Core Viewpoint - Shanxi Fenjiu's stock price has shown a slight increase, with a year-to-date rise of 6.84%, indicating a stable performance in the market [1] Group 1: Stock Performance - On October 30, Shanxi Fenjiu's stock rose by 2.02%, reaching 190.34 CNY per share, with a trading volume of 397 million CNY and a turnover rate of 0.17% [1] - The total market capitalization of Shanxi Fenjiu is 232.2 billion CNY [1] - Year-to-date, the stock has increased by 6.84%, with a 0.44% rise over the last five trading days, a 2.19% decline over the last 20 days, and a 2.83% increase over the last 60 days [1] Group 2: Financial Performance - For the first half of 2025, Shanxi Fenjiu reported a revenue of 23.964 billion CNY, reflecting a year-on-year growth of 5.35%, and a net profit attributable to shareholders of 8.505 billion CNY, which is a 1.13% increase year-on-year [1] - Since its A-share listing, Shanxi Fenjiu has distributed a total of 24.325 billion CNY in dividends, with 16.775 billion CNY distributed over the past three years [2] Group 3: Shareholder Information - As of June 30, 2025, the number of shareholders for Shanxi Fenjiu reached 104,400, an increase of 52.38% compared to the previous period [1] - The average number of tradable shares per shareholder is 11,687 shares, which is a decrease of 34.38% from the previous period [1] - Major institutional shareholders include Hong Kong Central Clearing Limited, which holds 48.9991 million shares, and other significant shareholders such as China Merchants Index and E Fund Blue Chip Select Mixed Fund [2]

Core Insights - The meeting held on October 28 focused on building communication platforms, deepening industrial collaboration, and promoting high-quality development between Shanxi Provincial Private Economy Promotion Association and Zhuyeqing Industry Company [1] Group 1: Meeting Overview - The meeting was attended by key figures from the Shanxi Provincial Private Economy Promotion Association and Zhuyeqing Industry Company, including leaders and representatives from various sectors [3] - The meeting was hosted by Secretary-General Li Bing, emphasizing the importance of collaboration and resource sharing for mutual growth [3] Group 2: Key Statements - Wang Guohua expressed gratitude towards Zhuyeqing for their hospitality and highlighted the association's role in promoting Shanxi's private economy, noting Zhuyeqing as a significant cultural and economic symbol of the province [5] - Chen Jieming provided an introduction to Zhuyeqing Industry Company, detailing its development history, core advantages, and future plans, showcasing its rich heritage and innovative spirit [7] Group 3: Collaborative Opportunities - Zhu Qianrui acknowledged the significance of the meeting, emphasizing Zhuyeqing's market potential and the importance of resource sharing and collaboration for future development [9] - The free exchange segment allowed entrepreneurs to propose constructive cooperation ideas in areas such as packaging design, marketing, logistics, digital management, and resource recycling, aligning closely with Zhuyeqing's development needs [9] Group 4: Strategic Development - Both parties agreed to leverage their respective resources to deepen cooperation in industrial integration, brand building, and innovative development, aiming for a synergistic effect to boost Shanxi's brand products and private economy [9] - This year is pivotal for the revival of the Zhuyeqing brand, with the company focusing on strategic product development and market planning along three main paths: "liquor transformation, functionality, and fashion" [9] Group 5: Historical Significance - Zhuyeqing liquor has a rich history, being recognized as the first liquor served at state banquets in New China and winning multiple awards, establishing itself as a benchmark in the liquor industry [10] - The brand has gained international recognition, selling in over 60 countries and regions, thus becoming a vibrant representation of Chinese culture [10]

Core Insights - The 2024 FCF Top 99 list was released on October 28, highlighting the free cash flow generation capabilities of A-share listed companies in China [1] - The report series, including CVA Top 50 and EVA Top 99, aims to reveal the shareholder value creation abilities of these companies [1] - The focus on free cash flow generation has led to the introduction of various index products linked to free cash flow by index companies [1] FCF Top 99 Summary - Guizhou Moutai (600519) and Focus Media (002027) share the highest net asset free cash flow return rate (FCFOE) at 0.361, up from 0.277 in 2023 [3] - Among the 16 companies listed continuously from 2016 to 2024, five are in the liquor sector, and two are in home appliances [3] - Gree Electric (000651) has seen a decline in ranking from a three-time champion to 8th place [3] Company Ownership Structure - The 2024 list includes 35 state-controlled companies, a decrease of 11 from the previous year, while non-state-controlled companies increased to 64, surpassing 60% [4] - The pharmaceutical manufacturing industry leads with 15 companies, followed by the beverage and refined tea manufacturing, and electrical machinery and equipment manufacturing with 12 each [4] CVA Top 50 Summary - The CVA Top 50 report indicates that only companies generating net profits or free cash flow exceeding the cost of equity capital create true shareholder value [5] - Among the 11 companies consistently listed from 2016 to 2024, five are in the liquor sector [5] - The number of state-controlled companies on the list decreased to 18, while non-state-controlled companies rose to 32, making up 64% [5] EVA Top 99 Summary - The EVA Top 99 list emphasizes that economic value added (EVA) reflects the true shareholder value creation by accounting for the cost of equity capital [6] - Chongqing Beer (600132) topped the list with an EVA return rate (EVAOE) of 0.297, while Guizhou Moutai ranked second at 0.235 [8] - The liquor industry dominates the top three positions in the EVA rankings [8] Long-term Trends - From 2016 to 2024, the liquor sector maintained a strong presence with six companies consistently listed, while the number of state-controlled companies decreased to 27 [9] - Non-state-controlled companies increased to 72, representing 72% of the total [9]

Core Insights - The 2024 EVA Top 99 report highlights the top A-share listed companies in terms of Economic Value Added (EVA), emphasizing the importance of high-quality development for micro-enterprises in achieving broader economic goals [2][3]. Research Purpose and Significance - The report aims to assess how micro-enterprises can achieve high-quality development, which is crucial for overall economic progress [2]. - Economic Value Added (EVA) is defined as net profit minus the cost of equity capital, indicating true shareholder value creation [2][3]. Methodology - The sample for the report includes A-share non-financial companies that have been listed for at least ten years [8]. - Companies must meet specific criteria, including having unqualified audit opinions for the last three years and being in normal operational status [9][10]. - The EVA performance is measured using the Net Asset Economic Value Added Return Rate (EVAOE), which reflects the long-term shareholder value creation [14][16]. 2024 EVA Top 99 Companies - The report lists the top companies based on their EVAOE, with notable entries including: - Chongqing Beer (EVAOE: 0.297) - Kweichow Moutai (EVAOE: 0.235) - Shanxi Fenjiu (EVAOE: 0.211) [7]. New Entrants and Exits - New companies entering the 2024 list include: - Yingjia Gongjiu - Morning Light Co. - Liba Co. [20]. - Companies that dropped off the list include: - Shuanghui Development - Rongjie Co. [21]. Industry Distribution - The report categorizes the companies by industry, with the pharmaceutical manufacturing sector having the highest representation (16 companies) [25]. - Other notable sectors include electrical machinery and equipment manufacturing (14 companies) and beverage manufacturing (13 companies) [25]. Ownership Structure - The report indicates a mix of state-owned and non-state-owned enterprises among the top companies, with 22 state-controlled firms and 72 non-state-controlled firms [27]. Regional Distribution - The majority of the top companies are located in eastern China, with a notable increase in representation from provinces like Jiangsu and Guangdong [35].

Core Viewpoint - The overall market showed a collective increase, while the liquor sector experienced a decline, indicating mixed performance within the industry [1] Market Performance - The three major indices collectively rose, with the Shanghai Composite Index reaching 4002.83 points, an increase of 0.37% [1] - The liquor sector closed at 2246.58 points, down 0.89%, with 19 liquor stocks declining [1] Individual Stock Performance - Kweichow Moutai closed at 1431.58 CNY per share, down 0.93% [1] - Wuliangye closed at 118.58 CNY per share, down 1.27% [1] - Shanxi Fenjiu closed at 186.00 CNY per share, down 0.69% [1] - Luzhou Laojiao closed at 129.30 CNY per share, down 0.91% [1] - Yanghe Brewery closed at 69.19 CNY per share, down 0.63% [1] Industry Outlook - Dongxing Securities noted that short-term price fluctuations do not affect the recovery process of the industry [1] - Leading companies, particularly Kweichow Moutai, are showing strong performance that can withstand economic cycles, with signs of bottoming out becoming more evident [1]

Investment Rating - The report maintains an "Outperform" rating for the liquor industry [5][6]. Core Viewpoints - The current market for the liquor sector shows divergence, with significant year-on-year performance declines expected for liquor companies in Q3 2025. However, both valuation and holdings are at low levels, and positive factors on both supply and demand sides are increasing [1][4]. - Historical analysis from 2013-2015 indicates strong similarities between the current cycle and previous ones, suggesting that buying opportunities may accelerate [1][4]. Summary by Sections Price and Performance Trends - Most companies confirmed their stock price bottoms between Q4 2013 and Q1 2014, with performance declines starting in Q3 2013. Despite the declining performance, stock prices showed moderate reactions, following the overall market uptrend [2][7]. - The stock price performance of individual companies remains closely tied to their fundamentals, with regional leaders like Gujing and Laobaigan showing smaller declines compared to the overall market [2][13]. Company Strategies - Companies are leveraging channels to amplify brand and product advantages during the adjustment phase. High-end liquor brands focus on maintaining brand strength, with Moutai shifting its focus to customer expansion [3][32]. - Regional leaders are retreating to core markets while enhancing their presence in lower-tier markets, with companies like Yanghe and Gujing focusing on channel cultivation [3][39]. Investment Recommendations - The report suggests a two-phase recovery path for industry valuations. The first phase is driven by demand recovery, with expectations for Moutai's PE ratio to recover from 20x to 25x, corresponding to a dividend yield of about 3% [4][17]. - The second phase anticipates a return to long-term confidence in liquor assets, with industry PE potentially reaching 30x by Q4 2026. Recommended stocks include Luzhou Laojiao, Moutai, and Shanxi Fenjiu, with a watch on Wuliangye and Yanghe for potential recovery [4][5].

Investment Rating - The report indicates a negative growth trend in the white liquor industry, with a recommendation for cautious investment due to the ongoing challenges and market adjustments [2][4][6]. Core Insights - The white liquor industry experienced its first decline in overall operating performance since 2015, with a decrease in total revenue and profit among 20 A-share listed companies [4][5]. - The leading companies, such as Guizhou Moutai, Wuliangye, and Shanxi Fenjiu, showed revenue growth, while the majority of other companies faced significant sales pressure, highlighting a trend of industry differentiation [2][9]. - The industry is currently facing an imbalance in supply and demand for mid-to-high-end products, with social inventory needing further clearance [2][13]. Summary by Sections Industry Performance - In the first half of 2025, the total revenue of 20 A-share listed companies in the white liquor sector reached 241.51 billion yuan, with a year-on-year decline of 0.86% [5][12]. - Excluding Guizhou Moutai, the remaining 19 companies saw a more pronounced decline, with total revenue dropping by 6.07% [5][10]. Market Dynamics - The report notes that the white liquor industry has entered a phase of "total decline, head and shoulder concentration" since 2017, with a gradual decrease in production and sales volume among large enterprises [9][15]. - The introduction of stricter policies, such as the revised regulations on waste reduction, has significantly impacted consumer behavior and sales in the second quarter of 2025 [6][15]. Future Outlook - Short-term challenges remain, with expectations of continued downward pressure on operating performance into the second half of 2025 and potentially into 2026 [12][14]. - Long-term trends suggest a potential contraction in the industry, but opportunities for product structure optimization and increased industry concentration may support the resilience of existing listed companies [15][16].

Investment Rating - The report maintains an "Outperform" rating for the liquor industry [5][6] Core Viewpoints - The current market for the liquor sector shows divergence, with significant year-on-year performance declines expected for Q3 2025, yet both valuation and holdings are at low levels, indicating potential positive changes in supply and demand dynamics [1][4] - Historical analysis from 2013-2015 suggests that the current cycle has strong similarities, indicating that buying opportunities may accelerate [1][4] - The report anticipates a two-phase recovery in industry valuations, with the first phase driven by demand recovery and the second phase contingent on improved supply-demand relationships and market confidence in long-term liquor assets [4][17] Summary by Sections Price and Performance Analysis - Most companies confirmed their stock price bottoms between Q4 2013 and Q1 2014, with performance declines starting in Q3 2013, while stock prices remained relatively stable [2][7] - The report highlights that stock price performance is closely linked to fundamental performance, with regional leaders showing less decline compared to the overall market [2][13] Company Strategies - Companies are leveraging channels to enhance brand and product advantages during the adjustment phase, with a focus on maintaining brand strength for high-end products [3][30] - Regional leaders are concentrating on core markets and enhancing distribution channels, while expansion-oriented companies are increasing their presence in mid-to-low-end products [3][30] Investment Recommendations - The report suggests that the industry is entering a layout phase, recommending investments in stable-performing companies with long-term growth potential, such as Luzhou Laojiao, Guizhou Moutai, and Shanxi Fenjiu, while also monitoring Wuliangye and Yanghe for potential recovery [4][5]

Core Viewpoint - Zhang Kun, a prominent fund manager at E Fund, has disclosed the top ten holdings of four funds as of Q3 2025, indicating a strategic shift in investment focus towards consumer and technology sectors, while also reflecting on the long-term growth potential of China's consumption market [1][9]. Fund Holdings Summary - The combined top ten holdings of Zhang Kun's four funds include Tencent Holdings, Alibaba-W, Kweichow Moutai, Luzhou Laojiao, Shanxi Fenjiu, Wuliangye, JD Health, Yum China, CNOOC, and Focus Media [1]. - The total market value of the top holdings is as follows: - Tencent Holdings: 56.18 billion - Alibaba-W: 56.16 billion - Kweichow Moutai: 51.36 billion - Luzhou Laojiao: 51.13 billion - Shanxi Fenjiu: 50.69 billion - Wuliangye: 50.64 billion - JD Health: 45.02 billion - Yum China: 28.69 billion - CNOOC: 27.60 billion - Focus Media: 26.44 billion [2]. Changes in Holdings - Compared to Q2 2025, the only change in the top ten holdings was the exit of SF Express, replaced by Focus Media [2]. - In Q3, Zhang Kun reduced his holdings in Tencent and Alibaba by 2.465 million shares and 17.392 million shares, respectively, likely due to price increases of 31% and 61% during the quarter [5]. - In the liquor sector, there was an increase in Kweichow Moutai by 48,100 shares, while reductions were made in Luzhou Laojiao, Shanxi Fenjiu, and Wuliangye [6]. Sector Analysis - In the consumer sector, there were reductions in Luzhou Laojiao and Shanxi Fenjiu, but increases in Kweichow Moutai and Wuliangye, indicating a positive outlook on premium liquor [7]. - The new investments in Yum China and Focus Media reflect expectations of recovery in the restaurant and advertising sectors [7]. - In the technology sector, there were reductions in Tencent and Alibaba across all funds, while new positions were taken in Google-A and reductions in ASML and TSMC, indicating a shift towards more globally competitive tech giants [8]. Long-term Outlook - The team believes that China's consumption growth is likely to outpace GDP growth, supported by a low consumer spending ratio relative to GDP compared to other major economies [9]. - The potential for a unified market of 1.4 billion people offers significant scale advantages for product development and sales [9]. - The current low valuation levels provide a safety margin for investments in the domestic consumption market, which is expected to remain fertile ground for long-term investment [9].

Core Viewpoint - The Shanghai Composite Index rose to 4000 points, reflecting a 0.21% increase, while the liquor sector showed mixed performance with a slight decline of 0.09% in the afternoon session [1] Company Performance - Kweichow Moutai closed at 1447.00 CNY per share, up 0.46% - Wuliangye closed at 120.35 CNY per share, up 0.05% - Shanxi Fenjiu closed at 189.12 CNY per share, up 2.31% - Luzhou Laojiao closed at 131.16 CNY per share [1] Market Analysis - According to Huachuang Securities, the performance in different consumption scenarios varies, with business banquets showing weak demand, while mass consumption and wedding banquets remain relatively strong with a smaller decline in Q3 - There is an observed improvement in high-end gifting ahead of the festival season - Liquor companies are adopting a more pragmatic approach, accelerating adjustments to clear inventory and reduce channel pressure [1]