KWEICHOW MOUTAI(SH:600519)2026-01-03 08:19Investment Rating - The industry investment rating is "Overweight" [16] Core Insights - The report highlights that the consumer sector is expected to rebound as domestic demand is elevated to a strategic position. The liquor sector is accelerating its bottoming process towards supply-demand balance. The demand for soft drinks, snacks, dining, and dairy products is anticipated to improve due to travel and gift box-related consumption [3][4] Summary by Sections Investment Recommendations - The investment strategy focuses on growth as the main line, emphasizing opportunities at supply-demand clearing points. Key recommendations include: 1. Preferred stocks with price elasticity: Kweichow Moutai, Wuliangye, Luzhou Laojiao, and those expected to clear inventory: Yingjia Gongjiu, Gujing Gongjiu, Shanxi Fenjiu, Jianshiyuan, Zhenjiu Lidu, Shede Liquor, and Jinhui Liquor [8] 2. Beverage stocks benefiting from travel demand: Dongpeng Beverage, Nongfu Spring (Hong Kong), and low valuation high dividend stocks: China Foods (Hong Kong), Master Kong Holdings (Hong Kong), and Uni-President China (Hong Kong) [8] 3. Growth stocks in snacks and food raw materials: Recommended stocks include Bailong Chuangyuan, Yanjinpuzi, Weilong Delicious (Hong Kong), Three Squirrels, and Ximai Foods [8] 4. Beer recommendations: Yanjing Beer, Tsingtao Brewery, Zhujiang Beer, and Bai Run Co., Huaren Beer (Hong Kong) [8] 5. Stable condiments and livestock production capacity reduction: Recommended stocks include Qianhe Flavor Industry, Baoli Foods, Ximai Foods, Babi Foods, Anji Foods, Haitian Flavor Industry, Angel Yeast, Yili Co., New Dairy, Youran Livestock (Hong Kong), and Modern Animal Husbandry (Hong Kong) [8] Liquor Sector - The liquor sector is in a process of bottoming out, with the industry accelerating its bottoming since Q3 2025. The report suggests that the clearing of financial statements will help reduce channel inventory pressure. Looking ahead to 2026, the price movements of leading brands like Moutai and Wuliangye are expected to stimulate sales, achieving a balance between volume and price. The macroeconomic and policy environment is anticipated to catalyze positive expectations for the consumer sector, with liquor being a cyclical asset that has entered an accelerated adjustment phase [11][12] Consumer Goods - The report notes that good traffic flow during the New Year period will benefit food and beverage demand related to travel. From December 31, 2025, to January 2, 2026, the nationwide cross-regional personnel flow is expected to grow by 25.4%, 20.3%, and 13.4% year-on-year, respectively. This positive flow is likely to enhance demand for soft drinks, snacks, and dining. Additionally, the relatively late timing of the 2026 Spring Festival is expected to favor the release of gift-related demand for snacks, soft drinks, and dairy products in Q1 2026 [13][14] Profit Forecast and Valuation - The report includes a profit forecast and valuation table for key stocks as of January 2, 2026, indicating expected earnings per share (EPS) growth and price-to-earnings (PE) ratios for various companies, with Kweichow Moutai having a market cap of 172.46 billion and an EPS forecast of 75.57 yuan for 2026, reflecting a 5% CAGR [15]