Jiugui Liquor posted a 37.57% first-half profit rise despite weaker sales.

Jiugui Liquor reported a small rise in first-half profit even as sales fell, pointing to a recovery driven more by cost cuts and a shift in product mix than by stronger demand in China’s liquor market.

The Chinese baijiu producer said it earned 12.32 million yuan in the first six months of 2026, up 37.57% from a year earlier. Revenue for the same period fell 5.58% to 530 million yuan. Based on the reported percentages and rounded figures, that means sales declined by about 31.3 million yuan while profit increased by roughly 3.4 million yuan from a very low base.

The figures suggest that Jiugui Liquor improved earnings mainly by reducing expenses. Total costs fell 6.08% in the January-to-June period, while selling expenses dropped 16.64%. That decline in spending was enough to lift the company back to a modest first-half profit despite weaker turnover.

The sales breakdown shows that not all parts of the business moved in the same direction. The company’s Jiugui line, positioned in the medium-to-high-end segment, grew 16.04% to 336 million yuan. By contrast, the premium Neican series fell 24.14% to 84.17 million yuan. Xiangquan, the lower-priced line, dropped 23.70%.

That shift materially changed the company’s revenue mix. The Jiugui series accounted for about 63.4% of total first-half sales, up from about 51.6% a year earlier, according to calculations based on the disclosed data. The increase of nearly 11.8 percentage points indicates that Jiugui relied more heavily on its medium-to-high-end products as weakness spread across other segments.

Even with the first-half profit increase, the results were not strong on an operating basis. Calculations from the half-year numbers indicate that the company remained loss-making in the second quarter, with a net loss of about 20.9 million yuan. That means the first-quarter performance carried the entire first-half profit and that the business did not yet return to sustained quarterly profitability.

The combination of falling revenue and rising profit is important in the context of China’s baijiu industry, where many producers have faced slower consumption, weaker business entertainment demand, and more cautious distributor ordering. For Jiugui Liquor, the latest numbers do not point to a broad rebound in end-market demand. Instead, they suggest that management protected earnings by trimming costs and leaning more on the Jiugui line while premium and entry-level products lost ground.

The decline in Neican sales stands out because premium products usually play a key role in margins and brand positioning. A drop of 24.14% in that segment suggests pressure at the top end of the portfolio, even if the company managed to offset part of that weakness through expense control. The fall in Xiangquan also shows that lower-priced products did not provide support during the period.

At the same time, the growth of the Jiugui series indicates that the company found relative resilience in the medium-to-high-end bracket. With sales of 336 million yuan, that range became the clear center of the business in the first half. Its stronger contribution helped soften the impact of declines elsewhere, but it was not enough to prevent total revenue from contracting.

Because the profit base was so small, the 37.57% increase should be read with caution. A gain of about 3.4 million yuan in net profit is modest against revenue of 530 million yuan, and the second-quarter loss shows that the earnings recovery remains fragile. The company’s margin improvement came largely from spending restraint rather than from expanding sales.

The first-half report, released on August 25, gives investors a picture of a company that has stabilized earnings in the short term but has not yet restored top-line growth. Its performance depended on a narrower part of the portfolio and on lower commercial spending. If demand across the broader baijiu market remains soft, sustaining profit growth could become harder once the room for further cost reductions starts to narrow.

For now, Jiugui Liquor’s results show a business that is coping with pressure rather than clearly growing out of it. Revenue fell, premium demand weakened, and the company still lost money in the second quarter. The improvement in first-half profit came from lower costs and a heavier dependence on the mid-to-high-end Jiugui brand, not from a general recovery in sales.