Shede Wine Industry’s vice-president Wang Yong resigned in early March, a move that rippled beyond a routine personnel change. Wang was a seasoned operator in local government-business relations in Sichuan, and his exit removes a familiar bridge between the company and the municipal authorities that have long mattered to distribution and channel stability.
Fosun Group has controlled Shede since a 2020 judicial auction and has kept a tight grip on the board even as frontline management has shuffled between insiders and local veterans. Chairman and board seats remain dominated by Fosun executives, yet the company’s operating numbers tell a picture of a brand under stress rather than one being carefully groomed for national expansion.
Shede’s financials through the first three quarters of 2025 underline the weakness: revenue of RMB 3.702 billion, down 17%, and net profit attributable to shareholders of RMB 472 million, down nearly 30%. Mid-to-high-end product sales — the core of Shede’s image — fell sharply, whereas lower-priced mainstream products posted modest growth, a sign the company is being squeezed toward the middle by both premium incumbents and price-sensitive segments.
The wider baijiu market remains in a protracted structural adjustment. Consumption scenarios have shrunk since the pandemic, channel inventories remain high across the industry, and the so-called Matthew effect has intensified: top-tier brands with strong barriers to entry hold steady, mass-market staples benefit from necessity consumption, and the squeezed sub-premium tier, where Shede sits, faces the greatest pressure.
Operational choices have compounded the problem. Shede is pushing ahead with a large-scale capacity expansion project budgeted at RMB 7.054 billion that would add roughly 60,000 tonnes of base liquor capacity and 342,500 tonnes of storage, even as inventory swelled from RMB 2.794 billion in 2021 to RMB 5.219 billion in 2024 and to RMB 5.677 billion by Q3 2025. Inventory turnover days have risen to a staggering 1,127 days, highlighting the cash and balance-sheet risk of continuing to build supply into weak demand.
Corporate governance has been fluid. Fosun initially relied on longtime local managers such as Zhang Shuping to steady the business after the takeover, then cycled through Fosun executives before restoring a local leadership face with chairman Pu Jizhou. Despite these shifts, Fosun maintains decisive influence on the board, and Guo Guangchang — a noted baijiu enthusiast who personally champions Shede and other beverage investments — has publicly endorsed product initiatives such as a proposed T68 premium line.
The near-term outlook is fraught. Sales deterioration, dealer attrition and rising inventories imply that Shede will need either better traction with consumers, painful inventory write-downs, or further capital support from Fosun. The company’s generous dividends in 2024, with a payout ratio of about 40.94%, mark it as a cash-generating target for the parent even as core business metrics weaken, raising questions about whether shareholder returns are masking operational fragility.
Wang Yong’s departure matters because provincial and municipal relationships in China’s liquor sector still shape distribution, licensing and regional campaigns; losing a manager with deep local ties reduces optionality for a brand seeking to stabilize ground-level sales. Whether Guo’s affection and Fosun’s board control translate into strategic patience, more aggressive product repositioning, or a restructuring of the dealer network will determine if Shede can navigate a prolonged cyclical trough or slowly erode market relevance.