Key takeawayBairun’s current earnings benefit from an improved gross margin and a recovery in its ready-to-drink cocktail business, while its whisky business remains in the brand- and distribution-building stage and is adding to maturing whisky inventories.
Why did profit outpace revenue in the first three quarters?
- In the first three quarters of 2026, Bairun recorded revenue of 2.503 billion yuan, up 10.3% year on year; net profit of 662 million yuan, up 20.4%; and net profit excluding non-recurring gains and losses of 633 million yuan, up 22.4%. Both the alcoholic beverages and flavors and fragrances businesses grew year on year.
- Over the same period, gross margin rose 0.7 percentage points year on year to 71.0%. Nomura believes gross margin expansion and a lower effective tax rate together supported net profit growth, making it faster than revenue growth.
- In the third quarter alone, revenue was 846 million yuan, up 8.3% year on year, and net profit was 183 million yuan, up 14.0%; gross margin rose 1.4 percentage points year on year to 71.6%.
What has changed as the whisky business expands?
- As of the end of September 2026, the company’s inventories stood at 1.6 billion yuan, up 16.1% from the end of 2025, mainly due to an increase in whisky undergoing maturation. The company plans to increase its inventory of maturing whisky casks to 1 million casks over the next 4 to 5 years.
- According to the company’s investor relations activity record dated 16 September, its whisky portfolio and distribution network continued to expand, with increases in the number of distributors and retail outlets. Nomura believes the business remains in the brand- and distribution-building stage and that further improvements in products, capacity and distribution channels are expected to gradually generate incremental profit.
How does Nomura view future growth and valuation?
- Nomura believes the continued recovery of the ready-to-drink cocktail business, improved gross margin and expansion of the whisky business support its growth outlook. The bank maintained its revenue forecasts for 2026 through 2028 at 3.255 billion yuan, 3.575 billion yuan and 3.922 billion yuan, respectively, and its net profit forecasts at 756 million yuan, 860 million yuan and 981 million yuan, respectively.
- Nomura maintained its buy rating and target price of 23.28 yuan, based on forecast earnings per share of 0.83 yuan for 2027 and a price-to-earnings multiple of 28 times. The bank’s main downside risks include a slower recovery in demand for ready-to-drink cocktails and weaker-than-expected whisky product launches and distribution expansion.
