Understanding the Market | Alcohol Stocks Decline in Early Trading, Baijiu Continues to Face Pressure, Beer Sales Decline, Institutions Say Policy Impact on Consumption Still Needs Observation

Alcohol stocks fell in early trading. As of the time of writing, CHINA RES BEER dropped 6.37% to HKD 29.4; TSINGTAO BREW fell 5.14% to HKD 51.7; BUD APAC decreased by 3.58% to HKD 8.35; and Zhenjiu Lidu declined 3.87% to HKD 7.45. In terms of news, the overall operating income of 19 listed liquor companies in the third quarter was CNY 96.4 billion, a year-on-year increase of 1.3%; net profit attributable to the parent company was CNY 36 billion, a year-on-year increase of 2.3%; for the first three quarters, the industry's overall operating income was CNY 339.8 billion, a year-on-year increase of 9.7%; net profit attributable to the parent company was CNY 131.8 billion, a year-on-year increase of 10.9%. Additionally, according to data from the China Alcoholic Drinks Association's Beer Branch, the cumulative output of large-scale beer enterprises nationwide in the first three quarters of 2024 was 29.3 million kiloliters, a year-on-year decline of 1.5%. CITIC Securities' research report indicated that the macroeconomic recovery is still underway, with a clear trend of recent policy strengthening. Although the pull on consumption still needs time to be tested, it is expected that the overall attractiveness of consumption allocation will improve under the backdrop of expectations. The cyclical characteristics of liquor are evident, and as a representative consumption industry, there is a demand for allocation