Sou Hu Cai Jing·2025-10-25 13:11Core Viewpoint - The recent predictions from various securities firms regarding the third-quarter performance of major Chinese liquor companies, particularly in the baijiu sector, indicate a significant decline in net profits for many brands, raising concerns about the industry's stability and future growth [1][2][4]. Summary by Category Company Performance Predictions - Guotai Junan, Zheshang, and GF Securities predict that major baijiu companies will experience double-digit declines in net profits for Q3, with Wuliangye's net profit expected to drop by 45% [1][2]. - GF Securities has the most pessimistic outlook, forecasting a 50% decline for Yanghe and a 200% drop for Jiu Gui Jiu [2][3]. - Shide Jiuye is viewed positively by multiple firms, with predictions of a 20-25% increase in net profit, while Wuliangye received no positive outlook from any firm [2][3]. Market Dynamics - The baijiu industry has been undergoing an adjustment period since 2021, leading to price declines for many products, particularly affecting high-end brands like Wuliangye and Guojiao [6][7]. - The recent sales data during the "Double Festival" period showed a 20-25% decline, but this does not represent the entire quarter's performance, as companies reported stabilization in sales post-July [5][12]. Regulatory and Policy Context - The Ministry of Industry and Information Technology recently classified the baijiu industry as a "historical classic industry," which is expected to provide long-term benefits for financing, market expansion, and industry recognition [12][14]. - This classification is seen as a strategic move to enhance consumer confidence and support the industry's growth, despite short-term challenges [14]. Investor Sentiment and Reactions - The stark differences in profit predictions among securities firms have raised questions about their impartiality and the validity of their analyses, with some likening their predictions to "blind guesses" [4][5]. - Wuliangye's management expressed frustration over GF Securities' predictions, indicating a strong response to perceived inaccuracies in the analysis [5][9].