--- title: "CITIC Securities: After the liquor sector is cleared, the bottom is evident; layout of strong leaders + growth targets that are cleared first" type: "News" locale: "en" url: "https://longbridge.com/en/news/255553801.md" description: "China Merchants Securities released a research report indicating that the liquor sector is gradually showing signs of bottoming out after the disclosure of the 2025 semi-annual report. Although the impact of the \"liquor ban\" policy is still present, the second and third-tier companies have been thoroughly cleared out, while leading enterprises show strong resilience. It is expected that the impact of policies on sales will weaken in Q3 2025, but consumer power has not improved, and sales during the double festival will still decline. The clearing of leading liquor companies' financial statements is seen as an industry turning point, and future demand for liquor is expected to recover, with price indicators turning positive in 2026, which will drive inflation and corporate profits upward" datetime: "2025-09-02T06:24:03.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/255553801.md) - [en](https://longbridge.com/en/news/255553801.md) - [zh-HK](https://longbridge.com/zh-HK/news/255553801.md) --- # CITIC Securities: After the liquor sector is cleared, the bottom is evident; layout of strong leaders + growth targets that are cleared first According to the Zhitong Finance APP, China Merchants Securities released a research report stating that the liquor sector's semi-annual reports for 2025 have been disclosed. Under the constraints of the "liquor ban" in Q2 2025, the sector has accelerated its clearance, with second and third-tier enterprises clearing out relatively thoroughly, while leading enterprises show considerable resilience, still needing to clear market burdens. Looking ahead to Q3 2025, the policy's impact on sales is marginally weakening, but consumer power has not yet improved, and demand scenarios remain constrained. It is expected that sales during the double festivals will still see a decline of over double digits. The firm believes that the clearance of leading liquor companies' financial statements will be a key signal of an industry turning point, which is also expected to reshape expectations in the industry, channels, and capital markets, with the industry's bottom gradually becoming apparent. Considering that the price indicators in 2026 are expected to turn positive, which may drive inflation and corporate profits up, liquor demand is expected to continue to recover. ## Key points from China Merchants Securities are as follows: **In Q2 2025, the liquor industry accelerated its clearance under the "liquor ban," with second and third-tier enterprises clearing out relatively thoroughly, while leading enterprises show considerable resilience, still needing to clear market burdens.** Looking ahead to Q3 2025, the policy's impact on sales is marginally weakening, but consumer power has not yet improved, and demand scenarios remain constrained. It is expected that sales during the double festivals will still see a decline of over double digits. The clearance of leading liquor companies' financial statements will be a key signal of an industry turning point, which is also expected to reshape expectations in the industry, channels, and capital markets, with the industry's bottom gradually becoming apparent. Considering that the price indicators in 2026 are expected to turn positive, which may drive inflation and corporate profits up, liquor demand is expected to continue to recover. In Q2 2025, the liquor industry's revenue/net profit attributable to the parent company/cash collection was 88.1 billion yuan/31.2 billion yuan/105.2 billion yuan, down 5.0%/-7.5%/-3.2% year-on-year. The strong continue to be strong, while the financial statements of other liquor companies are gradually starting to clear. In H1 2025, the liquor industry's revenue/net profit attributable to the parent company/cash collection were 241.5 billion yuan/94.6 billion yuan/258.2 billion yuan, down 0.9%/-1.2%/+7.0% year-on-year; in Q2 2025, the liquor industry's revenue/net profit attributable to the parent company/cash collection were 88.1 billion yuan/31.2 billion yuan/105.2 billion yuan, down 5.0%/-7.5%/-3.2% year-on-year. In Q2 2025, affected by the "liquor ban" policy, the industry's demand side was under pressure, and the liquor industry entered a deep adjustment phase, with a significant decline in growth rate. The net profit growth rate was the lowest in the past 15 years of this cycle, and it has not yet reached the peak of quarterly profit decline in the industry between 2012 and 2014, indicating a continuation of the "enterprise suffering period." Excluding Moutai, in Q2 2025, the industry's revenue/net profit attributable to the parent company/cash collection were 48.4 billion yuan/12.6 billion yuan/66.3 billion yuan, down 13.1%/-31.4%/-2.3% year-on-year. The significant decline in net profit accelerates the industry's clearance, with leading enterprises such as Wuliangye, LZLJ, and Shanxi Fenjiu remaining relatively stable, while second and third-tier liquor companies experience a significant decline in net profit, truly reflecting the cautious attitude of market demand and distributors' cash collection. Looking ahead to Q3 2025, it is expected that the clearance of liquor companies' financial statements will continue to accelerate, with leading enterprises possibly moving from initial clearance to deep clearance, while second and third-tier enterprises continue their previous adjustments. **High-end strong players remain strong, with most liquor companies' contractual liabilities continuing to decline quarter-on-quarter, and cash flow is under significant pressure.** **In terms of operational performance** High-end liquor has been significantly impacted by policy changes, with wholesale prices under pressure. However, leading companies with strong brands and channel capabilities still show resilience in performance. Moutai has reasonably slowed down, while Wuliangye and LZLJ experienced slight declines in Q2 2025, which aligns with previous expectations. Demand for sub-high-end liquor is under pressure, but due to different adjustment rhythms, company performances are diverging. Attention should be paid to the marginal increments brought by new products and new channels. Fenjiu's core products are experiencing growth, SCSF has initiated adjustments, Shede is recovering from a low base, and JiuGuiJiu continues to undergo deep adjustments. The real estate liquor sector is gradually clearing out significantly, with Gujing's provincial support still showing resilience. Yanghe, Jinshiyuan, Yingjia, and KouziJiao are reflecting substantial performance clearances, while LAO BAI GAN JIU remains stable. **Contract Liabilities and Cash Flow** In Q2 2025, the overall contract liabilities of the liquor sector amounted to 37.05 billion yuan (yoy -1.8%, qoq -15.4%), with a year-on-year growth rate turning negative and a slight narrowing of the quarter-on-quarter decline compared to Q1 2025. Most liquor companies experienced varying degrees of year-on-year and quarter-on-quarter declines in contract liabilities. In Q2 2025, the overall willingness of distributors to collect payments significantly decreased, although some leading companies were still able to motivate distributors. Attention should be paid to the structural changes in channels during the industry's adjustment period, as excellent companies can bind more quality distributor resources at the industry's bottom. The overall sales collection in the liquor industry faced pressure in Q2 2025. Among high-end liquors, only Wuliangye saw a year-on-year increase in collections, which is speculated to be related to platform companies, while both Moutai and LZLJ experienced declines both year-on-year and quarter-on-quarter. Among sub-high-end and regional famous liquors, Gujing and SCSF showed relatively stable collections, while other companies faced significant pressure on cash collections, further highlighting the weak willingness of distributors to collect payments. **Structural Downward Pressure on Gross Margin, Rigid Expenses Weaken Industry Profitability** In Q2 2025, the gross margin of the liquor sector was generally under pressure, mainly due to factors such as pressure on wholesale prices and structural decline. The gross margin of high-end liquor slightly decreased, the year-on-year decline of sub-high-end liquor gross margin expanded, and the performance of regional famous liquor gross margins varied. To cope with price declines and intensified competition, most companies have seen an increase in expense ratios year-on-year. However, some companies have continued to promote cost reduction and efficiency improvement through digitalization and refined channel management, leading to a decrease in expenses. The pressure on gross margins and rigid expenses has further led to a general decline in the profitability of liquor companies, although some companies have seen improvements, such as Shede's recovery from a low base and Gujing and LAO BAI GAN JIU's ongoing expense control. **Risk Warning:** Economic environment disturbances, demand below expectations, intensified competition, and channel clearances not meeting expectations ### Related Stocks - [600519.CN](https://longbridge.com/en/quote/600519.CN.md) - [000568.CN](https://longbridge.com/en/quote/000568.CN.md) - [000858.CN](https://longbridge.com/en/quote/000858.CN.md) - [600779.CN](https://longbridge.com/en/quote/600779.CN.md) - [600559.CN](https://longbridge.com/en/quote/600559.CN.md) ## Related News & Research - [09:25 ETThe Brothers That Just Do Gutters Encourages Homeowners to Prepare for the Great American Leaf Drop](https://longbridge.com/en/news/296235825.md) - [Gavin Newsom is bailing out utility companies — and abandoning wildfire victims](https://longbridge.com/en/news/296006623.md) - [China NMPA clears InnoCare Phase III trial of mesutoclax-azacitidine in treatment-naive AML](https://longbridge.com/en/news/296164458.md) - [09:47 ETHi Vanilla. 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