Jinzhongzi Wine Chairman: Inventory digestion is a key task for 2026, with over 80 million yuan of social inventory cleared

As competition in the Anhui liquor market intensifies, Jinzhongzi (Golden Seed Wine) — having divested its pharmaceutical segment to refocus on baijiu — continues to struggle with declining revenue and persistent losses.

On September 23, the company held a semi-annual performance briefing, where investors pressed for answers on how Jinzhongzi plans to break out of its downward cycle. The company openly acknowledged investor concerns, addressed operational pain points, and outlined remedial measures.

Clearing Channel Inventory

As a representative of fuhexiang (blended aroma) baijiu, Jinzhongzi has faced a difficult two years. In the first half of this year, the company’s revenue shrank to just 236 million yuan, with second-quarter revenue falling below 50 million yuan — a clear sign of mounting operational pressure.

Investors urgently sought answers to key questions: How will channel pressure be resolved? What measures will drive sales? Why does cash flow far exceed net losses?

At the performance briefing, the company responded directly to each concern.

Xie Jinming, Chairman and General Manager of Jinzhongzi, stated: "Inventory digestion is one of the company’s key priorities for 2026. In the first half of the year, we reduced social inventory by over 80 million yuan through consumer cultivation, real sales execution, and banquet market expansion. Going forward, we will adhere to a healthy performance outlook, avoid pressuring terminals with stock, and implement moderate inventory controls to keep terminal inventory at reasonable levels."

Xie also noted that accounts receivable increased by approximately 20 million yuan year-on-year in the first half. He attributed the company’s current performance to both the ongoing deep transformation of the baijiu industry and efforts to reduce channel inventory. Jinzhongzi has maintained consistent credit support policies for distributors, evaluating them based on reputation, sales scale, operational capability, and compliance with market order. Credit support is adjusted according to market conditions and distributor needs at different stages.

Deepening Roots in Fuyang, Launching New Nianfen Series

Beyond resolving channel inventory risks, Jinzhongzi is positioning its home market of Fuyang as a core battleground for recovery. The company is executing a strategy centered on *"strengthening the base, optimizing fuhexiang, improving quality and efficiency, and achieving win-win outcomes with distributors"* — combining product, channel, and brand initiatives to build momentum for future performance recovery.

According to a Daily Economic News report, Jinzhongzi’s fuhexiang bottle-opening rate in Fuyang rose 20% year-on-year, and banquet business doubled in scale.

On the product front:

• The new Nianfen series (Zhen 5, Zhen 7, Zhen 9) has been launched, filling a gap in the 100–200 yuan mainstream price range, and has received positive consumer feedback and repurchase intent.
• The Yingzhou Jia Niang bottled liquor has also been well received, enriching the product portfolio.

In terms of channel strategy, Jinzhongzi is advancing an integrated manufacturer-distributor model, transitioning traditional distributors into operators. The company is also cracking down on market order violations such as price-cutting and cross-regional sales, promoting value recovery for fuhexiang, increasing terminal display exposure, and improving channel quality.

Xie Jinming told investors: *"Facing the deep transformation of the baijiu industry, Jinzhongzi adheres to a healthy performance outlook and the strategy of strengthening the base, optimizing fuhexiang, improving quality and efficiency, and achieving win-win outcomes with distributors. We will steadily advance operations through base market consolidation, channel inventory management, product structure optimization, market order rectification, marketing model reform, consumer cultivation, and internal management improvement."*

Analyst Outlook

Guohai Securities noted that Jinzhongzi’s short-term core challenges remain channel inventory, price stability, and base market recovery. Key areas to watch include:

• The pace of recovery in the Fuyang base market
• Whether the 90–120 yuan Nianfen price band can achieve stable volume growth
• Whether high-end fuhexiang products can stop declining
• Whether synergies with the China Resources system can further translate into terminal sales

If inventory normalizes and core product sales improve, the company’s financial reports may gradually emerge from the current adjustment pressure.

Cover image source: Daily Economic News Media Library