Core Viewpoint - The report from CITIC Securities indicates that the liquor sector, particularly the baijiu segment, has underperformed significantly since 2025 due to slow recovery in domestic consumption and tightening of policies related to business banquets [1] Baijiu Industry Summary - Since the beginning of 2025 until October 31, 2025, the CITIC Baijiu Index has decreased by 4.6%, underperforming the CSI 300 and Wind All A indices by 22.5 percentage points and 30.9 percentage points respectively [1] - The report anticipates that the second half of 2025 will represent the bottom of the current cycle for the baijiu industry, characterized by the weakest sales, lowest prices, and the most pessimistic market expectations [1] - It is projected that the baijiu sector will begin to stabilize and recover in 2026, supported by a clear trend of gradual demand recovery [1] Beer Industry Summary - The beer industry is expected to see stable but slightly declining revenue and profits in 2026, influenced by factors such as the increasing share of non-immediate consumption channels, fragmented consumer demand, and weak recovery in consumption [1] - Companies that are expected to perform well in the beer sector are those with strong market share growth, effective channel management, and robust product momentum [1]

Group 1: Industry Overview - The overall sales in the industry are expected to decline by over 20%, with a gradual improvement month-on-month and a narrowing decline in the festive season of Mid-Autumn and National Day, estimated at around 20% [1] - Business banquets are performing weakly, while mass consumption and wedding banquets are relatively resilient, with a smaller decline in Q3; high-end gifting shows improvement before the holidays [1] - Major liquor companies are adopting a more pragmatic approach, accelerating adjustments to reduce channel pressure, cutting investment, and enhancing operational efficiency [1] Group 2: Company Performance - Leading liquor companies like Moutai and Wuliangye have achieved over 80% collection progress, while regional companies are generally around 70%, with pressure on mid-tier liquor companies [1] - Wuliangye has held dealer meetings in multiple locations, emphasizing strict checks on market price disruptions and announcing increased subsidy policies for different-sized dealers [1] - The report from Citic Securities indicates that the bottom of the industry fundamentals is expected to appear in Q3 2025, with Q3 of this year being the most challenging period for sales, prices, and market confidence [2] Group 3: Market Trends - Huachuang Securities highlights the importance of bottom catalysts in the liquor sector, with traditional consumption entering a bottom accumulation phase, and seasonal catalysts expected to drive valuation recovery [3] - The launch of the new flagship product "Dazhen" by Zhenjiu Lidu has achieved a collection of 370 million yuan, with over 2,800 alliance merchants signed [4] - In the beer sector, the acquisition of 53% of Xianpi Fulu's shares by Mixue Ice City marks its expansion into the alcoholic beverage market, with the financial performance to be consolidated into the group’s reports [5]

Core Viewpoint - The industry is actively embracing consumer demand and expanding market opportunities, with expectations for a fundamental bottom in the industry by Q3 2025 [1] Group 1: Industry Outlook - The performance of the liquor industry at the 2025 Autumn Sugar and Wine Fair is in line with expectations, indicating a positive trend towards consumer engagement [1] - The third quarter of this year is anticipated to be the most challenging period for industry sales, pricing, and market confidence [1] - The second half of this year is expected to present significant pressure on the financial performance of listed liquor companies [1] Group 2: Specific Sector Insights - The beer sector is projected to have a lower comparative base in the second half of the year, with stable pre-holiday stocking rhythms [1] - Increased competition and the impact of alcohol restrictions are expected to create some pressure on the beer sector's financial reports in Q3 [1]

Group 1 - The liquor industry is currently in the bottoming phase of its third major cycle in the past thirty years, with the fundamental bottom expected to appear in Q3 2025 [2][3] - The third quarter of this year is anticipated to be the most challenging period for industry sales, prices, and market confidence, while the second half of the year will see significant pressure on the financial performance of liquor companies [2][3] - If demand recovers normally, a turning point in sales is expected as early as Q1 2026 [2] Group 2 - The overall stock price of the liquor sector has decreased by 1.7% from January 1, 2025, to August 22, 2025, underperforming the CSI 300 index by 13.0 percentage points [1] - The current price-to-earnings ratio (TTM) for the liquor sector is at 19.0x, which is at the 41st, 16th, 9th, 5th, and 14th percentiles compared to the past 1, 3, 5, 10 years, and since listing, respectively [1] - The beer sector's overall price-to-earnings ratio (TTM) is 24.1x, positioned at the 21st, 12th, 7th, 3rd, and 2nd percentiles over the same time frames [1] Group 3 - In the first seven months of 2025, the production of large-scale beer enterprises in China reached 23.27 million kiloliters, reflecting a year-on-year increase of 0.6% [3] - The beer sector is expected to maintain stable performance in Q3 2025, although some impact from alcohol-related policies is anticipated [3] - The leading companies in the beer sector may benefit from cost reductions, with a slight increase in gross profit margins expected in Q3 [3]

Core Viewpoint - The liquor industry is rapidly bottoming out, with expectations for the industry's fundamental bottom to appear in the third quarter of 2025, influenced by various factors such as inventory, pricing, policy impacts, recovery of consumption scenarios, and financial reports from listed companies [1] Group 1: Industry Analysis - The third quarter of this year is anticipated to be the most challenging period for industry sales, pricing, and market confidence [1] - The second half of this year is expected to exert significant pressure on the financial performance of listed liquor companies [1] - A clear trend of gradual recovery is anticipated thereafter, indicating potential bottom-fishing opportunities in the liquor industry [1] Group 2: Beer Market Insights - The beer market is expected to maintain stable performance in the third quarter, despite a lower base in the second half of the year, due to the impact of the liquor restriction policy [1]