Group 1 - The Chinese liquor industry is undergoing a deep adjustment, prompting companies to reflect on how to appeal to the new generation of consumers [1] - Major liquor companies, including Wuliangye and Luzhou Laojiao, are launching low or ultra-low alcohol products in response to changing consumer preferences [1] - The president of the China Alcoholic Drinks Association, Song Shuyu, stated that the current low-alcohol trend cannot yet be considered a true trend, emphasizing the need for deeper understanding of young consumers' preferences [1] Group 2 - Luzhou Laojiao announced the successful development of a 28-degree liquor product, while Gujing Gongjiu launched a 26-degree product, and Wuliangye and Shede Liquor introduced 29-degree products [1] - The industry is entering an era characterized by rational attitudes, consumption, and behavior regarding drinking, necessitating new strategies for engagement with younger consumers [1] - The upcoming 23rd China International Wine Expo will shift focus from product display to consumer interaction and exploration of new consumption scenarios, including the introduction of trendy drinking culture [2]

Investment Rating - The report maintains an "Outperform the Market" rating for the food and beverage sector [1][4][5]. Core Views - High-end liquor prices continue to face pressure, with a focus on the performance during the traditional peak season [2][10]. - The beer industry is awaiting demand recovery, with recommendations for leading brands like Yanjing Beer and China Resources Beer [13][14]. - The overall food and beverage sector saw a 1.21% increase in the week of September 8 to September 12, 2025, underperforming the Shanghai Composite Index by 0.31 percentage points [19][20]. Summary by Sections 1. Liquor Industry - High-end liquor prices, including Feitian Moutai and Wuliangye, have decreased, while the price of Gaoduzhongjiu has remained stable [11][12]. - The report suggests that the traditional double festival consumption atmosphere has not yet gained momentum, leading to weak demand [2][11]. - Recommendations include focusing on companies with strong anti-cyclical performance, such as Shanxi Fenjiu and Gujing Gongjiu, and those with strong cyclical attributes like Luzhou Laojiao [12][2]. 2. Beer Industry - The beer sector is experiencing healthy inventory levels and is expected to see demand recovery as regulatory impacts on consumption fade [13][14]. - Recommendations include Yanjing Beer and China Resources Beer, which are positioned well for growth [13][14]. 3. Snack and Seasoning Products - The snack industry is shifting from channel-driven growth to category-driven growth, with a focus on strong brands like Wei Long and Yan Jin [14][15]. - The seasoning industry shows signs of improvement, with leading companies like Haitian and Yihai International expected to benefit from a recovery in the restaurant sector [15]. 4. Frozen Foods and Dairy Products - The frozen food sector is seeing a trend towards industrialization, with a focus on pre-prepared dishes [16]. - The dairy sector is expected to recover gradually, with leading companies like Yili and New Hope Dairy showing signs of improvement in 2025 [17]. 5. Beverage Sector - The beverage industry continues to thrive, with a reported 18% year-on-year revenue growth in Q2 2025, driven by demand for sugar-free tea and energy drinks [18]. - Recommendations include leading brands like Nongfu Spring and Dongpeng Beverage, which are expanding their market presence [18].

Market Overview - The liquor sector experienced a slight decline of 0.13% on September 15, with Gujing Gongjiu leading the drop [1] - The Shanghai Composite Index closed at 3860.5, down 0.26%, while the Shenzhen Component Index rose by 0.63% to 13005.77 [1] Individual Stock Performance - Shede Liquor saw an increase of 1.57%, closing at 67.19, with a trading volume of 125,000 shares and a transaction value of 834 million yuan [1] - Shanxi Fenjiu rose by 0.77% to 207.85, with a trading volume of 42,300 shares and a transaction value of 880 million yuan [1] - Guizhou Moutai slightly decreased by 0.06%, closing at 1515.10, with a trading volume of 25,800 shares and a transaction value of 3.902 billion yuan [1] - The largest decline was seen in Gujing Gongjiu, which fell by 1.48% to 168.08, with a trading volume of 31,000 shares and a transaction value of 523 million yuan [2] Capital Flow Analysis - The liquor sector experienced a net outflow of 835 million yuan from institutional investors, while retail investors saw a net inflow of 462 million yuan [2] - The data indicates that speculative funds had a net inflow of 373 million yuan [2] Detailed Capital Flow for Selected Stocks - Shede Liquor had a net inflow of 25.62 million yuan from institutional investors, while retail investors had a net outflow of 23.01 million yuan [3] - Shanxi Fenjiu saw a net inflow of 8.02 million yuan from institutional investors, with retail investors contributing a net inflow of 25.37 million yuan [3] - Gujing Gongjiu experienced a net outflow of 800,000 yuan from institutional investors, while retail investors had a net inflow of 490,000 yuan [3]

Core Insights - The core viewpoint of the report indicates that Wuliangye's net profit attributable to shareholders for the first half of 2025 is projected to be 19.492 billion yuan, reflecting a year-on-year increase of 2.28% [1] - The report highlights a notable decline in net profit for Q2 2025, which is expected to be 4.632 billion yuan, showing a year-on-year decrease of 7.58% [1] Revenue Performance - The company's revenue growth in the first half of 2025 is described as relatively stable, with significant sales growth in the series liquor segment [1] - The top five distributors contributed a total sales revenue of 30.061 billion yuan in H1 2025, compared to 10.698 billion yuan in the same period last year, indicating substantial growth [1] Regional Analysis - Revenue performance varies by region, with the eastern region showing stronger results, while the southern and northern regions experienced slower growth compared to the overall company performance [1] - The number of distributors in the eastern and northern regions saw a slight decrease, with a year-on-year reduction of 19 and 5 distributors respectively, while the southern region gained 4 new distributors [1] Future Outlook - The company plans to align its revenue growth target for 2025 with macroeconomic indicators [1] - Earnings per share (EPS) for 2025 and 2026 are projected to be 8.36 yuan and 8.83 yuan respectively, with corresponding price-to-earnings (PE) ratios of 15 and 14 times, maintaining a "buy" rating [1]

Group 1 - Wuliangye deeply integrated into the second Golden Panda Awards, which took place in Chengdu on September 12-13, promoting cultural exchange through the "liquor + film" cross-industry collaboration [1][2] - The Golden Panda Awards received submissions from 126 countries and regions, totaling 5,343 works, with 3,910 overseas entries, accounting for 73.2% [2] - The event featured various activities, including the Golden Panda Night and the Golden Panda International Cultural Forum, aimed at fostering communication among cultural figures [1][2] Group 2 - The Golden Panda Night showcased traditional Sichuan opera performances and highlighted Wuliangye's products, emphasizing the blend of Chinese liquor culture and film art [3] - The event included the unveiling of the Golden Panda commemorative liquor, designed by a prominent artist, symbolizing the elegance of Eastern aesthetics [4] - The awards ceremony recognized outstanding works in film, television, and animation, with notable winners including "Nezha 2" for Best Animated Feature and the Italian film "Tomorrow" for Best Film [6] Group 3 - Wuliangye's cultural initiatives align with the Golden Panda Awards' mission to promote a shared human destiny, enhancing its international presence through various global cultural events [5] - The company has been actively involved in promoting Chinese liquor culture on international platforms, including hosting cultural exchange activities in Hong Kong and Tokyo [5] - The collaboration between Wuliangye and the Golden Panda Awards is seen as a significant step towards fostering cross-cultural dialogue and mutual understanding [6]

Investment Rating - The report maintains a "Recommended" investment rating for the food and beverage industry [9] Core Viewpoints - The liquor sector has seen companies initiate performance clearing in Q2, with adjustments in channels and product structures. The performance aligns with market expectations, and Q3 shows signs of marginal recovery in sales [6][58] - The prepared food sector is expected to benefit from the upcoming public consultation on food safety standards, which will enhance industry self-regulation and favor leading brands [7][59] - The new consumption sector is supported by initiatives from platforms like Gaode, which aims to boost offline dining through substantial subsidies [8][60] Summary by Sections Industry News - Gaode will distribute over 1 billion yuan in subsidies to encourage in-store consumption [19] - The draft of the national food safety standard for prepared dishes has passed review [19] - Alcohol prices have decreased by 2.0% year-on-year from January to August [19] Investment Insights - Liquor Sector: Companies like Guizhou Moutai, Wuliangye, and Luzhou Laojiao are recommended for their high dividend yields and cyclical advantages [6][58] - Prepared Food Sector: The new food safety standards are expected to clarify the definition and scope of prepared dishes, benefiting leading brands like Anjifood and Qianwei Central Kitchen [7][59] - New Consumption Sector: The introduction of Gaode's "Street Ranking" and support plans is anticipated to increase foot traffic in restaurants [8][60] Key Company Focus and Earnings Forecast - The report highlights key companies in the liquor sector, including Luzhou Laojiao, Gujing Gongjiu, and Wuliangye, all rated as "Buy" with projected earnings per share (EPS) growth [11][12] - In the prepared food sector, companies like Anjifood and Longda Meishi are noted for their potential growth due to industry standards [7][59]

Core Viewpoint - The Chinese liquor industry is undergoing a deep adjustment, prompting major companies to reflect on how to appeal to the new generation of consumers, leading to the introduction of lower-alcohol products [1][3]. Industry Trends - Major liquor companies, including Wuliangye and Luzhou Laojiao, have launched low or ultra-low alcohol products in response to changing consumer preferences [1]. - The industry is currently in a "three rationality" era, characterized by rational attitudes towards drinking, rational consumption, and rational drinking behavior [3]. Consumer Insights - The industry needs to better understand the preferences and behaviors of younger consumers, as current research on their drinking habits is lacking [3]. - Young consumers are not averse to alcohol but are disinterested in traditional drinking culture [3]. Event Adjustments - The upcoming 23rd China International Wine Expo will shift its focus from product display to consumer interaction and exploration of new consumption scenarios, including the introduction of trendy drinking culture elements [3].

Core Insights - The 2025 China International Service Trade Fair (CIFTIS) opened on September 10, with Wuliangye (000858) participating as the "Global Partner" and "Designated Liquor" [1][2] - Wuliangye showcased an immersive exhibition experience, combining product tasting, intangible cultural heritage interaction, and fun activities to engage visitors [1][4] - The company aims to innovate and embrace new consumption trends, transforming traditional liquor into a medium for expressing lifestyle attitudes among younger consumers [1][5] Group 1: Event Participation and Brand Strategy - Wuliangye has been a continuous participant in CIFTIS for three years, highlighting its commitment to global service trade and brand strategy [2][9] - The exhibition featured dual storytelling, showcasing Wuliangye's historical journey and its evolution alongside Chinese society [2][3] - The brand's cultural depth and international vision were emphasized through innovative interactions to enhance brand recognition and emotional connection [2][3] Group 2: Product Innovation and Consumer Engagement - The newly launched 29° Wuliangye "Crush on You" cocktail has gained popularity, reflecting the brand's focus on appealing to younger consumers [3][6] - Wuliangye's outdoor interactive experience area combined wine tasting, food, and cultural elements, attracting significant visitor participation [4][5] - The company is actively pursuing product innovation, including low-alcohol options to cater to younger demographics and international markets [6][7] Group 3: Cultural Integration and Global Influence - Wuliangye is leveraging its "Harmony and Beauty" culture to connect with global consumers and enhance its international brand presence [8][9] - The brand has participated in high-profile international events, promoting Chinese liquor culture and its own products [8][9] - Wuliangye's brand value and international influence have been recognized, ranking 73rd in the 2025 Global Brand Value 500 list [9]

Core Insights - The overall performance of Sichuan A-share listed companies in the first half of 2025 shows a total revenue of 549.6 billion yuan, a year-on-year increase of 2.61%, and a net profit attributable to shareholders of 56.4 billion yuan, with a growth rate of 7.02% [2] Group 1: Traditional Industries - The food and beverage sector, particularly the liquor industry, has shown robust performance, with Wuliangye leading with a net profit of 19.49 billion yuan and a sales gross margin of 99.52% [2] - Luzhou Laojiao follows with a net profit of 7.66 billion yuan and a sales gross margin of 87.09% [2] - Shede Distillery reported a net profit of 443 million yuan with a sales gross margin of 65.71% [2] Group 2: Emerging Sectors - New energy sectors faced challenges, with Tongwei Co. reporting a net loss of 4.96 billion yuan due to a 42% drop in photovoltaic silicon material prices [2] - Emerging sectors like military, communication, and hydrogen energy have shown rapid growth, with Shudao Equipment's net profit soaring by 5972.30% to 10.15 million yuan [2] - NewEase's net profit reached 3.94 billion yuan, a year-on-year increase of 355.68%, driven by a 350% increase in shipments of high-speed optical modules [2] Group 3: R&D Investment - Total R&D expenses for the 179 Sichuan companies reached 12.35 billion yuan, a year-on-year increase of 12.3%, significantly outpacing revenue growth [2] - Tongwei invested 533 million yuan in photovoltaic technology, while Dongfang Electric increased R&D spending by 16.45% focusing on hydrogen energy projects [2] Group 4: Performance Disparity - There is a notable performance disparity among Sichuan companies, with leading firms like Sichuan Changhong achieving a revenue of 56.7 billion yuan and a net profit increase of 78.6% [2] - Conversely, companies like *ST Lihang and *ST Zhisheng reported losses of 44.57 million yuan and 32.88 million yuan, respectively, highlighting the challenges faced by some firms [2] - 41% of the 179 companies experienced a net profit decline of over 10% year-on-year, indicating significant pressure from macroeconomic conditions and market competition [2][3]

Investment Rating - The report maintains a "Positive" rating for the liquor sector [3]. Core Insights - The report highlights significant month-on-month sales growth for Moutai in August, with terminal sales in various regions increasing by 15%-35%. It suggests that while there may be pressure on sales during the upcoming double festival, there is potential for improvement, presenting a configuration opportunity for the sector [1][5]. - The consumer goods sector continues to embrace new consumption trends, with strong performance in soft drinks, beer, and condiments, while the liquor sector shows signs of pressure with noticeable deceleration in performance [1][2]. - Recommendations include focusing on leading brands in the liquor sector, such as Moutai, Shanxi Fenjiu, and Wuliangye, while also highlighting consumer goods companies like Weidong, Wanchen Group, and Dongpeng Beverage [1][2][13]. Summary by Sections Liquor Sector - Moutai's sales in August showed significant month-on-month growth, with terminal sales increasing by 15%-35% across multiple regions. The report anticipates pressure on sales during the double festival but expects a month-on-month improvement, indicating potential configuration opportunities [1][5]. - The report recommends prioritizing leading brands in the liquor sector, specifically Moutai, Shanxi Fenjiu, and Wuliangye, while also suggesting brands with strong market share and lower valuations such as Zhenjiu Lidu and Luzhou Laojiao [1][13]. Consumer Goods Sector - The consumer goods sector is advised to continue capitalizing on new consumption trends. Despite recent adjustments in the new consumption sector due to capital rotation and high valuation pressures, the long-term trend remains positive with clear opportunities for sustainable investment [2][17]. - Recommended stocks include Wanchen Group, New Dairy, Weidong, and Qingdao Beer, among others, while also highlighting potential stocks like Jindaiwei and Tea Baidao [2][17]. Market Performance - From September 8 to September 12, the CSI 300 index rose by 1.38%, with the meat products sector (+2.79%) and liquor sector (+1.73%) leading the gains, while beer (-0.98%) and other liquor categories (-0.83%) experienced declines [2][22]. - The report notes that the liquor sector's valuation has adjusted, with the liquor sector currently at 19.82 times earnings, indicating a potential for value investment [27].