Core Insights - The October CPI data indicates a positive signal, with the core CPI year-on-year growth reaching the highest level since March 2024, suggesting a continuous recovery in the service sector [2][3] - The liquor industry is experiencing a bottoming phase, and it is expected to benefit from a market style shift as the year-end approaches [2][3] CPI Analysis - In October, China's CPI showed a year-on-year increase of 0.2%, marking the highest growth since February 2025, while the core CPI rose by 1.20% year-on-year, the highest since March 2024 [2] - The increase in CPI was primarily affected by declines in food, tobacco, and transportation sectors, which saw year-on-year decreases of 1.6% and 1.5% respectively [2] - Other goods and services saw a significant year-on-year increase of 12.8%, indicating strong service consumption [2] Liquor Industry Outlook - The liquor industry is expected to see a turning point in financial reports and inventory levels within the next 2-3 quarters, with Q3 revenue down 18% year-on-year and net profit down 22% [3] - The current valuation of the liquor sector is relatively low, with the PE TTM for food and beverage at the 17th percentile and for liquor at the 23rd percentile since 2005 [3] - The dividend yield for liquor stocks has reached 3.74%, compared to 2.54% for the CSI 300 and 2.21% for the Shanghai Composite, indicating a favorable return profile [3]