Zhi Tong Cai Jing·2025-11-06 00:48Core Viewpoint - The liquor sector has underperformed significantly since 2025, with a weak market outlook expected to stabilize in the second half of 2026, presenting potential bottom-fishing opportunities for investors [1][3]. Summary by Category Liquor Industry Performance - Since 2025, the liquor sector's stock prices have been weak, severely lagging behind market indices, with a notable decline in sales and profit margins due to sluggish domestic demand and tightened regulations [2]. - From the beginning of 2025 to October 31, 2025, the CITIC liquor index decreased by 4.6%, underperforming the CSI 300 index by 22.5 percentage points and the Wind All A index by 30.9 percentage points [2]. - In Q3 2025, listed liquor companies reported total revenues of 78.7 billion yuan, a year-on-year decline of 18.4%, and a net profit of 28.1 billion yuan, down 22.1% year-on-year [2]. Future Outlook for Liquor - CITIC Securities predicts that the second half of 2025 will mark the bottom of the liquor industry's fundamentals, with expectations for stabilization in sales, prices, and market sentiment in 2026 [3]. - The current price-to-earnings (P/E) ratio for the liquor sector is approximately 20x, indicating a long-term bottoming out, reflecting significant pessimism in market expectations [3]. - Major liquor companies have been increasing shareholder returns, with dividend rates generally above 65%, enhancing investment safety margins [3]. Beer Industry Insights - The beer industry is expected to see flat to slightly declining revenues and profits in 2026 due to challenges such as fragmented consumer demand and channel transformations [4]. - The shift from price to quality in the beer sector may lead to market share erosion for leading companies unless they adapt effectively to industry trends [4]. - Cost increases in the coming year will impact pricing strategies, which will be crucial for the performance of beer companies [4].