--- title: "Soochow Securities Co., Ltd.: The main expectation is still the clearing of the liquor industry. From a top-down perspective, prioritize attention on companies that entered the turning point earlier and have leading growth elasticity" type: "News" locale: "en" url: "https://longbridge.com/en/news/255874987.md" description: "Dongxing Securities Co., Ltd. released a research report pointing out that the clearing of the liquor industry is still the main expectation, and it is recommended to pay attention to liquor companies that have entered the turning point early and have leading growth elasticity. It is expected that high-end and sub-high-end products will take time to achieve a balance of volume and price, and it is suggested to focus on individual stocks that have an increase in fragrance share, national expansion, or new product recruitment. In the first half of 2025, the total operating revenue of the liquor sector decreased by 0.3% year-on-year, and the net profit attributable to the parent company decreased by 0.9%. In the second quarter of 2025, the total operating revenue of the liquor sector decreased by 4.7% year-on-year, and the net profit attributable to the parent company decreased by 7.3%" datetime: "2025-09-04T02:32:03.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/255874987.md) - [en](https://longbridge.com/en/news/255874987.md) - [zh-HK](https://longbridge.com/zh-HK/news/255874987.md) generator: "portal-rs" --- # Soochow Securities Co., Ltd.: The main expectation is still the clearing of the liquor industry. From a top-down perspective, prioritize attention on companies that entered the turning point earlier and have leading growth elasticity According to the Zhitong Finance APP, Soochow Securities released a research report stating that the clearing of the liquor industry remains a major expectation. It is important to grasp the main contradictions in the clearing process and the visibility of future performance recovery, prioritizing liquor companies that have entered the turning point earlier and have leading growth elasticity from a bottom-up perspective. Referring to the stock price performance from 2013 to 2016, the liquor cycle from bottoming out to upward recovery does not simply replicate the rotation sequence of high-end → sub-high-end → mid-high-end during the liquor upcycle, but rather focuses on selecting performance-leading targets from the bottom up. The firm expects that it will still take some time for high-end and sub-high-end products to achieve a new balance in volume and price, and suggests paying more attention to certain stocks that have improved fragrance share, nationwide expansion, or new product recruitment alpha. ## Soochow Securities' main viewpoints are as follows: **Q2 scenario impact pressure intensifies, sales performance is put to the test** In the first half of 2025, the liquor sector's total operating revenue decreased by 0.3% year-on-year, with net profit attributable to the parent company down by 0.9%, and net profit excluding non-recurring items also down by 0.9%; in Q2 2025, the liquor sector's total operating revenue decreased by 4.7% year-on-year, net profit attributable to the parent company decreased by 7.3%, and net profit excluding non-recurring items decreased by 7.6%. On a macro level, the business scenario in Q2 2025 was significantly impacted, while personal dining and banquet scenarios were also affected, leading to a decline in demand for high-end and sub-high-end liquor. The year-on-year growth rate of social retail and dining in Q2 2025 fell back compared to Q1, especially since May, when the impact on consumption scenarios intensified: 1) the business scenario has clearly shrunk, putting pressure on the demand for high-end and sub-high-end liquor; 2) the residential dining and banquet scenarios have caused a ripple effect, temporarily suppressing mid-high-end liquor consumption. The pressure on sales has expanded from high-end and sub-high-end to mid-high-end and low-end, with products that lack strong sales and channel foundations continuously facing repayment pressure. At the company level, the performance growth rate of the sector turned negative in Q2 2025, with liquor companies increasing their shift towards long-term adjustments, marginally relaxing repayment and delivery requirements, and prioritizing the clearing of reports and channels to maintain channel order stability and consolidate long-term development foundations. At the channel level, the wholesale prices of high-end and sub-high-end liquor generally declined in Q2 2025, with only a few products like Guojiao and Qing 20 managing to keep price fluctuations relatively controllable through refined control of distribution and inventory management. **High-end liquor slows down in an orderly manner, sub-high-end continues to clear, and real estate liquor accelerates pressure relief** In the first half of 2025, the liquor sector's operating revenue decreased by 0.35% year-on-year, with net profit attributable to the parent company down by 0.9%, and the speed of decline in Q2 was significantly more pronounced than in Q1, primarily due to significant pressure on demand, channel contraction, and liquor companies increasing regulatory efforts for long-term focus. The pre-receipt balance of liquor companies in the first half of 2025 was generally at a low level compared to the past two years, with most high-end and sub-high-end liquor companies showing apparent repayment growth rates lower than revenue growth rates, indicating ongoing repayment pressure in the channels; regional liquor leaders had apparent repayment growth rates slightly better than revenue growth rates, showing relatively more proactive report adjustments. On the sales side, most companies' revenue growth rates fell back along with the apparent repayment acceleration, with pre-receivable balances dropping to cyclical lows. On the cash collection side, as channel credit support tightened, the cash collection growth rates of leading liquor companies were generally not much different from the apparent repayment growth rates. By segment, second-tier sub-high-end liquor companies have strengthened delivery control since Q2 2024, and with a lower base, the year-on-year decline in revenue in Q2 2025 has narrowed; high-end and regional liquor leaders have generally begun to accelerate the release of report pressure starting in Q2 2025, with regional liquor companies clearing more aggressively **Product structure under pressure, net profit margin continues to decline** In terms of gross profit margin, the gross profit margins of high-end liquor, sub-high-end liquor, and regional liquor companies in 25H1 decreased by -0.5, -0.4, and -0.3 percentage points year-on-year, respectively, with product structure and discounts both dragging down the gross profit margin. In terms of expense ratios, most liquor companies saw an increase in sales expense ratios year-on-year in 25H1, with the improvement in sales expense ratios for Luzhou Laojiao, Gujing, and LAO BAI GAN JIU related to refined expense management; as revenue realization weakened in 25H1, most liquor companies experienced a slight increase in management expense ratios year-on-year. In terms of profit growth rates, 25H1 showed high-end (5.49%) > sub-high-end (-3.22%) > real estate liquor (-24.90%), with a decline in product structure and poor sales conversion, leading to a downward test of the gross sales difference for liquor companies, while scale negative effects also had an impact. **Risk Warning:** Risks of insufficient clearance and consumption recovery falling short of expectations, and risks of intensified industry competition ### Related Stocks - [600559.CN](https://longbridge.com/en/quote/600559.CN.md) - [000568.CN](https://longbridge.com/en/quote/000568.CN.md) ## Related News & Research - [St. Galler Kantonalbank (SWX:SGKN) Has Investors Asking A Bigger Question](https://longbridge.com/en/news/296513952.md) - [US Plains HRW Wheat-Basis flat to up with limited trade](https://longbridge.com/en/news/296655424.md) - [13:35 ETMatan Companies Signs Two New Industrial Leases Totaling More Than 92,000 SF in Frederick, MD](https://longbridge.com/en/news/296641992.md) - [13:49 ETVascarta Outlines Proposed Mechanistic Link Between VAS-101's (Vasceptor®) Vascular and Red Blood Cell Effects in Sickle Cell Disease](https://longbridge.com/en/news/296524035.md) - [Slater & Gordon probes civil claim tied to alleged Sydney Swans sexual assault](https://longbridge.com/en/news/296658928.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**