Goldman Sachs: Baijiu third-quarter results diverge further: Moutai and J S Jiu buck the trend, while channel destocking continues to weigh on recovery

How wide is the gap between leading baijiu producers?

In the third quarter of 2026, Moutai's revenue and net profit rose 3% and 4% year on year, respectively, both slightly above Goldman Sachs' expectations. Revenue from its series liquors grew 22%, supporting overall performance. Sales through iMoutai were 18.3 billion yuan, down from 18.7 billion yuan in the second quarter, and accounted for 45.5% of baijiu sales, also below the second quarter's 51%.
Revenue at Wuliangye, Luzhou Laojiao and Shanxi Fenjiu fell 38%, 37% and 18%, respectively, over the same period, while their net profits fell 48%, 57% and 35%, all below Goldman Sachs' expectations. Producers' efforts to control shipments and digest channel inventory were the main backdrop.
Fenjiu also showed a clear regional split: revenue within Shanxi province rose 14% year on year, while revenue outside the province fell 30%.

The Jiangsu market showed a stark divergence: J S Jiu's third-quarter revenue and net profit rose 16% and 32% year on year, respectively, above Goldman Sachs' expectations; major rival Yanghe's revenue fell 61%, and it posted a net loss of 771 million yuan. Goldman Sachs believes J S Jiu may be gaining share from Yanghe.
Anhui-based Gujing Gongjiu's revenue rose 4% year on year, returning to positive growth and exceeding Goldman Sachs' expectations, but selling expenses increased and net profit fell 68%. Major rival Yingjia Gongjiu's revenue and net profit rose 3.3% and 8.6%, respectively, benefiting from a product portfolio more focused on the mass market.

Goldman Sachs' estimates of adjusted third-quarter sales show that Moutai fell 4% year on year, while Wuliangye and Luzhou Laojiao fell 52% and 41%, respectively. Over the same period, cash received from the sale of goods rose 3% at Moutai and still increased 1% at Wuliangye.
Among regional brands, cash received from the sale of goods rose 9% at J S Jiu and 41% at Gujing Gongjiu, while Yanghe's fell 58%. Operating cash flow fell 47%, 37% and 57% year on year at Moutai, Luzhou Laojiao and Fenjiu, respectively; Wuliangye, J S Jiu and Gujing Gongjiu turned positive from negative levels a year earlier.

Goldman Sachs expects the industry to recover slowly through the end of 2026 and in 2027, with peak-season sell-through and the normalization of channel inventories as key indicators. As of the end of June 2026, Luzhou Laojiao's channel inventory was equivalent to around seven months of sales, while regional producers generally held three to four months' worth; Wuliangye also faces pressure from historical channel inventory. The pace of destocking will affect the recovery in shipments.
Goldman Sachs expects Wuliangye's fourth-quarter 2026 revenue and net profit to fall 14% and 40% year on year, respectively, before returning to positive growth in 2027. The bank cut its revenue forecasts for 2026–2028 by about 8%–9% and earnings forecasts by about 9%–13%, and lowered its 12-month price target from 64.7 yuan to 59.2 yuan.
Dividend yield is also an important component of investment returns, but current levels are partly supported by cash dividend commitments through 2026. Luzhou Laojiao and Wuliangye have pledged annual dividends of at least 8.5 billion yuan and 20 billion yuan, respectively, for 2024–2026. Goldman Sachs forecasts their 2026 net profits at 5.7 billion yuan and 11.2 billion yuan, respectively, and is therefore focused on shareholder return plans for 2027 and beyond.