Fenjiu (600809.SH) Q3 Report: Clearing Continues, but Channel Signals Are Worth a Look

On October 28, Shanxi Xinghuacun Fen Wine Factory (600809.SH) disclosed its Q3 2026 financial report. During the reporting period, Shanxi Xinghuacun Fen Wine Factory achieved operating revenue of RMB7.338 billion, total profit of RMB2.698 billion, and net profit attributable to shareholders of the listed company of RMB1.899 billion. Regarding the performance changes, the financial report explained that they were mainly due to a decline in revenue during the period and limited room for cost and expense reduction. Accordingly, Fenjiu remains in a clearing phase, but this also reflects the company's proactive control over its operating rhythm during the industry adjustment period: it does not treat short-term growth as the sole objective and places greater emphasis on channel health and long-term development quality. As the baijiu industry enters a phase of deep adjustment, Fenjiu has moved away from the single yardstick of short-term scale and prioritized building a healthy and sustainable operating ecosystem. Changes at the market level stem from the brand's proactive calibration and rebuilding of its foundation. Fenjiu's brand base and market position remain solid, and it is steadily driving a shift in its growth logic from channel-driven to consumer-driven, linking with terminals, staying close to users, and continuously exploring products, scenarios, and consumer experiences to build up momentum for long-term development. Proactively optimizing the channel ecosystem and eliminating inefficient players to defend the price floor At present, Fenjiu is advancing quality and efficiency improvements among its distributor base, continuously streamlining its channel structure, and making high-quality merchants the main force in market operations. Since the end of last year, Fenjiu's channel optimization has been continuously implemented, streamlining and optimizing inefficient and non-compliant distributors. The reduction is not about shrinking the market, but about proactively clearing out inefficient channels that engage in cross-regional arbitrage and price disruption and do not comply with price-floor rules, concentrating resources to support high-quality partners, and improving the quality and efficiency of individual merchants. Regarding behavior that disrupts market order, Fenjiu's stance is clear: previously, a certain large supermarket channel used Fenjiu products as a low-price traffic driver, disrupting regional price floors. Fenjiu promptly cut off supply and at the same time set up a cross-regional arbitrage buyback mechanism. Once goods flow into price-disrupting channels, the responsible parties must buy back by the bottle and bear responsibility. In an environment where industry price floors are under general pressure, Fenjiu chose to defend the price floor. It would rather sacrifice short-term sales than allow the price system across its entire product line to be damaged, which is also an important reason why the wholesale prices of the Qinghua series have remained stable. Channel governance has controlled the source of disorderly circulation. The distributors retained after screening have stronger operational quality and compliance awareness, laying a solid foundation for subsequent manufacturer-distributor collaboration. Transforming the underlying logic of incentives from purchase rebates to real sell-through Channel access is only the first step. The reconstruction of profit rules is the core of this round of adjustment. Fenjiu has changed its past incentive approach centered on payments and stock purchases, shifting the reward yardstick to real terminal bottle-opening sell-through. Relying on the "Fenxiang Liyu" and "Five Codes in One" digital traceability system, the brand has deferred rebates and made marketing resources follow actual consumption. This also requires distributors to change their role, no longer simply serving as warehouses for goods transit, but instead becoming service providers facing terminals, deepening local scenarios, doing a good job in consumer operations, and connecting the "last mile" with ordinary consumers. After this refined management was implemented, positive changes gradually emerged in core markets in many places: channel inventory fell back to a healthy range, market price order became more stable, distributors' cash flow pressure eased somewhat, and the relationship between manufacturers and distributors gradually shifted from the previous game over targets to value co-creation. Judging from market research feedback, in Q3 the wholesale prices of the Qinghua Fenjiu series remained stable overall. Sales of 42-degree Qinghua Fenjiu 30 grew by more than 30%, and sales of 53-degree Qinghua Fenjiu 25 more than doubled sharply; sales of the Panama series were stable and improving; market demand for Bofen was solid, with actual demand exceeding supply. The brand ensured reasonable profit space for channels through phased supply control and avoided overdrafting long-term value; the Baiyu Fenjiu and Meigui Fenjiu series are precisely in line with the new trend of youthful light drinking and slight tipsiness, with sales growing nearly 8 times, becoming a "dark horse" suited to current trends. Anchoring C-end co-creation and navigating the industry cycle with long-termism The ultimate goal of a series of channel reforms is to serve the consumer end and complete the transformation from channel-driven to consumer-driven. Fenjiu no longer unilaterally outputs products to the market, but opens a channel for co-creation with consumers. The online "Everyone Loves Fenjiu" challenge attracted a large number of users to spontaneously share cocktail recipes and everyday light-drinking moments. Massive real drinking feedback directly became a reference for product innovation. Based on user preferences, the brand launched products such as Chenpi Fenjiu, the Fenjiu Xun series, and the Jurassic series Fenjiu, continuously refining the "Fenjiu +" series of youthful fusion new products, breaking out of the traditional baijiu drinking framework, and responding to young people's real needs for light tipsiness and diverse pairings. Relying on the core product echelon of "strengthen Qinghua, reinforce the mid-range, stabilize Bofen," Fenjiu safeguards the base of mature major while taking on user creativity and continuously tapping incremental demand such as self-pleasing light drinking and casual gatherings. The phased adjustment in this round of Q3 performance is essentially the inevitable pain Fenjiu must go through as it proactively abandons the of extensive channels and completes the iteration of its operating logic. In an adjustment cycle where the entire industry is generally passively destocking and defending price floors, Fenjiu's differentiated advantage lies in the fact that it has not fallen into passive defense, but through three-dimensional reform of channel clearing, incentive reconstruction, and deep C-end cultivation, it has transformed short-term performance pressure into long-term value accumulation. Channel standardization, price-floor stabilization, and consumer rejuvenationthese three underlying changes are reshaping the brand's core competitiveness, transforming traditional channel sales into real user mindshare, scenario-based sell-through, and brand barriers. Short-term data fluctuations do not change the long-term positive fundamentals. As the industry gradually clears, Fenjiu, which has completed ecological reshaping in advance and consolidated its operating foundation, is expected to usher in a development trend of crouching down and leaping up, steadily building momentum.