Shede Spirits Co Ltd: A Tumultuous Year in the Liquor Industry

In the ever-volatile world of consumer staples, Shede Spirits Co Ltd, a prominent player in the Chinese liquor market, finds itself at a crossroads. With a market capitalization of 173.7 billion CNH and a close price of 50.92 CNH as of July 14, 2025, the company’s financial health is under intense scrutiny. The recent news paints a picture of a company grappling with industry-wide challenges and internal strategic shifts.

Market Turbulence and Strategic Shifts

The liquor sector, particularly the “baijiu” segment, has experienced significant fluctuations. On July 16, 2025, a notable rebound was observed with Shede Spirits Co Ltd’s stock rising over 6%, following a broader market recovery. This surge was part of a larger trend where companies like Tianyoude, Luzhou Laojiao, and others saw similar gains. However, this rebound comes amidst a backdrop of industry-wide “performance slaughter,” with several liquor companies reporting drastic drops in net profits, some even facing losses.

Shede Spirits Co Ltd’s CEO, Pu Jizhou, has called for a “wolf culture” within the company, urging all employees to prioritize marketing above all. This directive was part of a broader strategy unveiled at the company’s marketing system new fiscal year kickoff meeting. The emphasis on aggressive marketing and innovation as tools to navigate the current economic cycle reflects a bold, if not desperate, attempt to steer the company through turbulent times.

Financial Strains and Operational Challenges

The company’s financials reveal a concerning picture. With inventory turnover days reaching 984.68 days in the first quarter of 2025, up from 939.7 days at the end of 2024, Shede Spirits Co Ltd faces significant inventory pressure. The decision to halt sales of certain products from its Shede brand, specifically the Tao Pai Tequ 2.0 series, underscores the operational challenges the company faces. Citing “management needs,” the company has paused sales orders for these products, though specifics remain undisclosed.

The broader industry context is not favorable. The first half of 2025 has been described as a period of deep adjustment for the baijiu sector, with traditional consumption scenes like business banquets and gatherings under pressure. This has led to a slowdown in market recovery, affecting companies across the board. While top-tier brands like Moutai and Wuliangye have maintained relative stability, Shede Spirits Co Ltd, among others, has seen its net profits plummet.

Looking Ahead

As Shede Spirits Co Ltd navigates these challenges, the company’s leadership has made it clear that innovation and a relentless focus on marketing are key to their strategy. The call for a “wolf culture” and the emphasis on not compromising on innovation reflect a company at a critical juncture, willing to take bold steps to secure its future.

However, the path ahead is fraught with challenges. The industry’s current state, characterized by declining profits and operational hurdles, requires more than just aggressive marketing and innovation. It demands a reevaluation of business models, a deeper understanding of consumer behavior, and perhaps most importantly, a clear vision for the future.

As Shede Spirits Co Ltd and its peers continue to grapple with these issues, the coming months will be critical. The company’s ability to adapt, innovate, and execute its strategies will determine its place in the ever-evolving liquor industry landscape. For investors, stakeholders, and consumers alike, the unfolding story of Shede Spirits Co Ltd is one to watch closely.