Analysis Report on the Resonance of Fourfold Bottoms in the Liquor Sector

The liquor sector currently shows typical fourfold bottom resonance characteristics, providing a solid foundation for industry reversal [1]:

: Both the economic and policy aspects have passed the worst moment and show marginal improvement. Expectations for consumption stimulus policies are increasing, creating a favorable environment for the recovery of liquor demand.

: The proportion of active equity funds holding liquor stocks has dropped to 5.52%, close to the level of Q2 2017, which is at a historic low [4]. The drop in institutional holdings to a historic low creates conditions for subsequent capital inflow, and the motivation to return to pro-cyclical sectors under inflation expectations is enhanced.

: Channel inventory is being cleared at an accelerated pace. Although it still faces challenges such as price inversion, the de-stocking progress is in line with expectations, laying the foundation for stable recovery of wholesale prices.

: As of October 31, 2025, the absolute PE level of the liquor sector is 18.7x, lower than the average level of 27.6x since 2011; the relative PE multiple is 1.14x, lower than the historical average of 2.01x [4]. The current dividend yield of most liquor companies is above 3%, providing sufficient valuation safety margin.

:

• Kweichow Moutai (600519.SS) has performed relatively steadily in the past 60 trading days, rising 2.07% to 1456.60 yuan during the period, showing “ballast stone” resilience [0]
• Wuliangye (000858.SZ) fell 2.35% to 120.21 yuan in the same period, but its valuation is already at a historic low [0]
• The CSI Liquor Index rose 5.05% in a single day on November 10, indicating strong market expectations for bottom reversal [5]

: Funds have shown differentiated attitudes towards liquor stocks. High-end liquor companies were sold off due to performance pressure, while mid-to-high-end and some sub-leading companies received counter-cyclical position increases due to channel clearance and valuation advantages [3].

Many securities firms have given clear expectations for the industry inflection point: CITIC Securities believes that the fundamental bottom of this round of the industry is expected to appear in Q3 2025, and the second half of 2025 is the stage with the greatest pressure on the financial performance of liquor listed companies. It is expected that the inflection point of sales volume can be seen as early as Q1 2026 [2]. Shenwan Hongyuan expects stabilization in Q2 2026 and a fundamental inflection point in Q3 2026 [4].

Active equity funds holding liquor stocks show the characteristics of “overall under-allocation, structural differentiation” [3]. As of the end of Q3 2025, the number of active equity funds holding Kweichow Moutai and Wuliangye decreased month-on-month, but the number of holdings of Luzhou Laojiao, Shanxi Fenjiu, and Yanghe Co., Ltd. increased month-on-month. Companies with more thorough clearance and clearer stabilization expectations, such as Shede Spirits and Jiugui Liquor, have received more new fund holdings.

The liquor industry faced significant pressure in Q3 2025: The total revenue of 20 A-share liquor listed companies decreased by 5.90% year-on-year, the overall revenue of the industry in the third quarter decreased by 18.47% year-on-year, and net profit decreased by 22.22% year-on-year [3]. The industry’s single-quarter revenue dropped by 18% year-on-year, breaking the single-quarter record during the deep adjustment period of the industry from 2012 to 2015 [3]. However, this performance pressure has been fully reflected in the current valuation, providing layout opportunities for value investors.

: The slowdown in the macroeconomic recovery slope and the underperformance of consumption stimulus policies may have a significant impact on the recovery of the liquor industry [1]. As an optional consumer good, liquor’s performance is highly correlated with macroeconomic activity.

: Although the industry is accelerating clearance, slower-than-expected inventory de-stocking progress may lead to continued pressure on wholesale prices [2][3]. High channel inventory and price inversion still need close attention.

: The trend of a sharp decline in the liquor industry’s performance in Q3 2025 may continue until Q1 2026, negatively affecting investor confidence [3].

: Shenwan Hongyuan believes that the liquor industry has entered the bottom strategic layout period [4]. Kaiyuan Securities pointed out that the liquor industry has entered a deep adjustment period, but the sector is close to the left-side layout range [1].

: Recommend companies with strong brand and channel risk resistance, and clear three-year shareholder return or dividend increase expectations [1]. Regional leaders with stable basic disks, high sales certainty, and competitive advantages in their regions are worth attention.

The liquor sector is in a historic bottom area, and the fourfold bottom characteristics provide a solid foundation for industry reversal. Although short-term performance is under pressure, the valuation has fully reflected pessimistic expectations, and institutional holdings have dropped to a historic low, creating conditions for capital inflow. The market expects a fundamental inflection point in 2026, and it has strategic layout value currently. Investors should focus on inventory de-stocking progress, wholesale price stabilization signals, and the implementation effect of consumption policies, and select high-quality targets with risk resistance and clear shareholder return expectations.

: Monthly sales volume year-on-year changes, high-end liquor wholesale price trends, institutional holding ratio changes, consumption stimulus policy implementation status [1][3][4].