Investment Rating - The report maintains an "Outperform" rating for the food and beverage sector [2][5][6]. Core Views - The high-end liquor prices continue to face pressure, influenced by a "ban on alcohol" affecting short-term market fluctuations. The white liquor industry is undergoing a longer adjustment cycle compared to the previous one, with demand decline attributed to regulatory policies and economic activity levels [3][13][15]. - The food and beverage sector experienced a decline of 4.42% during the week, underperforming the Shanghai Composite Index by 4.17 percentage points [2][24]. Summary by Sections 1. White Liquor - High-end liquor prices are under pressure, with a reported 2.0% year-on-year decline in liquor prices from January to May. The white liquor index fell by 5.3% this week, influenced by the "ban on alcohol" for public officials [3][15]. - Recommended stocks include leading companies with proven risk resilience such as Kweichow Moutai, Shanxi Fenjiu, and Wuliangye, as well as those with digital transformation benefits like Luzhou Laojiao [3][15]. 2. Consumer Goods - The upcoming IPO of Haitian Flavoring and Food Co. is noted, with the beer and beverage sectors entering a peak season. The report suggests focusing on alpha-type beer stocks like Yanjing Beer and Zhujiang Beer during valuation corrections [4][16]. - The snack sector is experiencing a trend of differentiation, with recommendations for companies like Wei Long and Yanjinpuzi that are innovating in product categories and channels [4][18]. 3. Seasonality and Market Trends - The report highlights that the beer sector is entering its peak season, with expectations for stable or growing sales due to favorable weather conditions. The report suggests monitoring stocks like Qingdao Beer and China Resources Beer for rebound opportunities [4][17]. - The dairy sector is expected to see a gradual recovery in demand, with potential policy catalysts and supply adjustments leading to improved conditions in 2025 [4][21]. 4. Investment Recommendations - The recommended investment portfolio includes Kweichow Moutai, Wuliangye, Shanxi Fenjiu, Luzhou Laojiao, Yanjing Beer, Wei Long, and Yihai International [5][6].

Core Viewpoint - Guizhou Moutai's annual shareholder meeting highlighted the company's strong financial performance in 2024, showcasing resilience and high-quality growth despite challenges in the liquor industry [2][3][5]. Financial Performance - In 2024, Guizhou Moutai achieved total revenue of 174.14 billion yuan, a year-on-year increase of 15.66%, and a net profit attributable to shareholders of 86.23 billion yuan, up 15.38% [3][6]. - The company's operating cash flow reached 92.46 billion yuan, reflecting a significant increase of approximately 38.85% compared to the previous year [3][6]. - The revenue from Moutai liquor, the core growth driver, was 145.93 billion yuan, marking a 15.28% increase, while the revenue from the Moutai sauce-flavored liquor series exceeded 24.6 billion yuan, with a growth rate of 19.65% [6]. Dividend Distribution - Guizhou Moutai plans to distribute a record cash dividend of approximately 64.67 billion yuan for 2024, which represents 75% of the net profit attributable to shareholders [8][9]. - The company has a cumulative profit of 558.72 billion yuan since its listing, with total cash dividends distributed amounting to 336.11 billion yuan, resulting in an average dividend payout ratio of 60.16% [9]. International Expansion - In 2024, Guizhou Moutai's overseas revenue surpassed 5 billion yuan for the first time, reaching 5.19 billion yuan, indicating a growing international presence [7]. - The company's marketing network now spans 64 countries and regions, with a focus on increasing penetration in Belt and Road Initiative markets [7]. Financial Health - As of the end of 2024, Guizhou Moutai's total assets amounted to 298.94 billion yuan, a year-on-year increase of 9.62%, while net assets reached 233.11 billion yuan, up 8.09% [7]. - The company's debt-to-asset ratio stood at 19.04%, with cash and cash equivalents totaling 169.97 billion yuan, indicating a strong financial position [7]. Future Outlook - For 2025, Guizhou Moutai has set a revenue growth target of approximately 9%, reflecting a more conservative outlook amid industry adjustments [11]. - The company acknowledges the current liquor industry cycle characterized by a transition to rational consumption and the need for channel upgrades [11].

Core Viewpoint - The meeting between Moutai and Wuliangye emphasized the importance of collaboration and mutual support in navigating the current cyclical adjustments in the Chinese liquor industry, aiming for high-quality development together [3][5][7]. Group 1: Industry Overview - The liquor industry is currently experiencing a cyclical adjustment, influenced by macroeconomic factors and internal company dynamics, necessitating a clear understanding of the development trends [5]. - The overall performance growth of the liquor industry has slowed down, with A-share liquor companies projected to achieve a total revenue of 442.23 billion yuan in 2024, a year-on-year increase of 2.28%, and a net profit of 166.63 billion yuan, up 4.32% [9]. Group 2: Company Performance - Moutai's revenue for 2024 is expected to reach 174.14 billion yuan, reflecting a year-on-year growth of 15.66%, with a net profit of 86.23 billion yuan, up 15.38% [10]. - Wuliangye is projected to achieve a revenue of 89.18 billion yuan in 2024, a growth of 7.09%, and a net profit of 31.85 billion yuan, increasing by 5.44% [10]. - Both companies reported continued double-digit growth in the first quarter of the year, with Moutai's revenue at 50.60 billion yuan (up 10.54%) and Wuliangye's at 36.94 billion yuan (up 6.05%) [10]. Group 3: Strategic Collaboration - Moutai and Wuliangye plan to enhance their cooperative mechanisms to foster high-quality development in the liquor industry, focusing on rational consumption and maintaining a healthy industry ecosystem [3][5]. - The companies aim to explore new marketing strategies and digital tools to adapt to market changes, particularly targeting younger consumers and international markets [7].

Core Viewpoint - The white liquor industry is experiencing a significant slowdown in growth, with many companies reporting declining revenues and profits, indicating a challenging market environment [1][12][18]. Group 1: Industry Performance - As of April 29, nearly all listed white liquor companies reported a slowdown in performance for 2024, with six companies experiencing a year-on-year revenue decline [1][4]. - In the first quarter of 2025, nearly half of the white liquor companies reported negative performance, with some experiencing revenue declines of 20% to 30% [1][12]. - The total revenue of all white liquor companies in 2024 exceeded 440 billion yuan, primarily driven by growth from leading companies like Moutai [4][7]. Group 2: Market Dynamics - The competitive landscape of the white liquor industry has shifted, with Shanxi Fenjiu rising to the third position among leading brands, indicating a consolidation of market power among top players [2][8]. - Over the past five years, the rankings of the top ten white liquor companies have changed significantly, with new entrants and established brands experiencing shifts in their market positions [10][11]. - The performance of mid-sized and smaller liquor companies has generally been poor, with some facing delisting risks [2][12]. Group 3: Future Outlook - Analysts suggest that the white liquor industry is currently in a "bottoming out" phase, with expectations of continued low performance in the second quarter of 2025 [2][17]. - The core issue facing the industry is weak consumer demand, with a need for companies to connect with younger consumers and explore new market segments [18].