China Spirits Tracker_ Checking in on 2025 Strong-Start progress and 2024 target completion

Summary of China Spirits Tracker - January 6, 2025 Industry Overview - The report focuses on the Chinese spirits industry, particularly the performance of major brands such as Moutai, Wuliangye, Laojiao, Fen Wine, Gujing, Yanghe, and King's Luck [1][2][7]. Key Points and Arguments 1. Retail Performance: There has been a sequential pick-up in retail sell-through, but the Lunar New Year (LNY) seasonal performance requires further monitoring due to the upcoming peak season stock-up by retail merchants [1]. 2. Market Expectations: Investor expectations are low, anticipating a year-over-year decline in spirits retail sales compared to the high base in 2024 LNY. However, there is potential for growth in residential and wedding banquets during the Spring Festival [1]. 3. Prepayment Targets: - Major brands like Moutai and Wuliangye have largely completed their 2024 prepayment targets and have achieved 30% completion for 2025 prepayment as of early January 2025 [2]. - The prepayment pace for 2025 is slower compared to the same time last year, with brands like Laojiao and Fen Wine showing lower progress [2][8]. 4. Dividend Announcements: Six state-owned enterprises (SOEs) in the spirits sector have announced interim dividends, with payout ratios ranging from 15% to 72%, led by Moutai [3][9]. 5. Wholesale Price Trends: - The wholesale price of original case Feitian Moutai decreased by RMB 100 to RMB 2,230, while unpacked Feitian Moutai's price dropped by RMB 40 to RMB 2,200 [4][19]. - Common Wuliangye's price remained stable at RMB 950, and Guojiao 1573's price also remained unchanged at RMB 860 [4][19]. 6. Sales Growth Indicators: Douyin reported a 119% year-over-year increase in group-purchase order volume for New Year's Eve celebrations, and Beijing's Commerce Bureau noted a 31.5% increase in sales for key monitored enterprises during the New Year holidays [12]. Additional Important Information - The report highlights a divergence in prepayment target completion and the pace of strong-start preparation for 2025 compared to previous years, indicating a cautious market sentiment [2][8]. - The interim dividend announcements reflect a commitment to shareholder returns, which may positively influence investor sentiment [3][9]. - The report includes detailed wholesale price data for various spirits, indicating market trends and pricing strategies [4][19][26]. This summary encapsulates the key insights from the China Spirits Tracker, providing a comprehensive overview of the current state and expectations within the industry.