Shede Spirits' resilient growth toward 2025: Lean operations as a foundation, channel innovation for added efficiency, and continuous improvement in operational quality

In 2025, the liquor industry enters a deep adjustment period, with weak demand, channel destocking, and price pressure. Consumption differentiation and competition for existing market share continue to intensify. Against this backdrop, Shendao Liquor (600702.SH) steadfastly implements strategies focused on aged liquor, a multi-brand matrix, youthfulness, and internationalization, with a core operational focus on stabilizing prices, controlling inventory, and boosting sales. Through three drivers—improving operational quality, renewing channels, and elevating brand presence—coupled with a series of precise measures such as lean cost control, optimizing product structure, and transforming all channels, the company drives continuous improvement in operational quality.

In 2025, Shendao Liquor achieved operating revenue of 4.419 billion yuan and a net profit attributable to shareholders of 223 million yuan, clearly demonstrating a stable bottoming out of operations. Cash flow and profitability steadily recover, showcasing strong resilience and long-term value that traverses economic cycles, providing a vivid example for high-quality development during the industry’s adjustment period.

Multiple indicators warm up, operational foundation continues to solidify

Annual report data shows that Shendao Liquor achieved operating revenue of 4.419 billion yuan in 2025, with a net profit attributable to shareholders of 223 million yuan. The declines in revenue and net profit attributable to shareholders have significantly narrowed compared to the previous year, demonstrating a steady bottoming out in operations and showing a stable foundation that can withstand economic cycles.

At the same time, the company’s financial structure continues to optimize, with safety margins steadily increasing. By the end of 2025, Shendao Liquor’s total assets reached 12.615 billion yuan, a year-on-year increase of 6.89%; the net assets attributable to shareholders of the listed company were 6.887 billion yuan, maintaining steady growth. Cost control has shown significant effectiveness, with selling expenses and administrative expenses decreasing by 12.39% and 10.68% year-on-year, respectively. Lean operations and cost reduction have created space for profit recovery.

By the end of 2025, the net cash flow from operating activities of Shendao Liquor narrowed by 26.08% year-on-year, indicating a significant improvement in cash flow, effectively alleviating capital turnover pressure and enhancing risk resistance.

Zhongshang Securities noted that in terms of shareholder returns, Shendao Liquor plans to distribute a cash dividend of 3.1 yuan (before tax) for every 10 shares based on the total share capital minus repurchased treasury shares, totaling approximately 102 million yuan, with cash dividends accounting for 45.67% of net profit attributable to shareholders.

Even during the industry adjustment period, Shendao Liquor maintains a stable dividend policy, reflecting its strong confidence in its own development and providing investors with continuous and reliable returns.

Dual-driven by channels and products, new engines accelerate formation

In terms of product structure, Shendao Liquor presents a positive pattern of “high-end stability and mass growth.” In 2025, the liquor business achieved revenue of 3.853 billion yuan, with a gross margin of 67.67%, maintaining a high level within the industry.

Among this, mid- to high-end liquors contributed 3.12 billion yuan in revenue, serving as the core profit pillar for the company; ordinary liquors grew against the trend by 5.75% to 733 million yuan, with popular items like T68 strong sales, becoming an important “stabilizer” against cyclical fluctuations. The dual-brand price coverage is complete, with high and low-end coordination effectively hedging industry volatility, making the overall product structure more resilient.

On the channel side, Shendao Liquor has made significant progress in reforms, with new growth engines accelerating formation. The company focuses on key markets and bases, intensifying efforts to optimize distributors by streamlining and eliminating inefficient and overlapping distributors, thus upgrading the channel structure toward a more efficient and focused direction, resulting in a reduction in the number of distributors compared to the previous year. Traditional wholesale and agency channels actively control inventory and stabilize prices, laying the groundwork for a healthy industry recovery; the e-commerce channel performed exceptionally well, with sales revenue of 604 million yuan in 2025, a year-on-year increase of 35.46%, becoming the biggest highlight of the year. The company builds a coordinated omni-channel system through refined operations, creating popular products, and expanding private domain and instant retail, while continuously exploring group buying, KA, and catering as diverse endpoints, comprehensively upgrading the C-end operational capacity and channel control.

Moreover, Shendao Liquor’s product innovation precisely breaks boundaries, with youthfulness and scenario-based strategies yielding results. The company adheres to the quality advantage of aged liquor while also launching the industry’s first low-alcohol, easy-drinking aged liquor “Shendao Zizai” and blind box mini-liquors “Mashang You Shendao” in line with consumer trends, precisely targeting young consumers and light drinking scenarios, breaking the traditional understanding of liquor.

In terms of market layout, Shendao Liquor is advancing on two fronts: meticulous cultivation in the domestic market and a revenue share of 68.69% from the overseas market, with national layout steadily deepening. The annual report indicates that Shendao Liquor’s products have entered 42 countries and regions and nearly 100 duty-free stores, accelerating the overseas promotion of aged liquor culture and Eastern aesthetics. The internationalization strategy has transitioned from the layout phase to the harvest phase, with the long-term growth ceiling expected to rise.

Zhongshang Securities noted that quality barriers continue to solidify, and industry influence is steadily rising. The three core advantages of ecological brewing, aged liquor reserves, and intangible cultural heritage craftsmanship are irreplaceable. Shendao Liquor collaborates with industry organizations to establish group standards, continuously strengthening its research capabilities and quality influence; products such as 10-Year Shendao and T68 have won multiple international awards, gaining recognition in the global market.

Brand value continues to ascend, clear strategic determination safeguards progress

In brand building, Shendao Liquor has a clear strategy and firm steps.

In 2025, Shendao Liquor, with the core theme “This era needs Shendao,” collaborates with central media and authoritative platforms to create brand events, launching the promotional video “Because It’s Worth It,” deeply binding Shendao wisdom with contemporary spirit, eliciting widespread emotional resonance. At the same time, it continues to deepen the “Shendao Wisdom Figures” IP, constantly reinforcing its recognition as the leading brand in aged liquor. The “Shendao Aged Liquor Festival” has entered more overseas markets, with Tuo brand’s intangible cultural heritage skills showcased at UNESCO headquarters, further enhancing brand influence.

As a benchmark for ecological brewing in the industry, Shendao Liquor boasts a 6.5 square kilometer ecological brewing industrial park, with aged liquor reserves ranking among the top in the industry, laying an irreplaceable resource advantage for long-term development. The company’s R&D investment in 2025 exceeded 82 million yuan, guarding the quality baseline through technological innovation and leading product upgrades, with the value of aged liquor continuously re-recognized by the market.

Orderly advancement of production expansion, future development momentum accumulates

Looking to the future, Shendao Liquor continues to advance production expansion, promoting the intelligent upgrade and transformation of its production system, and perfecting the ecological industrial chain to lay a solid foundation for enhancing the quality and ensuring capacity of aged liquor. Relevant phased investments will gradually show results in the future, further releasing development potential and providing solid support for high-quality growth.

At this critical juncture of a new round of industry differentiation, Shendao Liquor’s 2025 report not only reflects a steady response to cyclical adjustments but also an active evolution under long-term strategy. The narrowing decline in performance, rapid growth in e-commerce, the rise of ordinary liquors against the trend, and the ascent of brand value—these multiple positive signals resonate, outlining a curve of operational recovery.

Zhongshang Securities noted that regarding the current state of the industry, Shendao Liquor pointed out in its annual report that the short-term demand for liquor is currently below expectations, consumption is gradually entering a rational era, and there is a clear trend of price differentiation. The industry is facing intensified squeeze-based competition for existing market shares, with market share accelerating toward advantageous production areas, enterprises, and brands. Liquor companies need to innovate and break through from multiple dimensions such as category innovation, brand building, market marketing, and cultural communication to maintain vitality and advantages in fierce competition.

Looking ahead to 2026, Shendao Liquor will maintain strategic determination, insisting on the aged liquor strategy as the cornerstone, promoting the multi-brand matrix strategy, youthfulness strategy, and internationalization strategy to advance simultaneously, while continuously evolving. The company will continue to implement intelligent upgrades to the production system, continuously improve the ecological industrial chain, and enhance the quality of aged liquor; it will continue to focus on key tasks and themes such as “FC2M, ecology, scientific innovation, FES, Eastern lifestyle aesthetics,” and “strengthening the foundation, breaking the situation, and starting anew,” steadily moving toward a new journey of high-quality development.