Shede Spirits Profit Plummets 35.5% as Premium Sales Falter

Premium Liquor Sales Tumble 23.8%, Erasing Profits

Shede Spirits reported a significant financial decline in 2025, with annual revenue falling 17.51% to 4.419 billion yuan. The impact on profitability was more severe, as net profit attributable to shareholders collapsed by 35.51% to just 223 million yuan. The company's performance deteriorated sharply throughout the year, beginning with a 3.46 billion yuan profit in the first quarter before culminating in a 249 million yuan net loss in the fourth quarter.

The core driver of the profit erosion was the underperformance of its most important product segment. Revenue from mid-to-high-end liquors, including its flagship "Wisdom Shede" and "Taste Shede" brands, fell 23.83% to 3.12 billion yuan. A modest 5.75% sales increase in its lower-margin ordinary spirits was insufficient to compensate for the decline in its premium portfolio, exposing a critical flaw in its product mix strategy.

Shede Signals Confidence With 45.7% Payout Despite Missed Targets

The full-year results fell dramatically short of the company's internal goals. Shede achieved only 68.7% of its 6.428 billion yuan revenue target and a mere 24.4% of its 913 million yuan net profit target set for its equity incentive plan. This performance was coupled with significant channel disruption, as wholesale and agent-based revenue declined 25.19% and the company saw a net reduction of 138 distributors. The resignation of Vice President Wang Yong shortly before the report's release added to market concerns over management stability.

Despite the operational and financial headwinds, Shede's board proposed a dividend of 3.1 yuan per 10 shares. This distribution totals approximately 102 million yuan, representing a substantial 45.67% of its annual net profit and signaling an attempt to maintain shareholder confidence. The company plans to continue its "Old Liquor Strategy," focusing on a dual-brand approach for premium and mass-market segments. However, with sales declining across both its home province (-20.19%) and external markets (-19.25%), the strategy of trying to capture both high-end and volume markets simultaneously faces immense pressure in an increasingly competitive industry.