2025-12-29 01:04Summary of the White Liquor Industry Conference Call Industry Overview - The white liquor industry is currently in a downward adjustment cycle, with overall market demand remaining weak, particularly in November and December. This trend is expected to continue until at least the second half of 2026 or later [2][3][7]. Key Points and Arguments - Price and Supply Adjustments: The industry has not yet reached a bottom in terms of price and supply. For instance, Moutai's price has decreased but has not hit the bottom, and the supply from strong brands like Moutai and Fenjiu has not been fully adjusted [2][4]. - Impact of Price Cuts: Moutai (1,935) and Wuliangye (1,618) have seen some sales growth from price cuts, but brands like Yanghe M3 have not experienced significant improvements. The long-term effects of these price cuts on sales remain uncertain [2][6]. - Challenges for Moutai: Moutai faces difficulties in maintaining its pricing structure, with the price of its flagship product declining and distributors at risk of losses. Reducing supply is seen as a method to stabilize prices, but this conflicts with growth targets [2][10]. - Wuliangye's Issues: Wuliangye is dealing with wholesale price inversion and channel system problems. Digital transformation is crucial but challenging due to organizational structure limitations [2][11]. - Luzhou Laojiao's Strategy: Luzhou Laojiao has taken a calm approach to market conditions, refusing to lower prices, which may lead to short-term sales losses but is expected to strengthen its brand position in the long run [2][14]. Additional Important Insights - External Economic Factors: The recovery of the white liquor market is heavily influenced by external economic conditions and policy factors, such as the potential long-term impact of alcohol bans on high-end demand, estimated to affect demand by 20% to 30% [2][5][19]. - Future Market Outlook: The first half of 2026 is expected to remain in a bottoming phase, with potential improvement in the second half depending on external conditions. Continuous policy factors like alcohol bans may limit market rebound [2][7]. - Strategic Adjustments: Companies are adopting various strategies to cope with the adjustment cycle. Some are cutting prices to boost sales, while others are focusing on structural adjustments to navigate market changes [2][8][9]. - Consumer Behavior During Festivals: The white liquor market typically sees unexpected performance during the Spring Festival, as it is a rigid consumption scenario where consumers tend to purchase more expensive liquor regardless of the economic environment [2][5][23]. Conclusion - The white liquor industry is navigating a challenging period characterized by price adjustments, supply issues, and varying strategies among key players. The outlook remains cautious, with significant reliance on external economic factors and internal strategic decisions to shape future performance.