Investment Rating - The report maintains a "Positive" investment rating for the tea beverage industry [6]. Core Insights - The tea beverage industry has evolved into a trillion-yuan new consumption sector, driven by product cycles and changing consumer demands [20][24]. - The industry is experiencing a shift from basic functional needs to more complex demands, including product, experience, social, and brand needs [24]. - There is significant growth potential in both domestic and international markets, particularly in lower-tier cities and Southeast Asia [31][45]. Summary by Sections 01 Consumption: A Product of Economic and Demographic Cycles - The report outlines the correlation between economic cycles and consumer spending, highlighting that per capita GDP growth has shifted from 14% during the reform era to 7% in the high-quality development era [13]. - It identifies key factors influencing consumption, including income expectations, demographic structure, and economic conditions [16]. 02 Tea Beverage Industry: Space, Structure, and Barriers - The current market for ready-to-drink tea has reached a scale of over 100 billion yuan, with a compound annual growth rate (CAGR) of 27% from 2015 to 2018 [21]. - The demand for tea beverages has evolved, with consumers now seeking products that fulfill multiple needs beyond basic functionality [24]. - The report predicts that by 2030, the number of tea beverage stores could reach between 42,800 to 94,400, depending on market conditions, with a five-year CAGR of 11% to 21% [37]. - The competitive landscape shows that lower-priced products are gaining market share, with the average price point for tea beverages narrowing [49]. 03 Investment Recommendations - The report suggests focusing on tea beverage companies that have growth potential, a favorable competitive landscape, and operational barriers, as the industry is expected to maintain a high level of consumer interest [62].

Group 1 - The core viewpoint is that Huatai Securities analyzes the consumer goods sector's industry trends, highlights, and investment themes, maintaining a positive outlook on the transformation of China's economic growth engine towards consumption [1] - In the context of global trade frictions and international disturbances, the consumer sector, driven by domestic demand, exhibits notable defensiveness and certainty, particularly by 2025 [1] - Since 2024, a series of consumption-promoting policies have been introduced, leading to a U-shaped recovery in retail sales growth and consumer confidence index, with expectations for continued policy support in the second half of the year [1] Group 2 - On a micro level, most food and beverage companies have completed channel inventory destocking and are driving revenue and profit growth through category expansion, channel innovation, and efficiency improvements [1] - Huatai Securities believes that there are both value reassessment opportunities for leading companies in the consumer goods sector and structural growth prospects [1]

Group 1 - The revised regulation on public reception prohibits high-end dishes, cigarettes, and alcohol, which is considered the strictest "ban on alcohol" in history [1][2] - The previous ban on alcohol in 2012 led Guizhou Moutai to shift its consumer base from public consumption to private enterprises and the general public, reducing the proportion of public consumption from over 30% to 1% [3] - The new policy will have some impact on Guizhou Moutai, but it is expected to be less severe than the 2012 regulations [3] Group 2 - The white liquor industry has seen a decline in annual sales volume since 2015, with projections for 2024 indicating sales of 4.15 million kiloliters, less than half of the 2015 figures [4] - Despite the decline in overall consumption, the demand for high-quality liquor is increasing, which is favorable for high-end brands like Guizhou Moutai [4] - Guizhou Moutai's revenue and net profit have significantly increased over the past decade, with projected revenues of 174.144 billion yuan and net profits of 86.228 billion yuan in 2024, representing 5.2 times and 5.6 times the figures from 2015, respectively [6] - The company's gross profit margin has consistently remained above 90%, significantly higher than other companies in the industry [7] Group 3 - The current ban on alcohol is expected to have a limited impact on Guizhou Moutai, as it will accelerate the exit of companies heavily reliant on government consumption, leading to increased industry consolidation [9] - Guizhou Moutai's production capacity is constrained by geographical and biological factors, with a designed capacity of 46,412 tons per year, resulting in a supply-demand imbalance in the market [10]

Core Viewpoint - The article discusses the decline in the price and popularity of Moutai, once considered "liquid gold," and explores the reasons behind this trend, questioning whether it can experience a revival in the future. Group 1: The Rise of Moutai - From 2018 to 2023, Moutai created a myth in the Chinese consumer market, with its official price of 1499 yuan often exceeding 3000 yuan in retail [3] - During its peak, Moutai was seen as a wealth-generating tool, with distributors reporting profits of over 2000 yuan per bottle, leading to a distorted industry chain [3] - Moutai's stock price reached over 2600 yuan in 2021, marking its financial peak and transforming it into a financial derivative [5] Group 2: The Burst of the Bubble - Starting in 2024, Moutai's pricing system began to collapse, with wholesale prices dropping below 1800 yuan by June 2025, a 50% decrease from peak values [8] - The younger generation (under 25) has reduced their consumption of Moutai by 47%, favoring lower-alcohol beverages instead [10] - A new "ban on alcohol" policy in 2024 led to a 70% reduction in government alcohol spending, significantly impacting Moutai's sales [10] Group 3: The Struggle for Survival - In 2025, Moutai initiated a transformation to return to its roots, focusing on making the product more accessible and relevant to consumers [14] - The introduction of smaller bottle sizes and lower-alcohol options has seen a 300% increase in orders for Moutai as wedding wine [16] - Moutai is also working to eliminate intermediaries, with its direct sales platform controlling 76% of traffic, significantly reducing distributor profit margins [16] Group 4: Cultural and Market Transformation - Moutai is attempting to reshape its cultural identity by promoting itself as a family heritage product and creating new consumption scenarios [18] - The company aims to transition from being a symbol of power to a beloved consumer product, emphasizing quality over scarcity [18] - The historical context suggests that Moutai has previously adapted to market changes, indicating a potential path forward through innovation and consumer engagement [18]

Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company achieved a total operating revenue of 174.14 billion yuan in 2024, representing a year-on-year increase of 15.66%, and a net profit attributable to shareholders of 86.23 billion yuan, up 15.38% year-on-year, aligning with market expectations [2][3] - The company plans a modest increase in domestic market supply for 2025, aiming to stabilize market prices while addressing diverse consumer needs through new product launches [7][10] Financial Performance - In 2024, the company reported a gross margin of 91.93% and a net margin of 52.27%, indicating stable profitability despite slight declines in these metrics [6] - The company’s revenue from Moutai liquor and other series reached 145.93 billion yuan and 24.68 billion yuan respectively, with year-on-year growth rates of 15.28% and 19.65% [4] - The company’s earnings per share (EPS) for 2025 is projected to be 74.54 yuan, with a net profit forecast of 93.64 billion yuan, reflecting a year-on-year growth of 8.6% [12][10] Product and Market Strategy - The company is expanding its distribution network for the sauce-flavored liquor, with wholesale and direct sales revenues increasing by 19.73% and 11.32% respectively in 2024 [5] - The company plans to adjust its product offerings in 2025, focusing on high-value products and enhancing its presence in the catering market [8][9] Future Outlook - The company aims for a revenue growth of approximately 9% in 2025, with a focus on maintaining the market price stability of its flagship product, the 53°500ml Moutai liquor [10] - The company is actively pursuing consumer engagement strategies to adapt to changing market dynamics and consumer preferences [9]