31 March 2026 | 1:46AM HKT Equity Research China Consumer Staples: Spirits/F&B expert calls: sequential on-trade recovery with Moutai leading recovery; remain cautious on other spirits On Mar 30, we hosted an expert call with a large spirits and F&B distributor located in Central China. Key highlights: 1) Spirits recent updates and 2026 outlook: the expert saw c.15%+ decline post LNY and sequential narrowing in decline magnitude in Mar without a significant drop in mass consumption/banquets post LNY peak se ...

Investment Rating - The investment rating for the essential consumer goods sector in China is "Outperform" for multiple companies including Guizhou Moutai, Wuliangye, and Yili [1]. Core Insights - In March 2026, eight essential consumer goods sectors showed mixed performance, with four sectors experiencing growth and four facing declines. The sectors with positive growth included frozen foods, condiments, food services, and soft drinks, while mid-to-high-end baijiu, mass-market baijiu, dairy products, and beer saw negative growth. The overall performance is attributed to the fading of the Spring Festival consumption boost and a weakening recovery in the food service sector [20]. Summary by Sector Baijiu (Mid-to-Premium and Above) - In March, the mid-to-high-end and premium baijiu sector generated revenue of 29.5 billion yuan, a year-on-year decrease of 14.5%. Cumulative revenue for January–March reached 120.5 billion yuan, down 14.3% year-on-year. The sector is facing pressure on both volume and price due to slower-than-expected recovery in business consumption scenarios [21]. Baijiu (Mass-Market and Below) - The mass-market and lower-tier baijiu sector generated revenue of 20.2 billion yuan in March, down 1.0% year-on-year. Cumulative revenue from January to March was 60.5 billion yuan, down 1.5% year-on-year. Demand remains robust, supported by daily personal consumption and family gatherings [22]. Beer - The beer industry generated revenue of 14.0 billion yuan in March, down 1.4% year-on-year. Cumulative revenue for January–March was 46.2 billion yuan, down 1.5% year-on-year. Terminal demand was weak, but the sector is entering a peak season stockpiling cycle as temperatures rise [22]. Condiments - The condiments industry generated revenue of 35.5 billion yuan in March, a 3.0% year-on-year increase. Cumulative revenue for January–March reached 123.9 billion yuan, a 4.0% year-on-year increase. The growth rate slowed due to waning peak season effects and increased discounts [23]. Dairy Products - The dairy industry generated revenue of 33.9 billion yuan in March, down 0.9% year-on-year. Cumulative revenue for January–March reached 118.9 billion yuan, down 1.9% year-on-year. The liquid milk market is in a period of adjustment, with household consumption remaining robust [24]. Frozen Foods - The frozen food sector generated revenue of 10.3 billion yuan in March, up 6.3% year-on-year. Cumulative revenue for January–March reached 39.3 billion yuan, up 7.9% year-on-year. Demand for dining out has improved, significantly boosting the sector [25]. Soft Drinks - The soft drink industry generated revenue of 48 billion yuan in March, up 3.2% year-on-year. Cumulative revenue for January–March reached 194 billion yuan, up 1.9% year-on-year. Discounts in the soft drink market have widened, reflecting intensified competition [27]. Catering - The food service industry generated revenue of 13.8 billion yuan in March, up 3.8% year-on-year. Cumulative revenue for January–March reached 44 billion yuan, up 3.6% year-on-year. The sector has benefited from the recovery of consumption scenarios and policy support [28].

Group 1: Industry Development and Market Position - The white liquor industry is experiencing a cyclical adjustment, but long-term growth is expected due to strengthened underlying support and favorable policies [3][4]. - The government has recognized the liquor industry as a "historical classic industry," marking a significant policy shift that will benefit the sector [3]. - Wuliangye's leading position in the market is expected to be further solidified, benefiting from national policies aimed at cultural heritage and quality upgrades [3]. Group 2: Sales Performance and Brand Strategy - The core products of Wuliangye achieved strong sales during the Yuan Chun period, driven by a focus on market share and differentiated operations [4][5]. - Digital tools have enhanced channel management, allowing for precise identification of sales opportunities and dynamic adjustments to inventory [4]. - Consumer engagement strategies, such as QR code promotions, have strengthened customer loyalty and provided valuable consumer data for targeted marketing [5]. Group 3: Marketing and Product Matrix - The year 2026 is designated as the "Year of Marketing Innovation," focusing on enhancing brand value and executing effective market strategies [6]. - Wuliangye's product matrix includes a core high-end product and various sub-brands to cater to different consumer segments and price points [6][7]. - The company emphasizes a balanced approach to volume and pricing, ensuring the leading position in the premium segment [7]. Group 4: Channel Strategy and Consumer Engagement - The company is enhancing its channel strategy by focusing on traditional, emerging, and e-commerce channels to reach consumers effectively [9]. - Traditional channels are being optimized through immersive retail experiences and new store formats targeting younger demographics [9]. - E-commerce initiatives include partnerships with major platforms and the establishment of instant retail channels to improve consumer access [9]. Group 5: Shareholder Returns and Financial Commitment - Wuliangye is committed to maintaining its dividend policy as outlined in the 2024-2026 shareholder return plan, ensuring shareholder rights are protected [10].

11 and 1 E 资料 图。本文来源：澎湃新闻 记 者 丁欣晴 易方达基金张坤旗下三只产品遭自家员工减持 2025年下半年，张坤首次建仓了多只"潜力股"。 3月31日，"顶流"基金经理、易方达基金张坤披露了在管基金2025年报，其隐形重仓股也随之曝光。 具体来看，张坤旗下几只基金首次建仓新产业、网易云音乐、摩尔线程-U、沐曦股份、亚朵等多只标的；并大手笔增持了香港交易所。与此同时，部分海外半导体标的遭到明 显减持，SK海力士、阿斯麦、科天半导体均在减仓行列。 除基金经理调仓动作外，澎湃新闻记者注意到，产品年报中还显现了另一关键信号：对比 2025年年中时披露的基金份额持有人数据，易方达基金内部从业人员在去年下半 年，对张坤管理的易方达亚洲精选、易方达蓝筹精选、易方达优质企业三年持有三只产品，均实施不同比例减持，其中单只产品最高减持份额超905万份。 | | | 张坤旗下4只基金员工持有份额对比 | | | | --- | --- | --- | --- | --- | | 证券代码 | 证券简称 | [报告期] 2025 年报 | 管理人员工持有份额 管理人员工持有份额 [报告期] 2025 中报 | 减 ...

Core Viewpoint - The article highlights the innovative strategies and product offerings of Wuliangye at the 114th National Sugar and Wine Products Fair, showcasing its commitment to blending tradition with modernity and targeting younger consumers through unique experiences and collaborations [2][14][20]. Group 1: Exhibition Highlights - Wuliangye presented a "boundaryless exhibition" design that integrates visual attraction, cultural transmission, and business negotiation, transforming the booth into an interactive space for deep brand engagement [5][6]. - The exhibition featured a "Water and Sky Brewing" installation that created an immersive experience, allowing visitors to interact with the brand's philosophy [6][9]. - The "29° Wuliangye - One Glance in Love" area attracted significant attention from younger consumers, showcasing a romantic design and offering cocktail tastings that received positive feedback [6][10]. Group 2: Cultural and Historical Presentation - The booth's design was inspired by ancient Chinese artifacts, symbolizing cultural connection and the brand's commitment to tradition [9][10]. - An interactive area displayed the evolution of Wuliangye products from the first to the eighth generation, allowing visitors to engage with the brand's history through multimedia presentations [10][11]. - The "Craftsmanship" section highlighted the stories behind the zodiac-themed products, emphasizing the brand's cultural significance and product strength [10][11]. Group 3: Product Innovation and Market Strategy - Wuliangye introduced three strategic products tailored for the dining channel, aligning with trends in light drinking, new beverages, and health-conscious consumption [14][20]. - The collaboration with FIFA for the 2026 World Cup showcased Wuliangye's strategy to merge sports culture with traditional Chinese liquor, enhancing its global appeal [14][18]. - The company aims to capture significant market segments by focusing on product innovation and expanding consumer engagement through interactive experiences [14][20]. Group 4: Recognition and Future Outlook - Wuliangye received the "Global Fashion Award" at the 2026 China Duty Free Group Global Partner Conference, affirming its international influence and innovative approach [18][20]. - The company is building a collaborative ecosystem with various industry partners, aiming for a comprehensive strategy that supports its growth in the global market [20]. - Wuliangye's future plans include a focus on product innovation, targeting key market segments, and promoting Chinese liquor on a broader international stage [20].

Investment Rating - The report maintains a "Buy" recommendation for the liquor industry, indicating a positive outlook for investment opportunities in the sector [2]. Core Insights - The 2026 Spring Sugar Conference showed a decline in overall participation and interest in traditional exhibitions, while new retail and new liquor formats gained significant traction, reflecting a generational shift in consumer preferences [2][12]. - The report suggests that 2026 marks not only a bottoming out of the liquor cycle but also the beginning of a new era in the industry, driven by changes in consumer behavior and market dynamics [3][8]. Summary by Sections Spring Sugar Conference Observations - The number of participating liquor companies and attendees decreased, with major brands like Moutai and Wuliangye absent from hotel exhibitions, leading to a shift towards smaller brands [12]. - There is a notable increase in interest in new retail and new liquor formats, indicating a shift in consumer focus towards product quality and convenience [12][15]. Thoughts on 2026 - The report emphasizes the need for liquor companies to focus on direct consumer engagement and efficiency, moving away from traditional channel-centric models [19]. - It highlights that the worst phase for the industry is believed to be over, with improvements in cash flow and inventory levels among distributors [28]. Industry Feedback - Sales declines have narrowed, with regional disparities still present; the report notes that the liquor industry is entering a phase of differentiation as it stabilizes [39]. - The report indicates that while high-end brands like Moutai and Wuliangye are performing well, lower-tier brands are struggling with inventory issues [40]. Individual Company Feedback - Moutai and Wuliangye are noted for their strong sales performance, with Moutai's pricing remaining robust and Wuliangye planning to reduce channel expenses while maintaining price stability [25][32]. - Other brands like Fenjiu and Gujing are also highlighted for their strategic adjustments and market performance [25]. Investment Recommendations - The report recommends focusing on Moutai for its strong operational certainty and high dividend yield, as well as Wuliangye for its exceeding sales expectations [9]. - It suggests monitoring brands like Gujing and Fenjiu for their potential recovery and market responsiveness [9].

Investment Rating - The industry investment rating is "Positive" (maintained) [6] Core Insights - The white liquor industry is showing clear signs of bottoming out, with high discussion around Moutai and Wuliangye. The second half of 2026 is expected to see marginal improvements as consumption gradually recovers, with performance adjustments starting from Q3 2025 due to policy impacts [1][2] - There is a strategic divergence in pricing and volume among liquor companies, with Moutai and Wuliangye opting for price adjustments to boost sales, while others like Guojiao 1573 maintain pricing strategies to uphold brand strength. Both strategies are deemed correct based on individual company circumstances [1][2] - The market is expected to see polarized growth between first-tier brands and regional brands, while mid-tier brands face pressure. The price range of 50-300 RMB is expanding significantly, indicating a growth in mass consumption [1][2] - The trend towards consumer-centric approaches is evident, with companies focusing on direct sales and deep market engagement. Moutai is leading the industry in embracing consumer demands and expanding its customer base [2] - New product launches are aligning with emerging trends, including high cost-performance, low-alcohol options, and products targeting younger and female consumers. The low-alcohol market is projected to exceed 74 billion RMB by 2025, with a compound annual growth rate of 25% [2][3] - The potential drinking population aged 18-30 in China is approximately 490 million, contributing over 400 billion RMB to the market, with new drinking options being favored by this demographic [3] Summary by Sections - **Market Dynamics**: The industry is preparing for an adjustment period, with expectations of performance recovery in the second half of 2026. The strategic choices of liquor companies vary, with some focusing on volume growth through pricing adjustments while others maintain price stability to protect brand equity [1][2] - **Consumer Trends**: There is a notable shift towards consumer-centric strategies, with a focus on direct sales and market engagement. The rise of low-alcohol products and the targeting of younger and female consumers are key trends shaping the market [2][3] - **Investment Recommendations**: The report suggests continuing to favor Moutai, while also monitoring Wuliangye, Luzhou Laojiao, and other brands with strong market attributes [4]

Summary of Key Points from Conference Call Records Industry Overview - **Consumer Sector Recovery**: The consumer sector is showing a clear recovery path, particularly in service consumption (travel, dining) which is performing strongly. The demand for leading liquor brands like Moutai and Wuliangye has exceeded expectations, with industry pressure expected to ease starting Q2 2026, leading to a full recovery in sentiment by then [1][3][4]. - **Household Appliances and Liquor Leaders**: Major brands such as Midea and Gree are outperforming in terms of shipment volumes compared to smaller brands. Moutai and Wuliangye have shown significant sales growth, with Moutai's payment progress up 10 percentage points year-on-year [1][3][4]. - **Light Industry and New Consumption**: The two-wheeler sector is bottoming out due to the "oil-to-electric" transition. Companies in personal care and beauty, as well as leading firms in the real estate chain, are expected to see significant differences in performance [1][5][6]. - **Food and Beverage Focus**: The food and beverage sector is concentrating on high-growth areas such as the restaurant supply chain and health products, with companies like Anjuke and Yihai being core investment targets [1][10][11]. Key Insights and Arguments - **Investment Strategy for 2026**: The investment strategy should focus on two main lines: service consumption and leading enterprises, especially in the first half of the year. Leading companies typically show stronger resilience and recovery first, outperforming smaller brands [4][10]. - **Household Appliances Market Dynamics**: In the household appliance sector, leading brands are expected to benefit from subsidy policies favoring offline channels. The trend of concentration among leading brands is evident across various categories, including vacuum robots and small appliances [4][10]. - **Light Industry Investment Logic**: The light industry is seeing a focus on companies at the bottom of the market for domestic sales, while for exports, companies with quality production capacity are being targeted. Specific recommendations include companies like Jeya and Nobon for non-woven fabric [5][6]. Additional Important Content - **Eli Lilly's GLP-1 Drug Developments**: Eli Lilly's oral GLP-1 drug is expected to receive FDA approval in April 2026, showing superior efficacy compared to competitors and a strong supply chain demand. The drug's production involves complex synthesis and is expected to benefit companies capable of supplying raw materials [11][12][13]. - **Swine Breeding Sector Challenges**: The swine breeding sector is currently facing significant challenges, with prices for pigs and piglets dropping below cost lines, leading to deep losses across the industry. This situation is seen as an opportunity for left-side layout investments, particularly in leading cost-efficient companies like Muyuan and Wens [2][14][15][16]. Conclusion - The consumer sector is poised for recovery, with specific focus areas in service consumption and leading brands across various industries. Investment strategies should prioritize resilience and growth potential in leading companies, while also considering emerging opportunities in sectors like light industry and pharmaceuticals. The swine breeding sector presents a unique investment opportunity despite current challenges, emphasizing the importance of cost management and competitive advantage.

Summary of Key Points from the Conference Call Industry Overview - The liquor industry is currently in the latter half of a bottoming phase, with total adjustments not yet reaching an upward turning point, and it is expected that the cycle will take several more quarters to clear [1][7] - The liquor instant retail market is expected to exceed 50 billion yuan by 2025, becoming the third-largest channel after traditional distribution and e-commerce [1][4] - The consumption of liquor is showing trends of lower alcohol content and younger demographics, with strategic products like 29-degree Wuliangye and 38-degree Guojiao gaining traction [1][4] Key Trends in Food and Beverage - The soft drink sector is experiencing differentiation, with electrolyte water projected to reach nearly 20 billion yuan by 2025, while 100% pure juice is growing at 26%, contrasting with the double-digit decline in low-concentration juices [1][3] - The condiment sector is benefiting from the recovery of the restaurant industry, with growth rates in January-February 2026 reaching a 10-month high, and an industry turning point expected in Q2-Q3 due to low base effects [1][9] - The snack channel remains vibrant, with a SKU iteration rate of 10%-15%, and konjac products gaining popularity due to health trends [1][12] Changes in Market Dynamics - The 2026 Spring Sugar and Wine Fair showed a weaker overall performance compared to previous years, with leading liquor companies like Moutai and Wuliangye reducing or canceling hotel exhibitions, while smaller companies remained active in seeking market opportunities [2][5] - The food sector saw higher engagement and interest, particularly in new categories that combine technology and health concepts [2][3] Product Innovation and Consumer Trends - The liquor industry is seeing a shift towards product innovation focusing on lower alcohol content, health-oriented products, and appealing to younger consumers [4][7] - The introduction of IP collaborations in the food sector, such as the partnership between traditional food brands and popular IPs, indicates a trend where content assets are becoming part of the core supply chain [3] Competitive Landscape and Future Outlook - The soft drink industry is facing increased competition and rising costs, particularly with PET packaging prices, leading to a concentration of market share among leading companies [11] - The beer sector is witnessing a focus on major brands and product innovation, with a notable increase in cross-category flavors [8][9] - The condiment sector is expected to continue its recovery, driven by the restaurant industry's resurgence and the growth of compound condiments [9] Investment Recommendations - For the liquor sector, investment should focus on brands with price elasticity such as Moutai, Wuliangye, and Luzhou Laojiao, while also considering companies like Yingjia Gongjiu and Gujing Gongjiu that may benefit from market clearing [13] - In the condiment sector, attention should be given to leading companies with strong product and channel capabilities, as well as those with expected price increases and high dividend yields [13] - The beer sector should focus on companies with national capabilities and strong dividend policies, while the dairy sector should consider leading dairy companies as the industry cycle bottoms out [13] - For beverages, snacks, and food raw materials, investment logic should center on leading enterprises such as Dongpeng Beverage, Nongfu Spring, and others [13]

Summary of Wuliangye Yibin Investor Meeting Company Overview - **Company**: Wuliangye Yibin (000858.SZ) - **Market Cap**: Rmb393.1 billion / $57.0 billion - **Enterprise Value**: Rmb279.9 billion / $40.8 billion - **Industry**: China Consumer Staples Key Points from the Investor Meeting 1. **Transitional Year**: The company emphasized that 2026 will be a transitional year, focusing on supporting wholesale price recovery, cleaning up channel inventory, and controlling shipments throughout the year [1][2] 2. **Strong Retail Performance**: Notable retail performance during the Lunar New Year (LNY) of 2026, with sales up significantly compared to 2024 and 2025, which was under shipment control [1] 3. **Shareholder Returns**: The company is committed to delivering consistent shareholder returns and may roll over the shareholder return plan from 2027 due to solid cash flow and approximately Rmb120 billion in net cash [1] Additional Insights 1. **Digitalization Impact**: Digital tools have improved the assessment of distributors' capabilities and retail pace, allowing for more accurate quota allocation and shipment control [2] 2. **Support for Wholesale Prices**: The company plans to support wholesale prices during the slack season from April to July through scientific volume control [2] 3. **Direct Sales Success**: Direct sales measures have shown strong results, particularly in new retail and eCommerce, enhancing management of specialty stores [2] 4. **Banquet Market Performance**: The company gained significant market share in banquet markets during LNY, particularly from sauce-flavored liquor in regions like Guangdong [2] Price Target and Risks 1. **Price Target**: The 12-month target price is set at Rmb133, based on a 20x P/E ratio for 2027E, discounted back to end-2026E at a 7.8% cost of equity [3] 2. **Downside Risks**: Key risks include potential consumption tax rate hikes, competition from Moutai-flavor brands, and intensifying competition in the high-end spirits market [3] Financial Projections - **Revenue Forecasts**: - 2024: Rmb89.2 billion - 2025E: Rmb71.2 billion - 2026E: Rmb69.4 billion - 2027E: Rmb77.0 billion [7] - **EBITDA Forecasts**: - 2024: Rmb41.8 billion - 2025E: Rmb31.5 billion - 2026E: Rmb31.9 billion - 2027E: Rmb36.9 billion [7] - **EPS Forecasts**: - 2024: Rmb8.21 - 2025E: Rmb6.24 - 2026E: Rmb6.27 - 2027E: Rmb7.15 [7] Conclusion Wuliangye Yibin is positioning itself for a strong recovery in 2027 after a transitional 2026, with a focus on retail performance, digitalization, and shareholder returns. The company faces risks from tax changes and competition but maintains a solid financial outlook with significant cash reserves.