Jinshiyuan: The baijiu market is approaching its bottom, and in the future, drinking frequency may increase, but the amount consumed per occasion will decrease.

What social drivers are behind the shift in AI · Baijiu consumption towards self-enjoyment?

Recently, Jinshiyuan released a record of investor visit and reception. It revealed that the specific dividend plan will be formally communicated with major shareholders before the annual report, management may suggest further increase in the dividend payout ratio. The company will continue to optimize its dividend policy and actively reward the trust of investors.

The capital expenditure plan for the next few years is already quite clear. After the completion of the capacity expansion and technical renovation project at the South Factory, there will be no large-scale construction investments in the coming years. The subsequent finishing work of the original South Factory technical renovation project, as well as supporting wine cellars and storage facilities, are important measures to ensure production capacity and quality, and will be completed as scheduled.

The company’s investment attraction logic has shifted from passive to proactive development: by in-depth analysis of market information such as geographic location and consumer capacity, precisely targeting key regions and potential merchants for active negotiations, rather than seeking incidental cooperation opportunities at trade shows. Relying on short-term discounts at trade shows for investment attraction often lacks sustainability.

When asked whether the current downward pressure in the Baijiu market has bottomed out, and how consumers’ drinking habits and frequency will structurally evolve in the future, the announcement replied that, in terms of sales volume, it may not have fully bottomed out in the short term, but due to the large population base, it is already close to the bottom.

Future consumption trends will show that: drinking frequency may increase, but single-occasion consumption will decrease; motivation for drinking will shift from “social companionship” to “self-enjoyment.” As social activities change, scenes of independent drinking or small groups entertaining oneself will increase, which is essentially a natural return of Baijiu as a daily consumable. For groups with purchasing power, Baijiu is gradually evolving into a normalized consumption that aligns with life rhythm and dining pleasure, and this demand resilience will support the industry’s long-term survival.

Regarding the export trend of Baijiu, the announcement pointed out that the internationalization of Chinese Baijiu is an inevitable direction, with huge potential in overseas markets. However, the overall export scale remains relatively small, and market education and the establishment of consumer habits require a gradual process that cannot be achieved overnight (we have already established presence in 20 countries and regions). The acceptance of Baijiu in international markets mainly depends on the strength of national comprehensive power and the export of cultural soft power. Only when Chinese culture (including culinary culture) gains broader recognition and following internationally will the huge potential of the international market translate into real demand.

The company has been paying attention to market changes and the preferences of young people. Directions such as low-alcohol and women’s drinks have indeed been discussed internally, but no actual products have been launched yet. If there are any, they will be announced through public information.

Currently, the company’s main focus and resources are still on developing existing core products and deepening market penetration. Therefore, even if new products are introduced in the future, they are unlikely to have a significant impact on the company’s overall performance in the short term.

（Corporate Announcement）