “Fang Chaoyang era,” with Yang Gang, from the home furnishing industry, serving as general manager. At the beginning of 2026, the board of directors was reshuffled, and industry veteran Tang Guijiang replaced Yang Gang as general manager. Industry insiders believe that the new management team will use beer-style channels and advantages to promote the company’s nationwide expansion.

Cai Xuefei believes that Tang Guijiang’s experience in “deep distribution” and “terminal intensive cultivation” in the beer industry is precisely the “fast-moving consumer goods gene” that traditional Huangjiu companies like Kuaiji Mountain lack. In the short term, this approach can be quickly replicated to products like sparkling Huangjiu that serve as “beer substitutes,” leveraging familiar channels such as catering, convenience stores, and instant retail, to achieve “lightning-fast” distribution outside Jiangsu, Zhejiang, and Shanghai, which is significant for the company’s nationwide expansion.

“Rationally speaking, Huangjiu is not beer. Its high-end narrative, cultural attributes, and slow consumer habit cultivation are fundamentally at odds with the high-frequency, ready-to-drink logic of beer’s fast-moving consumer goods. Whether Tang Guijiang’s approach will succeed depends not on copying CR Snow’s channel map in Sichuan, but on whether he can use the efficiency of beer to serve Huangjiu’s value and maintain the pricing system. This will inevitably be a long-term, patient, and skillful ‘war of endurance,’ rather than a ‘lightning strike’ relying solely on capital investment,” Cai said.

Beijing News reporter Qin Shengnan

Editor Li Yan

Proofreader Liu Baoqing