Proactive adjustments are showing results, with institutions increasing holdings combined with high dividend payouts, Shede Spirits' operations stabilize, signaling value realization.

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After the market closed on March 20, Tuoshe Liquor Industry (600702.SH) released its 2025 annual report. During the reporting period, the company achieved operating revenue of 4.42B yuan, and net profit attributable to shareholders of listed companies of 223 million yuan. Both revenue and net profit saw year-on-year declines that narrowed significantly. At the same time, the company disclosed an announcement of its 2025 profit distribution plan, proposing to pay a cash dividend of 3.10 yuan for every 10 shares (tax included), for a total planned cash dividend of 102 million yuan, accounting for 45.67% of the net profit attributable to shareholders of listed companies for the current period. Through continued and stable dividend measures, the company will effectively give back to investors.

In 2025, due to factors including weak end-consumer demand, digestion of channel inventory, and adjustments to price lists amid price fluctuations, baijiu-listed liquor enterprises generally faced growth pressure. Against this industry backdrop, Tuoshe Liquor Industry’s operations gradually stabilized, with core annual report indicators showing marginal improvement. It is evident that the company is driving steady restoration of operating quality through sound channel adjustments, product structure optimization, and expense-and-efficiency controls. Meanwhile, the company’s sustainable development capability was recognized by an internationally authoritative institution, with its S&P ESG score rising dramatically by 73% year-on-year.

E-commerce grows rapidly; mass-market liquor stays on a steady track

Improving management quality and efficiency, with the fundamentals of operations continuing to improve

As adjustments in the baijiu industry continue to go deeper, enterprises are increasingly tested on strategic resolve and operating tactics. Data from Tuoshe Liquor Industry’s 2025 financial report show that amid cyclical fluctuations, the company’s operating direction has remained clear, with core positioning landing effectively. Positive changes on the business front provide effective support for the fundamentals’ ongoing improvement.

First, anchor the core strategy of aging liquor and make forward-looking investments to build long-term competitiveness. The company is deeply cultivating a differentiated segment for aging liquor and is advancing its capacity expansion project in an orderly manner. Although phased investment in the project creates some short-term disturbances to net cash flow from operating activities for the current period, long-term value will be gradually released. Financial report data show that this indicator has already improved significantly year-on-year. As of the end of the reporting period, the company’s total assets increased to 12.62B yuan. Both asset scale and production capacity layout have been upgraded, laying a solid foundation for the company to get through the cycle.

Second, deepen the full-channel layout and build new growth momentum through internal and external coordination. The company focuses on base areas and key markets, increases efforts to optimize distributors, and upgrades the channel structure toward a more efficient and more focused direction by sorting through, eliminating low-efficiency distributors, and removing overlapping distributors. As a result, the number of distributors has been trimmed compared with the previous year. At the same time, the company actively expands emerging channels such as e-commerce, key-account customers (要客), private domains, and KA. During the reporting period, the e-commerce channel achieved sales revenue of 604 million yuan, up 35.46% year-on-year. The number of KA retail stores added more than 10,000, with the channel coverage capability continuing to improve. In addition, with full empowerment from the Fosun ecosystem, in 2025 Tuoshe Liquor steadily expanded into overseas markets. Its international business covers 42 countries and regions worldwide, among which the Southeast Asia market achieved strong year-on-year growth in both sales revenue and terminal sell-through.

Third, optimize the product matrix structure, opening up new consumption tracks with low-alcohol aging liquor. Facing intensifying competition in mid-to-high-end markets, the company anchors a high-end value benchmark with “Sincere Collection Tuoshe 10 Years,” continues to reduce inventory, and stabilizes the core single product “Taste Tuoshe” price list. Meanwhile, the company seizes opportunities for market recovery among mass consumers. The flagship strategic single product “TuoPai Special Grade T68” maintained rapid growth in sell-through, bottle opening, and shelf placement. Sales of “Tuoshe Celebration” doubled. Both sell-through and bottle-opening for “Tuoshe’s Way” grew strongly. The financial report shows that in 2025, the company’s ordinary liquor sales revenue reached 733 million yuan, up 5.75% year-on-year. In addition, the company moved early to capture a new consumption track of lower-alcohol and younger positioning, launching the industry’s first low-alcohol, pour-and-drink type of aging liquor “Tuoshe Zizai.” Within 4 months of launch, it won 7 awards, and it has been rolled out to over 1,000 network outlets, successfully opening up space for new incremental growth.

Fourth, strictly control expense-to-efficiency and allocate resources with precision to enhance operational resilience. In 2025, the company strengthened full-process management of its operating plan, driving marketing resources to tilt toward core products, channels, and markets. At the same time, it launched a cost-reduction and efficiency-improvement campaign to promote a shift toward more refined operations, further reducing management expenses and improving operational efficiency. The financial report shows that management expenses during the reporting period decreased 12.39% year-on-year. In addition, relying on a more complete organizational management system and a mature talent pipeline, the company continuously strengthens organizational resilience. During the orderly and natural iteration of some cadres and talents, with the help of a sound governance mechanism, the company effectively ensures stable operations without being affected. And thanks to the long-term stability of the core management team, there is strong protection for the continuation of core directions such as the aging liquor strategy.

Liquor analyst Cai Xuefei said that, judging from the already disclosed performance forecasts of baijiu-listed companies, Tuoshe Liquor’s performance is better than the overall industry level. Facing phased challenges in the industry, the company will, relying on tools such as its nationwide layout, improved management quality and efficiency, production capacity layout across full price segments, and innovative marketing, keep its operating indicators in the top ranks of the industry for the long term. As early as 2024, Tuoshe Liquor had proactively adjusted a complete set of pragmatic operating strategies, which will give it a first-mover advantage and system-level advantage in the coming period of intensified competition in baijiu.

Channel inventory reduction shows results; institutional capital keeps adding to positions

Proactive adjustment gradually reaches its end; the turning point is established

Keeping the same steady and clear operating cadence as 2025, at the start of 2026, Tuoshe Liquor launches a set of “boosting momentum through sell-through, boosting brand strength, upgrading tier levels of customer circles, and improving efficiency through categories,” laying a foundation for full-year development.

Around the Spring Festival consumption window, Tuoshe Liquor focuses on key markets and mainstay single products, with early deployment to drive strong growth in sell-through of a series of products. The pace of reducing terminal inventory accelerates, and the bottle-opening rate maintains double-digit growth, successfully achieving a strong start for the Spring Festival. During the Spring Sugar and Wine Fair, besides integrating high-energized media communication resources and accurately connecting nationwide merchants through supporting activities, Tuoshe Liquor also held a major event: the Fifth Annual Aging Liquor Festival. Through diversified scenarios such as the Spring Fermentation and Sealing Ceremony, the Aging Liquor Carnival, and “Night of Zizai,” the company further reinforces recognition of the category value of aging liquor and solidifies long-term operating confidence among channel partners. Leveraging resources from the Fosun ecosystem for full empowerment, Tuoshe, under a dual identity of “strategic cooperation partner” and “the sole designated baijiu,” deeply participates in the 2026 All-China Entrepreneur Forum annual meeting in Yabuli, effectively reaching top-tier entrepreneurs’ circles. In addition, in 2026, Tuoshe Liquor will comprehensively empower the brand development of Night Lang Gu. It will build its differentiated core competitiveness with high-quality and good-value year-aged aging liquor, injecting long-lasting momentum into the company’s overall performance growth.

From sell-through efforts during the strong start season, to the continuous enhancement of brand momentum, and then to the long-term category matrix layout, Tuoshe Liquor continues its proactive and pragmatic strategic thinking, constantly strengthening endogenous operating resilience. In this regard, multiple brokerages have offered positive assessments and confirmations: Tuoshe Liquor’s proactive adjustments are already showing results, and the process of clearing channel inventory is gradually nearing its end.

Among them, CMB Securities stated in its research report: “The baijiu industry is still in a deep adjustment period. Tuoshe Liquor is striving forward, promoting distributors to reduce inventory and strengthening sell-through. When mid-to-high-end products face challenges of volume contraction and intensifying competition pressure, the company also proactively expands mass-market priced products.” Haitong Securities maintains a “Buy” rating for Tuoshe Liquor and expects that the rebound in business demand will drive the company’s performance to keep improving. Meanwhile, the research report also pointed out: “The company is seeking truth from facts. Over the past two years, it has mainly focused on long-term channel health and actively reduced inventory. The current adjustment has entered the second half.”

The changes in holdings by secondary-market institutional capital also provide solid funding-based evidence for the above views. As of the end of 2025, the list of the top ten circulating shareholders of Tuoshe Liquor Industry shows that the Penghua CSI Liquor Index Securities Investment Fund has newly entered the list. The Penghua CSI Liquor Trading-Open-Ended Index Securities Investment Fund continues to increase its holdings, reflecting institutions’ firm confidence in the company’s value.

Although there are many uncertainties in the macro environment, Tuoshe Liquor has always attached great importance to shareholder returns, continuously increasing the dividend level and using real cash to protect the legitimate rights and interests of all shareholders. According to the company’s announcement of its 2025 profit distribution plan, the company will pay a cash dividend of 3.10 yuan for every 10 shares (tax included), totaling 102 million yuan in cash dividends, accounting for 45.67% of the net profit attributable to shareholders of listed companies for the current period. This move not only confirms the robustness of the company’s cash flow situation, but also conveys firm confidence and ample backing for long-term future development.

(This article is for reference only and does not constitute investment advice.)

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