Deepening the "old wine" moat, Shede Spirits "accumulates resources" to迎接 a new cycle

Ask AI · How can the old liquor reserves of Shede lay the groundwork for the industry’s recovery in 2026?

Anta’s revenue breaks 80 billion yuan

A-share markets are once again seeing mindless, frantic speculative buying

Source丨Deep Blue Finance

Written by丨Yang Bo

For China’s baijiu industry, 2025 was an exceptionally challenging year. It is an objective fact that the high-end and upper-mid baijiu markets were collectively under pressure, and the industry entered a period of deep adjustment.

Amid cyclical fluctuations, most liquor companies choose to “shrink their front lines and win while minimizing losses,” and passive defense has become the mainstream approach. But as one of Sichuan liquor’s “Six Golden Flowers,” Shede Liquor has shown strategic steadiness of “not following the trend, looking long term,” delivering results that are better than the industry’s overall level.

The annual report shows that by leveraging “old liquor” as its core strategy, Shede Liquor’s year-on-year declines in revenue and net profit in 2025 narrowed significantly, demonstrating sustained operational resilience. The company achieved operating revenue of 4.419 billion yuan and attributable net profit of 223 million yuan, maintaining positive profitability. Operating cash flow from operating activities increased 26.08% year on year, and the operating foundation was further repaired. During the industry adjustment period, Shede Liquor provides an invaluable positive example for upper-mid-tier baijiu companies.

1

Deep industry adjustment,

Shede maintains resilience in adversity

Baijiu market pressure in 2025 was significant. A mid-year research report on the 2025 China baijiu market jointly released by the China Alcoholic Drinks Association and KPMG shows that in the first half of 2025, in the 800–1,500 yuan price range, product prices were clearly inverted; in the 500–800 yuan range, products faced greater survival pressure. The market’s mainstream consumption price bands have shifted downward from the previous 300–500 yuan to 100–300 yuan. Under such industry conditions, the upper-mid market generally faced pressure, yet Shede Liquor demonstrated strong anti-cycle capability.

On the product side, Shede Liquor achieved a “stabilize high-end, grow the mainstream” virtuous pattern. In the mid-to-high-end market, the company has solidified the market position of its core large single product, “Pinhui Shede,” and also focused on building a high-end value benchmark, “Cangpin Shede 10 Years.” During the year, the product won multiple honors including a gold medal at the International Spirits Challenge. Growth highlights were concentrated in the mainstream consumption track. Revenue from ordinary liquor sales reached 733 million yuan, up 5.75% year on year. Large single products such as Tuopai Teji T68 and Tuopai Qujiu performed strongly in sell-through, becoming an important stabilizer of performance.

In terms of channel layout, in 2025 Shede Liquor continued to deepen its full-channel strategy, focusing on its base areas and key markets while optimizing its distributor system. Although the total number of distributors was reduced, the structure became more efficient, with further focus on base areas and key markets. In addition, offline KA channels added tens of thousands of new stores, further expanding the brand’s reach. Particularly impressive is the explosive growth in the e-commerce channel—full-year e-commerce sales revenue reached 604 million yuan, up 35.46% year on year, rebuilding an online growth engine and adding a “new engine” to the company’s future development.

In cost reduction and efficiency improvement, Shede Liquor promoted more refined operations. The financial reports show that in 2025, the company’s selling expenses were 1.140 billion yuan, down 10.68% year on year; management expenses were 478 million yuan, down 12.39%. Through leadership rotation and organizational optimization, Shede not only strengthened organizational resilience, but also provided support for the steady implementation of its old liquor strategy.

In addition, Shede Liquor has consistently prioritized shareholder returns. In recent years, its dividend payout ratio has continued to rise. In 2022, the dividend payment ratio was 29.65%; in 2023, it was 40.22%; in 2024, it was 40.91%, showing a steady year-by-year upward trend. After the 2025 financial report was released, the company’s dividend payout ratio increased further to 45.67%. Cash dividends of 3.10 yuan are paid for every 10 shares (including tax). This demonstrates, through real actions, its long-term commitment to shareholders.

2

The “old liquor strategy” advances in depth,

and phased results continue to be released

Shede Liquor’s “old liquor strategy” has always been its core moat for crossing cycles. As of the end of 2025, Shede Liquor’s inventories were 5.904 billion yuan, mainly consisting of high-quality base liquor and old liquor reserves. In fact, these old liquors are not accumulated overnight. Since 1976, Shede Liquor has persisted in storing high-quality base liquor, and decades of accumulation have formed a quality barrier that is hard to replicate. Baijiu has no shelf-life constraints; the longer it is stored, the more the liquor’s flavor and value increase. These old liquors have become the core assets underpinning Shede Liquor’s long-term competitiveness.

At present, Shede Liquor continues to pursue appropriate increases in production capacity and expansion. First, it meets requirements for future business development and provides capacity guarantees. Second, it strengthens the core moat of the old liquor strategy, ensuring the needs of blending old liquor across the full product range. Third, it takes the opportunity of the industry trend toward consolidation into leading enterprises, aiming to capture more market share.

This strategy is akin to the strategic wisdom of “build high walls, accumulate grain widely, and wait to claim the king.” “Build high walls” means steadily deepening the “old liquor strategy” to solidify consumers’ mindset that “Shede = old liquor.” “Accumulate grain widely” means storing jars of old liquor that become even more precious as time passes; these high-quality base liquors will become the core weapons for future market competition. “Wait to claim the king” means calmly waiting for a rebound in market conditions, and then leveraging years of accumulation to deliver results at the right moment, creating greater market value.

In plain terms, Shede Liquor is doing “difficult but correct things” in the industry downturn. By holding steady now and not shrinking to follow the crowd, it is preparing for a breakthrough that will be remembered.

Actually, we can also see the quality of the old liquor strategy from another perspective.

Today, the “youngification” of baijiu has become a question that liquor companies must answer. Encouragingly, relying on the confidence provided by the old liquor strategy, Shede Liquor has a distinct “dimensional advantage” in the young consumer market. For example, the company has created a new 29-degree low-proof, drink-as-you-like old liquor product, “Shede Zizi.” Using real-year jar-stored old liquor aged over 6 years as the base liquor, it adds flavor-enhancing seasoning using 20-year and 30-year old liquor. The liquor has a rich, mellow, and gentle character, and it is highly favored by young consumers. When the product had its presale on JD.com, it even achieved standout results: more than 20,000 people added it to carts in 24 hours, and orders exceeded 12,000 within 36 hours.

Since the implementation of the “old liquor strategy,” Shede Liquor has delivered remarkable results across multiple dimensions including brand value, product innovation, and ESG performance. On the brand side, according to the 2025 “China’s Top 500 Most Valuable Brands” report, the “Shede” brand value reached 110.872 billion yuan, while the “Tuopai” brand value was 79.826 billion yuan. On the product side, “Shede Zizi,” after being launched in 2025, won seven awards within its first four months on the market; core products such as “Cangpin Shede 10 Years” also received international gold awards. In terms of ESG, Shede Liquor’s S&P ESG score in 2025 surged 73% year on year, and it was recognized with multiple honors including “Guoxin Cup · ESG Bull Award” and “2025 China Enterprise ESG Top 100,” among others.

3

Conclusion

Overall, in 2025 Shede Liquor steadied its operational base during the industry downturn. With narrowed declines, optimized distributor structure, momentum from emerging growth engines, and improved shareholder returns, it has laid a solid foundation for high-quality development in 2026.

Looking ahead to this year, market expectations for baijiu consumption are generally better than last year. Goldman Sachs, in its “2026 Outlook for China’s Consumer Staples Industry,” noted that as the impact of policy effects gradually weakens, the baijiu industry in the second half of 2026 is expected to recover sequentially. A research report released by China CITIC Securities at the beginning of the year also clearly stated that the trend of a gradual recovery in the baijiu industry this year is becoming clear. Even Everbright Securities’ latest March research report mentioned that the period of clearing channel risks is gradually nearing its end.

Based on comprehensive judgments from multiple sources, the baijiu industry in 2026 is expected to achieve a substantive stabilization!

Shede Liquor has also indicated that during the Spring Festival period, the company’s series products grew strongly, terminal inventory destocking accelerated, and bottle-opening rates maintained double-digit growth, successfully delivering a strong “opening to the new year.” It can be expected that, driven continuously by the “old liquor strategy” as a main line and supported by multiple factors such as ongoing optimization of product structure and improvements in channel layout, Shede Liquor’s performance this year is worth anticipating.