The Truth Behind the “Crazy” Rise in Huiji Mountain’s Stock Price: A New Favorite of Liquor Investment Funds, or a Bubble in the Capital Market?
Hello everyone, I’m your financial analyst. Recently, something quite interesting happened in the liquor industry: Huiji Mountain, a company that sells yellow rice wine, has seen its stock price soar like a rocket, doubling in just three months and even reaching a record high. Many people’s first reaction was, “Can a company that sells yellow rice wine really be so popular?” Or more directly, “Could it be that the funds that used to invest in companies like Moutai and Wuliangye have nowhere else to go and have turned to buy Huiji Mountain’s shares?”
Today, we’ll break down this “yellow rice wine craze” in simple terms to determine whether what’s behind it is a real revaluation of the company’s value or just a bubble created by market speculation.
Summary of the Key Points:
In short, Huiji Mountain (the leader in the yellow rice wine industry) has experienced a dramatic rise in the second half of 2025.
- Stock Price Performance: The stock price increased from 13.77 yuan at the end of June to over 30 yuan in mid-September, a growth of more than 100%.
- Change in Industry Position: Huiji Mountain has surpassed its long-standing competitor, Guyue Longshan, in both revenue and net profit, taking the title of “Number One in Yellow Rice Wine.”
- Market Speculation: Due to the recent sluggish performance of liquor stocks like Moutai and Wuliangye, there’s speculation that “liquor investment funds” are looking for new growth opportunities and have shifted their investments to the yellow rice wine sector.
- Key Actions: Huiji Mountain has not only seen improved financial performance but has also brought in major distributors of Moutai and Wuliangye to sell its products and launched high-end and more youthful-oriented products, such as “Lanting” and “Bubble Yellow Rice Wine.”
In one sentence: Huiji Mountain has caught everyone’s attention by changing its leadership and forming partnerships with major liquor distributors, but whether its fundamentals (profitability and brand recognition) are strong enough to sustain this high level of expectations from the liquor industry remains a big question.
In-Depth Analysis: Five Dimensions to Understand Huiji Mountain’s “Highlight” and “Concerns”
1. The “Number One” Change: Winning Against Competitors, but Not Against Liquor Brands
[Easy-to-Understand Explanation]
Previously, when people thought of yellow rice wine, Guyue Longshan was the first that came to mind. However, Huiji Mountain has now surpassed it. In the first half of this year, Huiji Mountain’s revenue and net profit both exceeded Guyue Longshan’s. This is big news in the usually overlooked yellow rice wine industry and has prompted investors to reevaluate the company.
However, being the “number one” in yellow rice wine doesn’t mean it’s as valuable as a liquor brand like Moutai.
- Profitability Gap: Although Huiji Mountain’s profits increased by 37%, a closer look at the financial reports reveals that some of this growth was due to tax incentives and asset appreciation. Excluding these factors, the actual profit growth from selling yellow rice wine was only 16.77%.
- High Valuation: Huiji Mountain’s price-earnings ratio (PE) has reached 48 times, meaning that if its performance doesn’t continue to grow rapidly, the current stock price already reflects expectations for many years of future earnings. In contrast, even though liquor stocks have declined, their valuations are still more solid.
- Key Performance Indicators:
- Gross Margin: Huiji Mountain’s gross margin is 56%, compared to the liquor industry average of 67% and Moutai’s 90%.
- ROE (Return on Equity): Huiji Mountain’s ROE is 3.36%-6.6%, while the liquor industry average is 4.95%-7.89%, and Moutai’s is as high as 16%-32%.
Conclusion: Huiji Mountain has outperformed its competitors in the yellow rice wine industry, but it still falls far short of the core indicators of a liquor brand in terms of value.
2. Liquor Distributors “Crossing Over”: Cooperation or a Lifeline?
[Easy-to-Understand Explanation]
One of the most exciting developments is that major distributors of Moutai and Wuliangye have started selling Huiji Mountain’s products. For example, Shengshi Qunyun (the chairman of the Moutai Sichuan Distributors Association) and several other major distributors from Henan, Shanghai, and Guangdong have signed deals with Huiji Mountain.
Why Would Liquor Distributors Sell Yellow Rice Wine?
- Liquor Market Challenges: There’s a surplus of liquor, prices are declining, and distributors are facing thin profits. They need new sources of profit.
- Resource Utilization: These distributors have access to wealthy customers, business banquet channels, and group buying opportunities. Selling high-end yellow rice wine like Huiji Mountain’s “Lanting” allows them to leverage these existing networks without having to build new customer bases.
What Does This Mean for Huiji Mountain?
- Benefits: Yellow rice wine traditionally sells well in Jiangsu, Zhejiang, and Shanghai. With these distributors, Huiji Mountain can expand into other regions, such as Sichuan, Guangdong, and Henan, where revenue has increased by 76%.
- Risks: Distributors are profit-driven; if yellow rice wine doesn’t sell well or doesn’t generate sufficient profits, they may withdraw their support. The cultural appeal of yellow rice wine in other regions needs to be proven.
Conclusion: This is a case of resource exchange: Huiji Mountain gets access to new markets, and distributors gain profit opportunities through Huiji Mountain’s products. However, the sustainability of this partnership depends on whether yellow rice wine can establish itself in these markets.
3. Spending Big on Marketing to Expand the Market
[Easy-to-Understand Explanation]
To sell its products, especially outside its home region, Huiji Mountain has invested heavily in advertising and promotions.
- Increasing Marketing Expenses: In 2023, for every 100 yuan in sales, Huiji Mountain spent 14.67 yuan on marketing; by 2025, this number had risen to 25.97 yuan, a significant increase of 27.71% in the first half of this year.
- Financial Impact: Of the 55 yuan in gross profit from each 100 yuan in sales, over 27 yuan goes towards marketing. The remaining money is used for taxes, management fees, and research and development, leaving little net profit.
- Challenge: Although the gross margin has increased, the rapid rise in marketing expenses indicates that Huiji Mountain’s revenue growth is largely driven by spending, not by brand appeal.
Conclusion: This model is not sustainable in the long run. If sales don’t continue to grow rapidly, high marketing costs will erode profits. Investors need to be cautious about whether the current profit growth is truly sustainable.
4. A Dual Strategy: Targeting High-End and Young Consumers
[Easy-to-Understand Explanation]
Huiji Mountain’s strategy focuses on two markets:
- High-End (Lanting Series): Huiji Mountain aims to sell products for several hundred to over a thousand yuan per bottle, positioning itself as a luxury brand similar to high-end liquor.
- Young Consumers (Bubble Yellow Rice Wine): It offers bubble-filled, flavored, and small-packaged yellow rice wine to appeal to younger consumers.
- Challenges: Business events often feature Moutai and Wuliangye, and young people may question the prestige of yellow rice wine. The price of 2299 yuan for a bottle doesn’t match the luxury image associated with Moutai.
- Repetition: Young consumers’ interest in new products is fleeting, and there’s a challenge in establishing a lasting brand preference.
Conclusion: Huiji Mountain is trying to enter high-end markets and attract younger consumers, but these efforts are challenging given the existing market preferences for liquor and beverages.
5. The Biggest Concern: The “Cooking Wine” Label and Regional Dependency
[Easy-to-Understand Explanation]
This is a significant issue for Huiji Mountain and the entire yellow rice wine industry:
- Cultural Perception: In many regions outside Jiangsu, Zhejiang, and Shanghai, yellow rice wine is primarily seen as a cooking ingredient. Changing this perception is difficult.
- Regional Revenue: Over 80% of Huiji Mountain’s revenue comes from these three regions, and even its home market in Zhejiang is declining. This indicates a fragile foundation, as growth from other regions is needed to compensate for losses in its core markets.
Conclusion: If Huiji Mountain can’t break this perception and stabilize its market in its home region, its growth outside these areas will be short-lived.
Advice for Investors
1. Don’t Blindly Believe the Story of Liquor Fund Shift: While liquor distributors are selling Huiji Mountain’s products, this is more about finding new profit sources, not a shift in the overall investment trend in the liquor industry. Huiji Mountain’s financial indicators still lag behind those of leading liquor brands.
2. Be Cautious of High Valuations: A PE of 48 times reflects high expectations. If performance slows down (for example, if marketing expenses remain high while revenue growth stagnates), the stock price could decline.
3. Watch Two Key Signals:
- Marketing Expenses: A decrease in marketing expenses would indicate improving brand strength.
- Revenue Stability in Core Regions: The stability of Huiji Mountain’s home market is crucial for its long-term success.
4. Long-Term Brand Building, Short-Term Market Trends: Yellow rice wine has cultural value, but its market is shrinking. Huiji Mountain is working to rebuild its brand, which will take time. Short-term traders may benefit from market sentiment, but long-term investors should be cautious, as the current stock price may already reflect future growth potential.
In summary: Huiji Mountain is making efforts and using smart strategies, but it hasn’t yet become the “Moutai of the yellow rice wine industry.” The current stock price is largely driven by market sentiment and capital movements, not by solid fundamentals. Before investing, consider these factors carefully.