KWEICHOW MOUTAI(SH:600519) 3 6 Ke·2025-09-26 13:06Core Viewpoint - The low-alcohol liquor trend cannot save the liquor industry, as historical evidence shows that high-end products are the true drivers of recovery during downturns [1][2][10]. Group 1: Industry Challenges - The liquor industry has faced multiple crises, including the 1989 Asian financial crisis and the 2012 eight-point regulation, leading to a recurring trend of low-alcohol products [1][3]. - High-end liquor consumption is primarily driven by business scenarios, with Moutai's business receptions accounting for 50%, gifts 30%, and banquets 10% of its sales [3][10]. - The current push towards low-alcohol products by major liquor companies is seen as a response to shareholder pressure rather than a strategic shift [3][13]. Group 2: Low-Alcohol Liquor Dynamics - Major liquor companies are increasingly launching low-alcohol products, with some going below 30 degrees, such as Shede's 29-degree product and others planning even lower offerings [5][6]. - Historical attempts at low-alcohol liquor have not significantly impacted the industry, with high-end products being the key to recovery during past downturns [10][12]. - Low-alcohol liquor is often associated with lower quality, making it less suitable for high-end business contexts [12]. Group 3: Future Directions - The industry needs to shed the burden of short-term performance pressures and focus on creating a healthier market environment for long-term growth [4][14]. - Despite current challenges, the liquor industry has a strong underlying support due to the involvement of local state-owned enterprises, which are unlikely to let the industry fail [14]. - Companies are currently facing issues with inventory management, as evidenced by a 12.5% increase in average inventory and a rise in inventory turnover days [15].