# First Loss in 10 Years, Stock Price Down 80%! What Happened to Hunan Liquor's Only A-Share Darling That Once "Multiplied Tenfold in a Year"

Can AI · Cheng Jun’s return reverse the loss situation through genuine sales growth?

On October 17, 2025, the 23rd China International Alcoholic Beverages Expo was held at Wuhan International Expo Center, with Jiugui Liquor staff dressed in Xiangxi minority costumes at the booth. Photo source: Visual China

Text | Wen Shijun

Editor | Sun Chunfang

Produced by | Prism · Tencent Xiaoman Studio

The mountains of Jishou in Xiangxi remain somewhat cold, and a performance forecast arriving before the warmth is even more chilling.

“Xiangsui A-share’s only survivor,” Jiugui Liquor (000799.SZ), released its 2025 performance forecast showing a net profit after non-recurring gains and losses loss ceiling of 43 million yuan, with a maximum year-over-year decline of 1227.2%.

Once a dark horse in the capital market, Jiugui Liquor, which soared tenfold in stock price in one year, recorded its first annual loss since 2015, after 10 profitable fiscal years.

On March 20, the stock price opened below 45 yuan per share, less than one-fifth of the peak of 251.22 yuan per share reached in September 2021.

Coincidentally, just over ten days after the release of that astonishingly steep forecast, Jiugui Liquor disclosed two more related-party transaction notices: expected total related-party transactions in 2026 will reach 69.35 million yuan, while the actual amount in 2025 was fixed at 65.89 million yuan.

These are routine intra-group transaction data, but the related party is not an outsider—it is the actual controller of Jiugui Liquor, COFCO Group.

Expected Shock Therapy

In this deep adjustment phase of the current Baijiu cycle, sharp declines in performance are not uncommon. Since 2026, many listed Baijiu companies have announced profit reductions: Kweichow Moutai’s net profit shrank by up to 60%, Yanghe shares fell over 70%… When Shunxin Agriculture, the parent of Nulaowan, announced a decline of over 180%, the market was already in shock.

But what truly shocked the market was its person—Jiugui Liquor, with such a nearly vertical decline, leading the way in this round of industry cleanup.

This steep drop largely stems from its already extremely fragile financial base. Looking back to 2024, Jiugui Liquor was barely maintaining a decent financial report—this company, which once earned over 1 billion yuan annually at its peak, recorded only 3.8149 million yuan in net profit after non-recurring gains and losses that period. Millions of yuan in funds are even less than a single leading liquor company’s annual advertising expenditure in some cities, just to maintain profitability.

The industry-wide pressure in 2025 was even greater. Moreover, on the small base of 2024, any provision, channel subsidy, or sales stagnation in 2025 would be magnified in percentage terms.

Ultimately, the 43 million yuan annual loss in 2025, compared to the nearly “naked” profit base of 2024, appears as a 1227.2% financial shock therapy.

Jiugui Liquor explained the projected loss for 2025: weak demand for high-end and mid-high-end Baijiu, with core products “Neican” and “Jiugui” series suffering simultaneous declines in sales volume and prices, leading to continuous revenue shrinkage.

Under the high-pressure environment of industry downturn, Jiugui Liquor fell into a typical prisoner’s dilemma: to resolve high channel inventory and inverted prices, it had to continue investing in marketing, subsidies, and channel development. Jiugui Liquor calls these expenses “rigid costs”—even if revenue drops, these costs cannot be cut too much, because cutting them would lead to even sharper declines.

Moreover, Jiugui Liquor’s sales expense ratio (sales expenses/revenue) has long been high in the industry.

For comparison, Yingjia Tribute Liquor, controlled by Luan Ni Yongpei, the richest man in Lu’an, Anhui, spent about 600-700 million yuan on sales expenses in 2024, roughly the same level as Jiugui Liquor’s investment; but in revenue, Yingjia achieved 7.34 billion yuan, while Jiugui Liquor only 1.42 billion yuan.

In the first three quarters of 2025, Jiugui Liquor’s sales expenses dropped to about 250 million yuan, while Yingjia’s investment was 480 million yuan. In terms of performance, Yingjia’s 480 million yuan expenses generated over 4.5 billion yuan in revenue; Jiugui Liquor, with 250 million yuan in expenses, achieved 760 million yuan in revenue.

Even with reduced sales expenses in the first three quarters of 2025, Jiugui Liquor’s sales expense ratio remained at 33%. Among A-share listed liquor companies, this figure is only lower than the already troubled *ST Yanshi controlled by Haiyin Group, ranking second—while Kweichow Moutai’s sales expense ratio was only 3.5%.

After all, Jiugui Liquor’s three major campaigns in 2025—price defense, core terminal attack, and consumer opening battles—still require spending.

Late Arrivals in Settlement

Success and failure often go hand in hand. Large sales investments once became Jiugui Liquor’s secret weapon. To understand this company’s strong marketing gene, one must look at its origins.

Jiugui Liquor was formerly Jishou Brewing Factory, whose main products were “Xiangquan” Baijiu and “Wulingyuan” beer. But it was clear that these brands, with strong regional attributes and not part of the traditional Chinese famous liquor sequence, were not suitable for nationwide expansion. The solution was to create a new brand.

In the late 1980s, under the guidance of cultural celebrity Huang Yongyu from Xiangxi, the “Jiugui” brand was born.

In the mid-1990s, the Chinese Baijiu industry experienced a watershed capital reform. Shanxi Fenjiu went public in 1994, followed by Tuopai (now Shede Spirits) in 1996.

In 1997, on the 40th anniversary of the Xiangxi Tujia and Miao Autonomous Prefecture, Xiangquan Group (the reform of Jishou Brewing Factory) established Jiugui Liquor Co., Ltd., as the sole initiator, and listed on the Shenzhen Stock Exchange the same year. Originally called Xianggui Liquor (now Jiugui Liquor), it was the first listed company in Xiangxi (and remains the only one), and one of the earliest Baijiu stocks in the A-share market.

In the early 21st century, the Baijiu industry entered a price upgrade wave, and Jiugui Liquor launched a higher-end “Neican” series.

However, this growth path also entailed high costs. Neither Jiugui nor Neican brands are from the national famous liquor sequence, nor do they have inherent brand halo. The nationalization of regional brands is never simply a matter of renaming; after going public, Jiugui Liquor faced rigid performance growth pressures, and its inherent disadvantages had to be compensated through intense marketing investments.

To maintain multi-product, multi-brand channels nationwide and uphold a high-end image, Jiugui Liquor needed continuous brand endorsement and frequent marketing activities.

Undoubtedly, the “high investment, high pricing” model can deliver impressive growth in boom times, but in the current environment of weak demand and falling high-end Baijiu prices, high sales expenses turn from a weapon into a profit-draining black hole—yet this path dependence is hard for Jiugui Liquor to escape.

Furthermore, within COFCO’s system for over a decade, Jiugui Liquor’s management team must follow the group’s consistent management logic—high targets, strong incentives, and strict constraints. As a model of state-owned enterprise reform with rigorous assessment and market-oriented constraints, cadres assigned by COFCO to Jiugui Liquor inevitably face growth pressures.

Once only 503 Yuan Left in the Account

How did Jiugui Liquor transform from a local distillery into a national COFCO-controlled enterprise?

In 2002, due to over-diversification and debt troubles, its parent company Xiangquan Group was taken over by Liu Hong, known as a capital predator, and her “successor” network.

But this “successor” only used Jiugui Liquor as another prey. After taking control, they embezzled 420 million yuan through related-party loans. By 2005, when the case was exposed, Jiugui Liquor’s three accounts had only 503 yuan left.

At the end of 2006, Huafu Group, with a background in domestic trade, and Everwin Pacific controlled by Hong Kong “duty-free shop king” Zheng Yingnan, took over and restructured Jiugui Liquor, bringing it back into the state-owned sector. In 2014, COFCO Group fully merged Huafu, and Jiugui Liquor officially became part of the “from farm to table” full industry chain led by Ning Gao Ning during his tenure at COFCO.

In fact, from Great Wall Wine to acquiring wineries in Chile’s Colchagua Valley and Bordeaux, COFCO has shown a strong interest in alcohol assets.

Its core logic is not simply about upstream and downstream coordination of grains—since in high-end Baijiu’s cost structure, raw grain costs are almost negligible. This can perhaps be seen as a transfer of management genes; one of Ning Gao Ning’s most classic campaigns at China Resources was to push Snow Beer nationwide through acquisitions and channel integration.

Since 2016, Jiugui Liquor’s three chairmen—Jiang Guojin, Wang Hao, Gao Feng—and three general managers—Dong Shugang, Zheng Yi, Cheng Jun—have all come from COFCO’s major shareholders.

Currently, Gao Feng and Cheng Jun, both born in the 1970s, form the leadership team. Gao Feng, the current chairman, joined COFCO in 1996 and is also chairman of COFCO Wine Investment. According to the latest annual report, COFCO Wine Investment and Everwin Pacific, which still hold shares, each owns 50% of Jiugui Liquor’s largest shareholder, Zhonghuang Company.

Jiugui Liquor’s largest shareholder’s ownership is transparent. Photo source: company financial report

Current General Manager Cheng Jun is a veteran of COFCO’s wine business, originating from the Changcheng Grape Wine Yantai base. Over the past five years, his career has oscillated between Changcheng and Jiugui Liquor, serving as deputy general manager and general manager of COFCO Changcheng. At the end of 2024, Cheng Jun returned to Jiugui Liquor as general manager.

Is Performance a Deliberate “Deep Squat”?

Since entering the COFCO era, Jiugui Liquor turned profitable again in 2015 and experienced a rapid growth period around 2021.

The key was the “high-endization” strategy: through heavy marketing investment and frequent price hikes, positioning “Neican” as the “fourth major high-end brand after Moutai, Wuliangye, and Luzhou Laojiao,” aiming to capture consumer mindshare and stimulate channel stocking.

Data is straightforward: in 2020, revenue was 1.826 billion yuan; by 2021, nearly doubled to 3.414 billion yuan; and in 2022, surpassed 4.05 billion yuan. The market’s frenzy over this Baijiu stock at that time was the most direct proof.

After the peak, a decline was inevitable. So the current situation carries some of the bitterness of overextended growth. This is the real challenge Cheng Jun faces upon his return at the end of 2024.

Cheng Jun aims to rebuild trust and patch the cracks, publicly emphasizing, “to create an indestructible manufacturer alliance unique to Jiugui Liquor.” Tactically, he hopes to shift sales resources from channel incentives to real opening scenes—trying to replace the past reliance on price hikes and stockpiling with genuine sales growth.

However, this is also a common industry challenge: when the faith dividend of high-end Baijiu recedes, how to restore channel confidence without falling into a long, inefficient price war? For Cheng Jun, who is returning to the battlefield, balancing “both sides” tests not only management resolve but also involves a gamble against the industry’s downward cycle.

But in business scripts, return often comes with settlement. The sharp decline in early 2026 performance, from another perspective, is also a strategic liquidation—another small-base calculation:

The deeper the pit, the more astonishing the future recovery growth curve.