CMS·2025-07-20 11:31Investment Rating - The report maintains a recommendation for the industry, indicating a positive outlook for the sector as a whole [5]. Core Insights - The actual demand in the liquor industry has significantly decreased in Q2 2025, with companies like Water Well and Jiu Gui Jiu showing early indicators of industry performance through their earnings forecasts [1][18]. - Moutai's establishment of a joint venture and Jiu Gui Jiu's collaboration with Pang Dong Lai for product launches reflect the multi-faceted strategies employed by major liquor companies to mitigate industry pressures and enhance annual performance [1][18]. - The beverage sector is expected to see leading water companies continue to capture market share, with Farmer Spring's market share rapidly recovering, leading to potential upward revisions in profit forecasts [1][18]. - The snack sector is facing short-term challenges due to rising costs and increased expenses, with a focus on new product launches and net profit margin improvements in the second half of the year [1][18]. - The pet sector presents a buying opportunity following recent corrections, with a focus on valuation shifts in the second half of the year [1][18]. Summary by Sections Core Company Tracking - Moutai is forming platform companies with provincial distributors to develop local cultural Moutai products, which is expected to stabilize pricing and support annual targets while alleviating pressure on the main product's volume growth [12]. - Water Well reported a 13% decline in revenue and a 57% drop in net profit for H1 2025, with significant Q2 revenue declines attributed to inventory reduction pressures and policy impacts [13]. - Jiu Gui Jiu's net profit for H1 2025 is expected to drop by 90%-93%, with a 43% revenue decline, as the company increases sales expenses and new product promotion efforts [14]. - Hai Tian Wei Ye anticipates rapid overseas growth and is enhancing its market share through localized strategies and channel expansion [15]. - Qia Qia Food's net profit is projected to decrease by 71%-76% in H1 2025, with expectations for improvement in H2 as costs normalize [16]. - Gan Yuan Food's net profit is expected to decline by 55%-56% in H1 2025, with plans to strengthen sales of new and core products in H2 [17]. Investment Recommendations - The report suggests focusing on liquor companies that are adjusting their strategies in response to market pressures, particularly those with a safety margin in valuations [18][19]. - In the beverage sector, companies like Farmer Spring and Uni-President China are expected to perform well, while traditional consumer stocks like Moutai and Lu Zhou Lao Jiao are recommended for their recovery potential [19]. - The report highlights opportunities in the snack sector with companies like Qia Qia and Gan Yuan, emphasizing the importance of new product launches and margin improvements [19].