Shede Spirits' revenue and net profit both decline, with 516 distributors退出

How does the product structure change at Shede Spirits affect overall profitability?

Amid deep adjustments in the Baijiu industry, Shede Spirits reported a decline in both revenue and net profit for 2025. The financial report released on the evening of March 20 shows that the company achieved revenue of 4.419 billion yuan in 2025, down 17.51% year-over-year; net profit attributable to the parent was 223 million yuan, down 35.51%.

This marks the second consecutive year of significant performance pressure for Shede Spirits. Following a sharp 80.46% drop in net profit in 2024, its profitability continued to shrink in 2025. Accompanying the performance decline is ongoing turbulence in distribution channels. During the reporting period, Shede Spirits saw 516 distributors exit, a net reduction of 138 distributors for the year; simultaneously, revenue from both domestic and international markets also experienced double-digit declines for two consecutive years.

In terms of product structure, mid-to-high-end products represented by “Smart Shede” and “Taste Shede” saw double-digit declines in production, sales volume, and revenue. Conversely, the “Tuopai T68” standard liquor defied the trend and grew against the market, becoming one of the few growth segments in the financial report. However, the gross profit margin of standard liquor at 37.92% is far lower than the 74.67% of mid-to-high-end products. This structure directly caused the company’s overall gross profit margin to slide from 77.81% in 2021 to 62.04% in 2025.

Faced with obstacles in high-end development and channel pressures, Shede Spirits’ “Old Liquor Strategy” is under severe test in an era of stock competition.

Revenue and profit both decline

As one of the “Six Flowers of Sichuan Liquor,” Shede Spirits’ pressure during industry adjustments is evident.

In 2025, the company’s revenue was 4.419 billion yuan, a 17.51% decrease from 5.357 billion yuan in the previous year. On the profit side, net profit attributable to the parent was 223 million yuan, down 35.51%; net profit excluding non-recurring gains and losses fell even more sharply by 50.31%.

Quarterly, Shede Spirits’ performance showed a “cooling trend” each season. In Q1 2025, net profit was 346 million yuan, but by Q3, it had plummeted to 28.73 million yuan. During the traditional peak season in Q4, the company recorded a net loss of 249 million yuan. This rare large quarterly loss directly dragged down the full-year results.

In the initial 2025 restricted stock incentive plan, Shede Spirits set ambitious targets: revenue to grow 20% year-over-year to 6.428 billion yuan, and net profit attributable to the parent to increase 164% to 913 million yuan. The actual achievement rates were only 68.7% and 24.4%, respectively, showing a significant gap from expectations.

The decline in performance is most visibly reflected in product structure. For a long time, Shede Spirits has pursued an “Old Liquor Strategy,” aiming to leverage the “Shede” brand to command premiums in the sub-premium and above markets. However, in 2025, sales revenue of mid-to-high-end Baijiu (including “Smart Shede,” “Taste Shede,” “Collection Shede,” etc.) totaled 3.12 billion yuan, a sharp drop of 23.83%. Production and sales volume also declined, with high-end products facing substantial market resistance.

Simultaneously, channel turbulence intensified. In 2025, wholesale agency revenue was 3.249 billion yuan, down 25.19%. The number of distributors saw 378 new additions but 516 exits, resulting in a net decrease of 138 distributors for the year. By the end of 2025, Shede Spirits had 2,525 distributors. Compared to 2024, which saw 420 new and 412 exits (net increase of 8), the increased exits and net decline highlight distributors’ cautious stance amid inventory pressures and limited profit margins.

In terms of regional layout, Shede Spirits has been trying to solidify its Sichuan base while expanding nationwide, focusing on traditional strongholds like Sichuan, Hebei, Shandong, Henan, and Northeast China. However, financial data shows both domestic and international markets have contracted for two consecutive years. In 2024, revenue in Sichuan fell 19.72%, and outside Sichuan by 30.03%. In 2025, declines persisted with 20.19% and 19.25% drops respectively. The loss of core markets and external expansion obstacles have limited the company’s overall growth momentum.

A relatively bright spot in the financials is e-commerce. In 2025, online sales reached 604 million yuan, up 35.46%. However, in the Baijiu industry—especially for mid-to-high-end products—consumption still heavily relies on offline business banquets, group buying, and social gifting, so online growth alone cannot offset the significant gaps left by traditional offline channels.

Tuopai T68 as a strategic flagship

While overall revenue, mid-to-high-end liquor income, and offline channel revenue declined, Shede Spirits’ standard liquor segment showed counter-trend growth.

Data indicates that in 2025, sales revenue from standard liquor (mainly brands like Tuopai T68 and Tuopai Six Grain) reached 730 million yuan, an increase of 5.75%. This became the only bright spot in Shede Spirits’ product lineup.

This product structure reflects current consumer realities in the Baijiu market. Under macroeconomic changes and increasing rationality, the industry has entered a “stock competition” with squeezed margins. The contraction of business consumption scenes directly suppresses high-end and premium Baijiu sales, while mass banquet and daily drinking markets demonstrate stronger resilience.

Shede Spirits has built a dual-brand matrix with “Shede” and “Tuopai,” aiming to position “Shede” as the leading old liquor brand and to promote “Tuopai” as a popular brand for mass consumers. In practice, the cost-effective Tuopai T68 has become the core product to meet mass demand.

Initially priced around 68 yuan, T68’s actual market transaction price has long stabilized around 50 yuan. In the sub-100-yuan bottled liquor market, T68 faces fierce competition from brands like Fenjiu, Luhe, and JianZhuang. With a heritage as a “Chinese famous liquor” and positive feedback on its taste, T68 has built a reputation among daily drinkers.

However, the sales growth of standard liquor has limited impact on overall profitability, and in some cases, even dragged down profit margins.

Looking at gross profit margins, the industry’s profitability hinges on premium pricing of high-end products. In 2025, gross margin for mid-to-high-end Baijiu was 74.67%, while for standard liquor it was only 37.92%. The nearly 37 percentage point gap illustrates the structural challenge.

As high-end sales declined sharply by 23.83% and gross margins remained thin, the increase in standard liquor sales (up 5.75%) could not compensate for the overall margin decline. Financial data shows that Shede Spirits’ overall gross profit margin has been declining steadily, from a peak of 77.81% in 2021 to 62.04% in 2025.

The strategy for standard liquor has also attracted market attention. Market feedback indicates that Tuopai T68, originally priced affordably and well-regarded, has recently been raised in retail price to over 60 yuan. The product’s standard has shifted from the geographic standard (GB/T 21820) to an enterprise standard (Q/SDJ 0002S). In a highly competitive low-end market, this price increase and standard change could influence consumer perceptions of value.

Shede Spirits also mentioned a new product launched last year—“Shede Zizai” at 29 degrees. Aimed at the low-alcohol segment, it competes with strong performers like Wuliangye 29° “Yijian Qingxin.” However, current e-commerce data and market feedback suggest “Shede Zizai” has yet to gain significant traction or sales scale.

Under the “Old Liquor Strategy,” Shede Spirits possesses high-quality base liquor reserves and the brand assets of “Tuopai” and “Shede.” Yet, in the current inventory reduction cycle, the company faces the challenge of balancing “high-end premiums” with “mass volume.” Poor sales of mid-to-high-end products have sharply squeezed profits, while growth in standard liquor is limited by thin margins. Additionally, management changes increase strategic uncertainty. How to effectively balance high-end branding with capturing the mass market will be a key question for Shede Spirits in 2026.