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The combined revenue of 19 A-share listed liquor companies shrank by about 7%, while their profits contracted by around 8%, with the entire industry experiencing a significant decline. Even the industry leader, Moutai, saw its profit decline for the first time in 12 years.
It is at this time that Wuliangye has turned in a dazzling performance report.
Revenue reached 28.4 billion yuan, up 21%. Net profit was 8.75 billion yuan, up 89%. At a time when the entire industry is struggling, with profits nearly doubling, has Wuliangye discovered a secret to getting rich?
Don't worry, turn back the clock to the late night of April 30, 2026, and the answer lies there.
While the entire industry is struggling to get through the winter, it has staged a comeback
This winter's chill can be gauged by a few numbers.
Luzhou Laojiao, Yanghe, and Shede, these established liquor companies, saw their profits drop by 30% to 50% in the first half of the year, with Shede's profit plummeting by over 60%. Luzhou Laojiao's revenue declined by 36.35% in the first half, ceding its fourth-place position in the industry to Yanghe. While consumption remains, the problem lies in the channels. With liquor piling up in distributors' warehouses and failing to sell, the manufacturers naturally dare not continue to aggressively push goods into the channels.
In this sea of green, Wuliangye's red color stands out particularly prominently.
Late at Night, Altering the Books
Why was Wuliangye able to "double"? The answer lies in the evening of April 30.
That day was the deadline for listed companies to submit their 2025 annual reports. Wuliangye had originally planned to disclose its report on April 29, but postponed it to April 30, citing the need to further refine the preparation and review of its periodic report. Late at night, Wuliangye suddenly released an announcement, which essentially said, "Sorry, we made a mistake in last year's accounting, and we're going to redo it."
The net profit for the first half of 2025 was revised from 19.49 billion yuan to 4.62 billion yuan, with a reduction of 14.87 billion yuan. Revenue was also revised from 52.77 billion yuan to 23.51 billion yuan, a decrease of 29.26 billion yuan. Looking back, the operating income for the first three quarters of 2025 was revised from 60.945 billion yuan to 30.638 billion yuan, and the net profit attributable to the parent company was revised from 21.511 billion yuan to 6.475 billion yuan. After the revision, the full-year revenue for 2025 was 40.529 billion yuan, down 54.55% year-over-year, and the net profit attributable to the parent company was 8.954 billion yuan, down 71.89% year-over-year, marking the largest decline since listing.
The company explained that previously, as long as distributors paid for and took delivery of goods, the revenue was considered confirmed, even though the products were still sitting in the distributors' warehouses and had not yet reached consumers. This time, the company is eliminating these fictitious revenues.
The market reacted quickly. On May 1, the Shenzhen Stock Exchange issued an annual report inquiry letter, requiring the company to explain whether it intentionally delayed corrections, concealed financial information, or used channels to artificially inflate revenue. The exchange also required the auditing firm, Tianzheng International, to provide a special inspection opinion on the reasonableness of the previous quarterly report audit procedures and the unqualified opinion, and to respond within 5 trading days. The letter also mentioned that the former chairman, Yu Zhongqin, was detained by relevant authorities in February 2026. On June 26, the company announced that the former chairman was removed from his director position due to his inability to perform his duties normally, and Deng Min was elected as the new chairman on the same day.
Ledger Magic
When looking at the accounts from both ends, 89.3% emerges.
87.53 divided by 46.24 equals 1.893 exactly, representing a year-on-year increase of 89.30%, with no discrepancy. Wuliangye's high growth in the first half of this year is built on the basis of last year's significantly lowered base.
Using a different comparison makes things clearer. Calculated based on the old accounting method before the correction, this year's 8.753 billion yuan is equivalent to 44.9% of 19.492 billion yuan, which actually represents a decline of 55.1%.
The same net profit, compared to a revised old account, increased by 89%, and compared to an unadjusted old account, decreased by 55%. Which figure is closer to the truth depends on whether the correction is justified. Of course, the regulatory authorities have not yet drawn a conclusion.
More specifically: excluding non-recurring items, first-half net profit came in at RMB 8.483 billion, still up 83.96% year over year; basic earnings per share were RMB 2.2551, up 89.31% year over year. Every layer of the calculation rests on the same restated base period.
Volume Increases, Prices Drop
The cash has been drained, so is the actual business viable or not? Upon closer examination, the situation is a mixed bag.
Good news for the main brand Wuliangye's liquor, with sales of 16,300 tons in the first half of the year, up 88% from last year, corresponding to revenue of 23.6 billion yuan, a 73% increase.
The bad news is that the increase in sales is mainly due to lower prices, with the price per ton of liquor dropping by about 8%.
Cutting prices to boost sales, similar to a supermarket clearance sale, has led to rapid sales but lower unit prices, resulting in decreased profit per bottle. More painfully, the mid-to-low-end series, which generated 3.2 billion yuan in revenue, plummeted 60%. Cheaper wines are being squeezed out of the market due to inventory competition.
By channel, the trend is the same. In the first half of the year, distribution revenue was 18.476 billion yuan, up 36.33% year-over-year, while direct sales revenue was 8.391 billion yuan, up only 1.81% year-over-year. The main driver of growth is still the efforts of distributors.
However, there is a bright spot. The overall gross margin for liquor was 84.61%, up 1.39 percentage points year-over-year. The structure is improving, with higher-end and more expensive liquor being sold.
05｜Spending Heavily to Boost Sales Volume
To get its liquor to end-users, Wuliangye has been willing to spend heavily over the past half year.
Selling expenses reached 6.3 billion yuan, up 80%. Promotional costs hit 4.49 billion yuan, a 170% surge — QR-code scans on bottle openings, cash giveaways, and event campaigns, all funded with hard money. Selling expenses grew 80% while revenue rose just 20%. What bridges that gap is plain to see.
Profits are written on the accounts, while cash is what's actually in your pocket.
The most noteworthy figure is in the cash flow: on one hand, the company reported a profit of 8.7 billion yuan on paper, but on the other hand, it experienced a net cash outflow of 2.15 billion yuan, compared to a net inflow of 31.1 billion yuan in the same period last year.
Where did the money go? The company's explanation is that it adjusted its payment collection policy, and the amount of matured acceptance bills decreased, which essentially means that the money is being collected more slowly.
Of course, Wuliangye is not all bad news. Among the leading liquor companies, it is one of the few that can still achieve positive growth, with 119.1 billion yuan in monetary funds on its accounts, and its strong foundation remains intact. Since June, the company has continuously disclosed multiple share repurchase progress announcements. This foundation has given it the capital to slowly navigate this adjustment.
06｜Clearing Inventory
Looking at the three numbers - production, inventory, and sales - the logic becomes completely clear.
At the beginning of the period, the inventory of finished wine in the warehouse was up 307% from the same period last year, with 25,100 tons on hand, a significant increase from last year's stockpile. Production, however, decreased by 30% in the first half of the year, as the company was cautious not to overproduce. In contrast, sales volume surged 88%.
Production decreased by nearly 30%, while sales increased by almost 90%, and the large gap in between is filled by relying on inventory.
While reducing production and clearing inventory, the stockpiled goods from last year were concentrated and sold off. Unfortunately, more detailed data also shows that these goods have not been completely digested. The ending inventory was 26,607 tons, which is 1,489 tons more than at the beginning of the year. The goods were sold, but the warehouse is still not empty.
This type of revenue has a technical name. In the 2025 annual report, Wuliangye added a new item, regulatory goods receipts, with a period-end balance of 26.315 billion yuan. The market's interpretation of this amount is that it represents payments already made by distributors, which cannot be recognized as income yet because the revenue recognition conditions have not been met. Whether this amount can be gradually converted into actual income in the future is more revealing than any single quarterly growth rate.
07｜Peak Season Ebb
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In the first quarter, which includes the lucrative Chinese New Year period, net profit reached 8.06 billion yuan, with strong earnings. However, in the second quarter, which is typically a slow period, revenue was 5.58 billion yuan, down 13% year-over-year, and net profit plummeted to 690 million yuan, a 91% quarter-over-quarter decline. The single-quarter net profit margin was only around 12.4%, with most of the profits concentrated in the first quarter. Once the Chinese New Year period ended, growth immediately stalled.
The so-called "doubling" is the result of a low base number combined with two peak season factors, is the daily operation really that strong? No.
Behind this "beautiful report card"
This impressive report card has three notable highlights.
The 89% growth is a mathematical effect resulting from the restatement of accounts at midnight, rather than a genuine operational explosion. With quantity increasing and prices falling, and promotional expenses soaring, growth has been achieved by throwing money at it. The company's cash flow is negative, and second-quarter revenue has turned negative, indicating that channel funds have not truly returned.
So what is Wuliangye doing right now? Squeezing out channel froth, clearing inventory, and defending prices. Recent developments line up with that playbook.
In mid-August, according to Pengpai News, Wuliangye issued a "price limit order" to distributors, stating that the ex-factory price of the eighth-generation Wuliangye cannot be lower than 800 yuan. Previously, the wholesale price had fallen to 730 yuan, which was significantly lower than the distributors' cost of purchasing the product, resulting in losses for distributors. If prices are not maintained, the channel will collapse. New Chairman Deng Min, who took office at the end of June, proposed "five adherences" at the shareholders' meeting, including adhering to the main business and not blindly expanding into other fields, and adhering to mutual benefit and not seeking short-term gains. The company is also quietly laying out its fruit wine business, attempting to appeal to young people.