Company Reports

Chinese baijiu sales have deteriorated since the second half of 2024, and the sector has lagged the broader market. An aging population and falling per capita drinking rates point to a shrinking pool of buyers, prompting us to reassess competitive strength across our coverage.

Anhui Gujing is one of the eight nationally well-known baijiu brands. Thanks to its strong brand heritage and deep-rooted distribution network in the regional market, Gujing has become Anhui’s largest distiller by sales since 2012 and has been leading the province’s premiumization via sales growth of its flagship premium Gujing Year Puree series, which allows the company to enjoy decent profitability and returns.

Second-quarter results from our mass-market baijiu coverage diverged. Anhui Yingjia continued its growth trajectory from the first quarter, with net profit rising 8% year on year, while Anhui Gujing's earnings deteriorated further, with net profit plunging 58%.

Anhui Gujing is one of the eight national well-known baijiu brands. Thanks to its strong brand heritage and deep-rooted distribution network in the regional market, Gujing has become Anhui’s largest distiller by sales since 2012 and has been leading the province’s premiumization via sales growth of its flagship premium Gujing Year Puree series, which allows the company to enjoy decent profitability and returns.

Anhui Gujing's earnings deteriorated sharply in the fourth quarter of 2025, with revenue tumbling 47% and the bottom line turning negative. The weakness extended into the first quarter of 2026, as revenue and net profit fell a further 19% and 31% year on year, respectively.

Our channel checks continue to indicate persistent weakness in baijiu demand, with the sector facing double-digit revenue declines ahead of the Lunar New Year holiday. However, performance varies across segments—premium baijiu, led by Moutai, is showing signs of modest demand improvement.

Anhui Gujing is one of the eight national well-known baijiu brands. Thanks to its strong brand heritage and deep-rooted distribution network in the regional market, Gujing has become Anhui’s largest distiller by sales since 2012 and has been leading the province’s premiumization via sales growth of its flagship premium Gujing Year Puree series, which allows the company to enjoy decent profitability and returns.

Gujing's third-quarter performance weakened, with revenue and net profit falling 52% and 75% year on year, respectively

Our channel checks continue to indicate persistent weakness in China's consumer sentiment and elevated inventory levels for Baijiu. Golden Week sales for the sector declined by 20%-30% year on year, and inventory levels have increased by about one month.

Anhui Gujing is one of the eight national well-known baijiu brands. Thanks to its strong brand heritage and deep-rooted distribution network in the regional market, Gujing has become Anhui’s largest distiller by sales since 2012 and has been leading the province’s premiumization via sales growth of its flagship premium Gujing Year Puree series, which allows the company to enjoy decent profitability and returns.

Gujing's second-quarter growth weakened, with revenue and net profit falling 14% and 12% year on year, respectively.

Anhui Gujing is one of the eight national well-known baijiu brands. Thanks to its strong brand heritage and deep-rooted distribution network in the regional market, Gujing has become Anhui’s largest distiller by sales since 2012 and has been leading the province’s premiumization via sales growth of its flagship premium Gujing Year Puree series, which allows the company to enjoy decent profitability and returns.

Anhui Gujing achieved year-on-year revenue and net profit growth of 16% and 20%, respectively, in 2024, followed by increases of 10% in revenue and 13% in net profit for the first quarter of 2025. The firm aims for steady growth in 2025, without specifying a target.

Amid China's macroeconomic and consumption headwinds, our baijiu coverage trailed the broader market in 2024, falling 19% on average, compared with a 13% rise in the Shanghai Composite Index.

Near-term headwinds in the macroeconomy have weakened baijiu demand and the sector’s profitability, with slower year-over-year sales growth across all segments in the third quarter versus the previous quarter. We expect the cyclical weakness to persist in the next 1-2 quarters, and we remain selective, with a preference on premium and leading brands given their relatively resilient demand.

Narrow-moat Anhui Gujing’s first-half results were largely in line with our expectations, with revenue and net profit rising 22% and 29% year over year, respectively. Although sales growth slowed slightly in the second quarter to 17%, we think it is still decent amid the current weak macroeconomic environment. We believe Gujing’s leadership in its home market of Anhui province positions it well as one of the key beneficiaries of the stronger local economy versus China as a whole. This should continue to drive robust demand and a solid premiumization trend for the firm’s baijiu sales. In addition, Gujing’s expansion into nationwide markets, along with improving cost efficiency, should further boost sales growth and margin expansion. We maintain both our earnings forecasts and fair value estimate of CNY 236 per share for Gujing. We think the shares are undervalued currently, underpinned by a strong five-year net profit compound annual growth rate of 16% between 2023 and 2028.

Anhui Gujing is one of the eight national well-known baijiu brands. Thanks to its strong brand heritage and deep-rooted distribution network in the regional market, Gujing has become Anhui’s largest distiller by sales since 2012 and has led the province’s premiumization via sales growth of its flagship premium Gujing Year Puree series, which allows the company to enjoy decent profitability and returns.

Despite still-sluggish consumer sentiment in China, demand for mainstream-focused leading baijiu brands remains robust. Anhui Gujing and Anhui Yingjia both posted strong 2023 and first-quarter 2024 results, with net profits slightly ahead of our expectations on accelerating mix upgrades and optimized costs. We believe Gujing’s and Yingjia’s leadership in their home market of Anhui province positioned the two companies well as the key beneficiaries of increased travelling and socializing, as well as the stronger local economy. These will continue to drive a robust demand and premiumization trend for baijiu sales, while improving cost efficiency will further boost margins.

Anhui Gujing is one of the eight national well-known baijiu brands. Thanks to its strong brand heritage and deep-rooted distribution network in the regional market, Gujing has become Anhui’s largest distiller by sales since 2012 and has led the province’s premiumization via sales growth of its flagship premium Gujing Year Puree series, which allows the company to enjoy decent profitability and returns.

We expect the China baijiu sector to extend its sluggish sales into first quarter 2024, which is reflected in lower wholesale prices and higher inventory levels for the sector as a whole compared with a year ago. However, performance was divergent across segments. Our channel checks suggest demand for premium baijiu and mainstream-focused local brands remains resilient. In contrast, subpremium brands, except Shanxi Fen Wine, have witnessed varying degrees of sales pressure, as demand is closely tied to overall economic conditions. This is mainly in line with our earlier assumptions, and we maintain both our earnings forecasts and fair value estimates for the baijiu names we cover.