Tianyoude reported a 79.7% drop in first-half profit.

Tianyoude, a Chinese producer of Tibetan highland barley baijiu, reported a sharp drop in first-half profit and a deeper loss in the second quarter, underscoring the pressure that weaker liquor demand is placing on smaller regional brands as the year progresses.

The company said in its 2026 interim report, released Tuesday, that net profit attributable to shareholders fell 79.7% from a year earlier to 10.44 million yuan in the first six months. Based on that decline, profit was about 51.4 million yuan in the same period last year, meaning the company gave up roughly 41 million yuan in earnings.

Revenue also weakened. Tianyoude said first-half sales fell 14.7% to 575 million yuan, down by about 99 million yuan from a year earlier. Profit excluding non-recurring items dropped 81.6% to 8.99 million yuan, showing that the decline was not limited to one-time accounting factors.

The pressure intensified in the April-to-June period. Second-quarter revenue fell 30.4% to 169 million yuan. The company posted a net loss attributable to shareholders of 38.04 million yuan, compared with a loss of 16.04 million yuan in the same quarter last year. That widened the quarterly loss by about 22 million yuan. Net loss excluding non-recurring items also worsened, reaching 37.62 million yuan from 17.06 million yuan a year earlier.

The first-half figures suggest that demand and pricing conditions remained difficult for the company even as it kept its core business structure unchanged. Tianyoude said in the report that its main business continues to be the research, production and sale of highland barley baijiu. It still uses solid-state fermentation in production and relies on a sales model that combines distributors with direct sales from the manufacturer.

The company said its distribution system continues to operate through first- and second-tier distributors that handle delivery and sales to end markets. It also runs directly operated specialty stores in Qinghai, Gansu and Beijing, while continuing to build sales channels outside its home province. At the same time, it said it has been trying to upgrade its product mix and focus more closely on banquet-related consumption occasions and differentiated service in an effort to improve sales at the retail end and increase repeat purchases.

Even with the drop in sales and profit, Tianyoude reported stronger operating cash generation. Net cash flow from operating activities rose 119.4% to 118 million yuan in the first half. The increase stands out against the weaker income statement, but it does not by itself indicate a recovery in demand or profitability. Cash flow can improve for reasons such as changes in collections, inventory or payment timing, and the company’s reported sales trend remained negative through both the half year and the second quarter.

The balance sheet changed only modestly. As of the end of the second quarter, Tianyoude said total assets stood at 3.147 billion yuan, down 1.4% from the end of last year. Net assets attributable to shareholders were 2.843 billion yuan, up 0.4% from the end of last year. Fully diluted earnings per share for the first half were 0.0219 yuan, while second-quarter earnings per share were -0.0799 yuan.

The results add to evidence that the slowdown in China’s baijiu market is reaching beyond the country’s largest national brands and weighing more heavily on regional producers. Tianyoude is known for baijiu made from Tibetan highland barley, a niche product compared with mainstream sorghum-based liquors. Its latest report suggests that the company is facing weaker revenue, lower profit and a faster deterioration in quarterly performance even as it continues to invest in channels and product positioning.

The company’s own discussion of operations did not point to a change in business model during the reporting period. Instead, the interim report described efforts to respond to a shifting market through channel development, store operations in selected regions and product structure adjustments. Those measures, however, did not prevent the sharp second-quarter decline in revenue or the larger quarterly loss.

The figures were based on the company’s half-year report and should be viewed as corporate disclosures rather than audited annual results. For investors and industry watchers, the main signal from the filing is that Tianyoude’s earnings pressure worsened in the second quarter, while the improvement in operating cash flow has not yet been matched by a turnaround in sales or margins.