Fenjiu released its first quarter report, maintaining its pace in industry adjustment and laying a solid foundation for development through long-term operation.

In the first quarter of 2026, the liquor industry continued to see a deep clearance and structural differentiation trend. According to data from the National Bureau of Statistics, in January-February, the total profit of the alcohol, beverage, and refined tea manufacturing industry decreased by 17.2% year-on-year, indicating significant pressure on the industry as a whole. Against this backdrop, Shanxi Xinghuacun Fen Wine Factory released its first-quarter operating data on April 29, without aggressive growth. Fen Wine focused on channel management, structural optimization, and user operations, showing a distinct feature of stable operation, risk control, and internal strength training. During the reporting period, the company achieved a revenue of 14.923 billion yuan and a net profit of 5.383 billion yuan. The company maintained a slight increase in the provincial market, reducing inventory by 742 million yuan, increasing contract liabilities by 897 million yuan, and gradually improving channel cash flow and turnover status, leaving room for long-term development. The industry is facing common problems such as stockpiling, price inversion, and disorderly pricing, which are essentially caused by excessive transaction costs due to a lengthy distribution chain and misaligned incentive mechanisms. Fen Wine actively bid farewell to scale-driven growth and turned towards ecological priorities, using institutional design and digital tools to reduce internal consumption and improve efficiency throughout the entire chain. Fen Wine published its first-quarter report, optimizing channels to strengthen the foundation of its business. Channel reform was the core action for Fen Wine in the first quarter. Using the first-quarter report as a milestone, the company firmly promoted the three major tasks of destocking, stabilizing prices, and optimizing the structure, shifting the channel focus from "stockpiling for profit" to "service-driven sales." With the upgraded "five-code integration" digital traceability system, Fen Wine achieved full traceability from production to consumption, regulated the market order through technological means, reduced smuggling and price chaos, and stabilized the price system. At the same time, the company promoted channel flattening, eliminated inefficient distributors, concentrated resources on high-quality major retailers and core terminals, shortened policy transmission paths, and improved terminal response times. In terms of incentive mechanisms, Fen Wine deepened the "Fen Enjoyment Privileges" program, linking rebates directly to batch stability, sales progress, healthy inventory, and uncorking rate to encourage distributors to focus on terminal services rather than stockpiling for profit. The company adhered to sales-driven production, abandoning short-term behaviors of stockpiling for reporting purposes, allowing channels to go into battle lightly. With multiple measures, channel inventory returned to a reasonable range, distributor orders became more rational, contract liabilities steadily grew, confirming the restoration of channel confidence. Compared to other companies in the industry, Fen Wine's channel reform aligns with leading liquor companies taking back pricing power and advancing direct distribution to terminals, jointly announcing the end of the old growth model. Upgrading product structure to enhance market competitiveness. Product structure is a key support to resist economic cycles. From the first-quarter report and market feedback, Fen Wine's "grasp of Qinghua, strengthening the core, stabilizing Bofen" pyramid matrix demonstrates strong resilience. The provincial market has remained stable with signs of improvement, providing a stable rear support for national expansion. The focus for markets outside the province shifted from broad coverage to deep cultivation, focusing on 12 core regions for targeted investments, entering a phase of quality improvement in national expansion. According to market research and feedback from distributors, Qinghua series products have performed well, with the Qinghua 20 showing a year-on-year growth of two to three times, and Qinghua 25 nearly doubling in growth, dominating the high-end light fragrance track. Core products such as Laobaifen and Panama have growth potential. Bofen insists on quantity control and price stability, solidifying the foundation of mass consumption and maintaining price integrity. 2026 is a turning point for the liquor industry, with light fragrances leveraging their health attributes and advantage in appealing to a younger demographic becoming a certain growth trend in the industry. Fen Wine's clear product structure covers various price ranges, promoting structural upgrades while also maintaining mass consumption, continuously strengthening its ability to resist economic cycles. Connecting with users to activate new brand vitality. As the era of consumer sovereignty arrives, the industry's focus is shifting from channel dominance to consumer-centric approaches. In 2026, the key year for the industry to fully break through to the consumer end, young consumer groups are more focused on personalized, experiential, and emotional experiences. They have a higher acceptance of low-alcohol, light, and low-burden alcoholic beverages. Light-fragrance white spirits have clean taste, smooth aftertaste, low stimulation, and are relaxing to drink, naturally fitting the needs of younger consumers who prefer light beverages and dislike spicy flavors. The proportion of consumers under the age of 35 in the light fragrance category has significantly increased. Fen Wine has seized this trend by venturing into the "Enjoying Oneself Consumption" new track, launching the 28-degree low-alcohol "Fen Enjoy Youth" series to lower the entry barrier for traditional white spirits among young people. Additionally, Fen Wine has elevated the creative drinking culture of osmanthus-infused Fen wine that emerged spontaneously on social platforms into a brand co-creation event, using the "Guangfen" small wine bar to create a compound experience of "dining + wine + cultural creativity + socializing," transforming white spirits from a tool for socializing into a lifestyle. This user co-creation model may not directly contribute to short-term performance but can increase brand loyalty and build long-term differentiation barriers. In the first quarter, Fen Wine completed a phased transition, focusing on channel quality, structural optimization, and user connections, with a clear and firm direction for transformation during the industry's deep adjustment period. Based on transaction cost theory and industry trends, Fen Wine reduces distribution costs through channel flattening, digital governance, and incentive restructuring, improves profit quality through product matrix upgrades, and seizes young consumer mindshare through consumer-end operations. With channel health improving, national cultivation showing results, and user relationships maturing, Fen Wine is poised to steadily build long-term competitiveness in the wave of light fragrance revival.