Kouzijiao reported a 48.97% drop in first-half profit.

Kouzijiao, the Anhui-based baijiu producer listed in Shanghai, reported a sharp drop in first-half profit as sales weakened and costs did not fall at the same pace, according to the company’s unaudited interim report summary reproduced Thursday by financial website CFi.

Net profit attributable to shareholders fell to 364.86 million yuan in January through June from 715.05 million yuan a year earlier, a decline of 350.19 million yuan, or 48.97%. Revenue fell to 1.95 billion yuan from 2.53 billion yuan, down 579.24 million yuan, or 22.89%.

The figures show that profit contracted more than twice as fast as sales. Based on the reported numbers, net profit as a share of revenue fell to about 18.7% from about 28.3% a year earlier, a deterioration of roughly 9.6 points. In the report summary, the company said the main reason for the larger decline in earnings was that selling and administrative expenses decreased more slowly than revenue.

The company, formally Anhui Kouzi Distillery Co., Ltd., is a liquor producer focused on the Chinese market, mainly Anhui province. Its report did not provide detailed sales volume data or a breakdown by product range, so the available disclosure does not allow a clear separation of price effects from changes in sales mix.

Operating cash flow remained negative in the first half, although it improved from the prior year. Net cash flow from operating activities was an outflow of 256.58 million yuan, compared with an outflow of 382.93 million yuan in the same period last year. That was an improvement of 126.36 million yuan, but it still indicates that the company consumed cash in day-to-day operations during the period.

Other profitability indicators also weakened. Total profit fell to 475.54 million yuan from 946.53 million yuan, a drop of 49.76%. Basic earnings per share declined to 0.61 yuan from 1.20 yuan, down 49.17%. Weighted average return on net assets fell to 3.46% from 6.66%, a decline of 3.2 points.

The balance sheet changed little from the end of last year. Total assets stood at 12.72 billion yuan at the end of the reporting period, up 0.03% from year-end. Net assets attributable to shareholders rose 0.64% to 10.47 billion yuan.

The summary did not identify any major changes in operations or any material events during the reporting period that the company expected would have a significant future impact. It also said there had been no change in the controlling shareholder or the actual controllers, and that the company had no outstanding bonds at the date the report was approved for release.

Kouzijiao’s shareholder structure remained concentrated. As of the end of the reporting period, the company had 66,944 shareholders. Xu Jin was listed as the largest shareholder with a 19.41% stake, followed by Liu Ansheng with 8.94%. The report said Xu and Liu are the company’s actual controllers, and that several other named shareholders act in concert with them. Among institutional investors, funds tracking China’s liquor sector index remained in the top shareholder list, including products managed under China Merchants and Penghua.

The company’s office address in the report is in Huaibei, Anhui. Its shares trade on the Shanghai Stock Exchange under the ticker 603589. The interim report summary said all directors attended the board meeting that reviewed the results.

Because the filing released through CFi was a summary rather than the full half-year report, the available information is limited to headline financial indicators and basic corporate data. The company also stated that the interim figures have not been audited.

Even within that limited disclosure, the first-half numbers point to growing pressure on profitability. Revenue fell by less than one-quarter, but net profit almost halved, indicating that the company has not fully adjusted its cost structure to a weaker sales environment. The slower reduction in selling and administrative costs, as cited by the company, appears to have had a direct effect on margins during the period.

The weakness in earnings came despite some stabilization in cash generation compared with last year. The smaller operating cash outflow suggests some improvement in working capital or collections, but the company still did not return to positive operating cash flow in the first six months.

The report summary was posted by CFi on Thursday and was described as a reproduction of the company’s 2026 half-year report summary. Investors seeking fuller detail on business performance, financial condition and future planning were directed by the company to the full interim report on the Shanghai Stock Exchange website.