CITIC Securities: The demand for liquor is weak as the Double Festival peak season approaches; pay attention to key signals of supply contraction

According to the Zhitong Finance APP, China Merchants Securities released a research report stating that based on feedback from the company and channels, the overall performance of the Double Festival in 2025 is flat. Although the industry's sales in August and September improved compared to May and July, there is still a year-on-year decline of about 20%. During the industry's adjustment period, more attention should be paid to changes in the supply side of enterprises. As the peak season continues to unfold, the direction of industry clearing will become clearer, and the bottom will become increasingly evident. Considering that the price indicators in 2026 are expected to turn positive, which will drive inflation and corporate profits, the demand for liquor is expected to continue to recover.

The main viewpoints of China Merchants Securities are as follows:

Demand gap during the Double Festival still exists, and the Matthew effect continues

The overall feedback on liquor sales during the Mid-Autumn Festival and National Day Double Festival in 2025 is flat. Although the industry's sales in August and September improved compared to May and July, there is still a year-on-year decline of about 20%. In terms of price segments and consumption scenarios, the sales of mid-to-low-end liquor are significantly better than those of high-end and sub-high-end liquor, with a considerable demand gap for brands primarily focused on government and business. The sales speed of banquet brands is faster. At the same time, due to price declines, major products such as Moutai series liquor and Wuliangye are gradually capturing market share from competing products at the same price level; the Fenjiu brand continues to maintain certain upward momentum, with the price of Qing20 remaining stable. Although the profits for distributors of Guojiao have slightly narrowed, they are still selling at the original price.

Looking ahead, as the normalization of policy control develops, the recovery of government and business consumption demand will still take time, which will continue to affect the consumption of high-end and sub-high-end liquor in the short term. More attention will be paid to the signals of supply-side contraction at the enterprise level after the peak season of the Double Festival, which will bring significant catalysts to the sector. In terms of price, the short-term sales catalyzed by the Double Festival have led to a slight rebound in the wholesale prices of Moutai and Wuliangye from recent lows. After the festival, considering the year-on-year decline in demand, distributors still have certain payment tasks, and their willingness to collect payments is relatively weak, the wholesale prices in Q4 will still face pressure.

Weak recovery in high-end demand, sub-high-end Moutai series liquor and Fenjiu still possess certain momentum, and demand in the mass consumer market continues

In terms of high-end liquor: Since May, the impact of the "ban on alcohol" has been significant. From the end of July to mid-August, high-end liquor sales began to recover, and the recovery momentum accelerated in September. In the past week, benefiting from the peak demand for liquor during the Double Festival, the wholesale price of Feitian Moutai has slightly rebounded from recent lows; Wuliangye's cost-effectiveness has become apparent, with sales during the Double Festival outperforming competitors. With increased subsidy efforts, the confidence of the distributor system is expected to recover; Guojiao maintains strict control over inventory, with cautious expenditure, and overall prices remain firm, although high-end sales have been somewhat impacted, while low-end and series liquor remain relatively stable.

In terms of sub-high-end liquor: The Moutai series liquor and Fenjiu Qing20 still possess certain momentum. Overall, the price segment of 500-800 yuan has seen a double-digit year-on-year decline, while the 300-500 yuan price segment has remained basically flat. Moutai 1935 has gradually captured the consumer base of other leading sauce liquor brands due to price declines, and the banquet market's slight increase has somewhat compensated for the decline in government and business demand; the price of Fenjiu Qing20 has remained stable, and the brand still possesses upward momentum.

In terms of mid-to-low-end liquor: The sales of mass liquor are significantly better than those of high-end and sub-high-end liquor, with products for mass consumption (such as banquet consumption) selling faster. Although the number of tables and drinking volume per banquet in 2025 has decreased, the number of banquets remains relatively firm. The potential of the Yingjia Dongcang series continues, with Dong6 still increasing its market share in core markets. The performance of light bottle liquor from liquor companies is outstanding, with Fenjiu's glass Fenjiu continuing to sell at the original price, fully aligning with the current changes in consumption trends Investment Advice: Demand Remains Weak as the Double Festival Peak Season Approaches, Focus on Key Signals of Supply Contraction

As the industry enters the Double Festival peak season, overall feedback is tepid, with a month-on-month improvement but still about a 20% demand gap year-on-year. During this industry adjustment period, more attention should be paid to changes in the supply side of enterprises. As the peak season unfolds, the direction of industry clearing will become clearer, and the bottom will become increasingly evident. Considering that the price index is expected to turn positive in 2026, which may drive inflation and corporate profits up, the demand for liquor is expected to continue recovering.

In terms of targets, we recommend Shanxi Fenjiu (600809.SH), which has a relatively healthy market atmosphere, the industry leaders Guizhou Moutai (600519.SH) and Wuliangye (000858.SZ) under the Matthew effect, and the restrained management of Luzhou Laojiao (000568.SZ). At the same time, pay attention to the potential incremental contributions from Jingjia Gongjiu (603198.SH) and Zhenjiu Lidu (06979), which are adjusting ahead of the industry and innovating in channels and models. Lao Bai Gan Jiu (600559.SH) and Jinhui (603919.SH), which have relatively limited policy impacts and are increasing their regional market shares, should also be noted.

Risk Warning

Subsequent sales may not meet expectations, price performance may fall short of expectations, risks of intensified competition, and channel research data may not reflect the overall situation