Shuijingfang expects a loss in the first half of the year; proactive inventory control drags down revenue by over 300 million yuan.

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The progress of Shuijingfang’s de-stocking in the channels has started to be reflected on the profit and loss statement.

On the evening of July 14, Shuijingfang released its 2026 semi-annual earnings forecast. The company expects operating revenue in the first half of the year to be 1.082 billion yuan, a year-on-year decrease of 27.78%; net profit attributable to shareholders lost 6.22 million yuan, compared to a profit of 105 million yuan in the same period last year; excluding non-recurring items, net loss was 4.67 million yuan, compared to a profit of 48.49 million yuan in the same period last year.

Based on first quarter data, Shuijingfang’s revenue in the second quarter was about 266 million yuan, with an attributable net loss of about 177 million yuan; operating pressure has increased significantly compared to the first quarter.

Shuijingfang attributes the performance decline primarily to proactive inventory control.

The company stated that, in the first half of the year, it further adjusted the shipping rhythm, strengthened channel inventory management, and reduced channel inventory by about 50% compared to the same period last year. This move led to a decrease of about 300 million yuan in revenue and about 250 million yuan in gross profit.

Based on this calculation, the impact on revenue from inventory control is close to 30% of Shuijingfang’s actual revenue in the first half of the year, and is also the most direct cause of the company's turning from profit to loss.

In addition, provisions for inventories and contingencies, a year-on-year decrease in government subsidies, and increased supply chain financing costs further weighed down profits.

In the past six months, Shuijingfang’s operational focus has shifted from pursuing shipment volume to inventory, price, and end-point sales.

Since the beginning of this year, the company has continued to cut channel inventory and concentrated resources on core stores and banquet scenarios, promoting end-point sales through tasting sessions, bottle-opening events, and banquet services.

On the product side, it continues to promote the Jing 18, Zhenniang Master, and "First Fang" series, focusing on the price range of 300 to 800 yuan, and is also trying out low-alcohol, smaller size, and e-commerce exclusive products to cover more consumption scenarios.

Channel order is also a key area of recent adjustment.

In early July, Shuijingfang issued a market order notice to distributors and terminal stores, proposing to strengthen product traceability and cross-regional transfer controls, while optimizing product delivery, monitoring channel inventory, and increasing support for banquets and bottle-opening.

According to the semi-annual performance preview, the cost of this round of adjustments has already become apparent.

Next, what Shuijingfang needs to verify is whether clearing inventory and improving the price system can translate into growth in end-point sales, and drive shipment and profit recovery in the second half of the year.

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