Key takeaway

The company, based on the principle of prudence, adjusted the accounting treatment related to revenue recognition for some businesses in 2025, which impacted revenue for the first three quarters of 2025 by approximately RMB30.3bn and net profit attributable to shareholders of the parent company by approximately RMB15.0bn. This more objectively and fairly reflects the financial position and operating results, aligning with the company's substantial balance sheet cleanup in 2025. Against the backdrop of controlled shipments and a low base in 1Q25, along with relatively strong sales momentum during the 2026 Spring Festival, the company achieved high revenue and profit growth in 1Q26. For the full year, the eighth-generation Wuliangye is expected to achieve volume expansion amid a lower effective payment price, and full-year revenue and profit may likely recover. Attention should be paid to reform initiatives under a lightened load in 2026, as well as high dividend yields supported by high dividends and large-scale buybacks.

Event

The company released its 2025 annual report and 1Q26 report.

Based on data restated for prior-period accounting errors, 2025 revenue was RMB40.529bn (-54.55%); net profit attributable to shareholders of the parent company was RMB8.954bn (-71.89%). 1Q26 revenue was RMB22.838bn (+33.67%); net profit attributable to shareholders of the parent company was RMB8.063bn (+82.57%).

Risks: Household demand recovery may fall short of expectations. In the past 2 years, economic growth has slowed due to macroeconomic factors, and household income growth has also been affected. The pace of shortto medium-term household income growth and consumer spending power recovery may not meet expecta tions. Slower-than-expected economic recovery: If the company's cash flow recovery is slower than expected, the resurgence in demand for the company's products in business catering scenarios may be slower than expected. Food safety: In recent years, food safety has always been the focus of consumers. Although the company in the food industry has continuously improved production quality control levels, since it involves many links and enterprises, there are still food quality and safety risks. Abnormal stock price fluctuations. Changes in the capital market sentiment or expectation towards the company may lead to abnormal stock price fluctuations.