Luzhou Laojiao (000568.SZ) 'Personal Consumption Era' Strategic Transformation Investment Value In-depth Analysis

Based on a comprehensive analysis of Luzhou Laojiao’s strategic transformation, industry cycle position, and valuation level, I believe Luzhou Laojiao is in a

. In the short term (Q1 2026), the industry’s ‘critical juncture’ does pose pressure, but the company has a solid digital foundation, clear strategic direction, valuation in a historically low range, and .

• Current Stock Price: 119.39 CNY
  , in the lower-middle range of the 52-week interval (106.75-146.72 CNY) [0]
• DCF Valuation: Conservative/Baseline/Optimistic scenarios are 194.75/249.95/381.59 CNY respectively
  , baseline scenario upside potential 109.4% [0]
• P/E: 13.88x
  (TTM), at historical low (10-year quantile ~6.3%) [0][7]
• Financial Health: ROE 26.10%, Net Profit Margin 42.11%, Abundant Cash Flow
  [0]

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According to the latest industry research, the consumption structure of Baijiu is undergoing

:

• Post-70s/Post-80s
  : Prefer high-alcohol Baijiu (52°+), dominate business banquets and gift-giving scenarios
• Gen Z (Post-95s)
  : Favor low-alcohol Baijiu, pursue the ‘slightly tipsy but not drunk’ experience, expand consumption scenarios to friend gatherings, camping, casual drinking alone, etc. [3][7]

• Official Consumption
  : Continues to be suppressed by the ‘strictest alcohol ban’, rapidly declining
• Business Consumption
  : Expected to decline by 20% in 2025 due to policy impacts, and the decline is expected to narrow to single digits in 2026 [7]
• Mass Personal Consumption
  : Its proportion continues to rise to 25%, becoming a supporting force, corresponding to the new trend of ‘drinking for self-pleasure’ [7]

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At the second extraordinary general meeting in 2025, Luzhou Laojiao’s management made

about future industry trends:

• ‘Critical Juncture’ Judgment
  : Q1 2026 is expected to be the most difficult period for the Baijiu industry
• Weakened Spring Festival Effect
  : Consumption volume is only 4 times that of usual days (traditionally 6-8 times), and the peak season effect is significantly weakened
• Mid-to-High-End Demand Contraction
  : Expected 30%-40% demand contraction pressure, mainly from the sub-high-end price band

• ‘Personal Consumption Era’
  : Shift from official/business-driven to personal consumption-driven
• Consumption Scenario Remodeling
  : Shift from banquets/gift-giving to daily drinking, leisure scenarios, and cultural experiences

• Informatization → Digitalization → Intelligence
  : Complete end-to-end digital transformation of wine production, internal supply chain, marketing system, and headquarters management [2]
• ‘14th Five-Year Plan’ Ecological Chain Strategy
  : Fully upgrade and implement the ecological chain strategy to move towards a chain-leading enterprise [2]

1. Computing Power Construction
   : Computing power will reach 30T by the end of the year, providing a strong foundation for intelligent applications
2. ‘Lighthouse Factory’
   : Build the first ‘Lighthouse Factory’ in the Baijiu industry, setting a benchmark for the industry’s digital intelligence upgrade [1]
3. Data Governance
   : Solve industry problems of scattered data and inconsistent standards, jointly build a marketing domain data asset portal [1]
4. Intelligent Brewing
   : Layout intelligent brewing technical transformation projects, promote the upgrade from ‘experience-led’ to ‘data-driven + experience-guided’ [1]

• Dual-wheel Drive of Large Model + Small Model
  : Explore the ultimate in craftsmanship and quality [1]
• Embodied Intelligence Application
  : Explore in scenarios such as automated packaging, giving intelligent devices ‘hands’ and ‘feet’ [1]
• Digital System from Field to Tongue
  : Covering smart agriculture, intelligent manufacturing, smart logistics, precision marketing, and digital retail [5]

Product Line	Strategic Position	Market Performance
38° Guojiao 1573	Core Low-Alcohol Flagship Product	The industry’s first low-alcohol Baijiu flagship product with sales exceeding 10 billion yuan [3]
28° Guojiao 1573	Ultra-low Alcohol Innovation	Successfully developed, will be launched at the right time [9]

• Luzhou Laojiao’s low alcoholization exploration can be traced back to the 1970s [3]
• Successfully solved three major technical bottlenecks of low-alcohol wine: easy turbidity of the wine body, bland taste, and easy hydrolysis during long-term storage [3]
• Achieved ‘can be drunk with ice or water’, greatly expanding young consumer scenarios [8]

• Surge in Emerging Channels
  : In the first half of 2025, revenue from emerging channels increased by 27.55% YoY, and gross profit margin increased by 4.52 percentage points [3]
• Drinking Method Innovation
  : Promote new drinking methods such as iced drinks and mixed drinks
• Scenario Store Creation
  : Attempt to create consumer stores combined with food and wine consumption to display products centrally
• Cultural Experience
  : Promote the ‘wine-tourism integration’ project that integrates production visits, intangible cultural heritage experiences, cultural displays, tasting teaching, and theme catering [5]

Youthful Appearance, Youthful Product Expression, Youthful Quality Expression, Youthful Cultural Expression, Youthful Communication Form, Youthful Opinion Leaders, Youthful Communication Channels

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• ROE:26.10%
  : Significantly higher than the industry average
• Net Profit Margin:42.11%
  : Extremely high profit margin level
• Operating Profit Margin:56.50%
  : Strong profitability
• Current Ratio:3.61
  : Abundant liquidity, low financial risk

• Free Cash Flow:17.993 Billion CNY
  (2024) [0]
• Debt Risk: Low Risk Rating
  [0]

Scenario	Fair Value	vs Current Stock Price	Key Assumptions
Conservative	194.75 CNY	+63.1%	0% Growth, EBITDA Margin51.8%
Baseline	249.95 CNY	+109.4%	17% Growth, EBITDA Margin54.6% (Historical5-year Average)
Optimistic	381.59 CNY	+219.6%	20% Growth, EBITDA Margin57.3%
Probability Weighted	275.43 CNY	+130.7%	-

• P/E:13.88x
  (TTM) [0]
• P/B:3.53x
  [0]
• EV/OCF:15.27x
  [0]

• The overall PE(TTM) of the Baijiu sector is about18.85x (6.3% quantile in the past10 years) [7]
• Luzhou Laojiao’s valuation is lower than the sector average, with relative attractiveness

###4.3 Technical Analysis: Short-term Pressure but Close to Bottom

[10]

• Trend Type
  : Sideways consolidation (short-term), no clear buy/sell signals
• Key Price Levels
  : Support at118.12 CNY, Resistance at124.32 CNY
• KDJ Indicator
  : K:14.8, D:18.4, J:7.6, Oversold Opportunity
• RSI(14)
  : Oversold Opportunity
• Beta:0.81
  : Low Volatility, Strong Defensive Attribute

• Period High
  :260.60 CNY (2023-02-13)
• Period Low
  :100.02 CNY (2024-09-18)
• Current Price
  :119.39 CNY (2025-12-26)
• Annualized Volatility
  :34.34%
• Sharpe Ratio Estimate
  : -0.45 (Recently Under Pressure)

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###5.1 Short-term Risks (Q1-Q2 2026)

1. Demand Contraction Pressure
   : Mid-to-high-end Baijiu faces30%-40% demand contraction
2. Weakened Spring Festival Effect
   : Consumption volume is only4 times that of usual days, peak season is not prosperous
3. Wholesale Price Downward Pressure
   : Price inversion phenomenon will continue, channel profits are under pressure
4. Inventory De-stocking Cycle
   : Channel inventory digestion takes time, suppressing short-term performance

1. Transformation Pains
   : Shift from ‘channel-driven’ to ‘consumer-driven’ may affect growth rate in the short term
2. Youth Strategy Effect to Be Verified
   : Low-alcohol wine volume and young customer conversion take time
3. Increased Cost Input
   : Digital transformation and youth marketing require continuous investment

###5.2 Long-term Opportunities (H22026-2030)

Dimension	Traditional Advantage	New Era Competitiveness
Product Power	Guojiao1573 High-end Quality	Leading Low Alcoholization Technology + Differentiated Matrix
Brand Power	‘Founder of Nongxiang’ Historical Heritage	Youthful Expression + Cultural Renewal
Channel Power	Traditional Distribution Network	Digital Direct Connection to Consumers
Operational Power	Experience-driven Brewing	Data-driven + Intelligent Brewing

• From official/business minority groups → Mass personal consumption groups
• Gen Z Low-Alcohol Wine Market: Scale exceeded74 billion CNY in2025, CAGR25% [3][9]

• From low-frequency banquets/gift-giving → High-frequency daily drinking
• Diversified Scenarios: Drinking alone, friend gatherings, camping, leisure, etc. [5][7]

• High-alcohol wine (high-end image) + Low-alcohol wine (volume growth) dual-wheel drive
• Guojiao157338°10-billion flagship product success, 28° to be launched soon [3][9]

• Intelligent brewing reduces costs and improves quality stability
• Precision marketing increases ROI and reduces customer acquisition costs
• Data-driven product R&D and channel optimization [1][5]

###5.3 Valuation Repair Space

• Industry Pessimistic Expectations: Market worries about the long-term growth of Baijiu [6]
• Historical Low Position Holding: Institutional holdings have fallen by10 percentage points [7]
• Performance Expectation Downgrade: Leading wine enterprises have downgraded2025-2026 profit forecasts [7]

1. Spring Festival Sales Resilience Verification
   : If the 2026 Spring Festival shows resilience, it will boost market confidence [6]
2. Wholesale Price Stabilization and Recovery
   : After supply-demand relationship improves, wholesale price recovers, channel confidence restores [7]
3. Low-Alcohol Wine Volume Growth
   :38° and28° products volume growth, opening up incremental space [3][9]
4. Digital Transformation Effect
   : Cost reduction and efficiency improvement results appear, enhancing profitability [1]
5. Institutional Allocation Recovery
   : Obvious valuation advantage, institutional allocation is expected to recover [7]

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###6.1 Investment Logic Framework

‘At the bottom of the industry, buy high-quality assets with clear strategy, strong execution, and low valuation’

✅ : Valuation and holdings are at historical lows, and pessimistic expectations are fully reflected [7]
✅ : Digital + Youth dual-wheel drive, correct direction [1][2]
✅ : Low-alcohol wine has10-billion flagship product verification, digital infrastructure is complete [3]
✅ : DCF baseline scenario has109% upside potential, with margin of safety [0]
✅ : ROE26%, Net Profit Margin42%, Abundant Cash Flow [0]

###6.2 Investment Timing Judgment

• Risk
  : Q12026 ‘critical juncture’ pressure, Spring Festival sales data is a key observation point
• Strategy
  : Cautiously observe, wait for Spring Festival sales data verification
• Key Signals
  : Wholesale price stabilization, inventory de-stocking, sequential improvement in sales

• Opportunity
  : After Q22026, low base effect + scenario repair, the industry may be more stable [6]
• Strategy
  : Layout in batches, focus on valuation repair opportunities
• Catalysts
  : Price index recovery, low-alcohol wine volume growth, digital transformation effect显现

• Value
  : Personal consumption era dividend release, digital efficiency improvement
• Strategy
  : Strategic allocation, cross cycles
• Target Price
  : DCF baseline scenario 249.95 CNY (+109.4%) [0]

###6.3 Risk Tips

1. Demand Recovery Below Expectations
   : Macroeconomic pressure continues, consumption recovery is weak [7]
2. Increased Industry Competition
   : Leading wine enterprises’ concentration increases, price war risk [8]
3. Youth Strategy Below Expectations
   : Young customer conversion rate is lower than expected [9]
4. Extended Inventory De-stocking Cycle
   : Channel inventory digestion is slow, suppressing performance release
5. Policy Risk
   : Alcohol ban and other restrictive policies are intensified

• Current valuation has reflected pessimistic expectations, limited downside space [7]
• High financial health, strong risk resistance [0]
• Digital transformation enhances long-term competitiveness [1][5]

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Luzhou Laojiao’s strategic judgment on the ‘Personal Consumption Era’ is profound and forward-looking, reflecting the company’s management’s keen insight into industry trends. Facing the ‘critical juncture’ in Q12026, the company’s response strategy can be summarized as:

• Reduce costs and improve efficiency through digital transformation to offset demand contraction pressure
• Explore young markets through low alcoholization + scenarioization to find incremental opportunities

• Intelligent Brewing: Quality revolution from ‘experience-driven’ to ‘data-driven’ [1][5]
• Direct Consumer Connection: Model upgrade from ‘channel-driven’ to ‘consumer-driven’ [2]
• Ecological Chain Strategy: Pattern transition from ‘single wine enterprise’ to ‘chain-leading enterprise’ [2]

Luzhou Laojiao is at a . Although the industry does face the ‘critical juncture’ challenge in Q12026, the company’s solid digital foundation, clear youth strategy, high-quality financial status, and undervalued valuation level make it have and .

For

, the current point may be a strategic opportunity to layout high-quality Baijiu assets, but it needs to . The key lies in and .

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[0] Jinling API Data - Luzhou Laojiao Company Overview, Financial Analysis, Valuation Analysis, Technical Analysis, Price Data, etc.

[1] Caifuhao - ‘Luzhou Laojiao Wins ‘Retail Digital Intelligence Pioneer’ Award: Brew a New Chapter in Retail with Digital Wisdom’ (2025-