CITIC Securities: Optimistic about the recovery of the liquor sector, recommends increasing holdings in the liquor industry on dips

CryptocurrencySniper · 2026-03-01T05:33:45+00:00

CITIC Securities research report indicates that by the 2026 Spring Festival, Baijiu sales will be concentrated, with prominent advantages for famous brands. The consumption rebound will boost investor sentiment. The Baijiu industry is at a long-term bottom, and it is recommended to increase allocations on dips. The beer industry is expected to experience a mild recovery, with a focus on leading companies.

CryptocurrencySniper

2026-03-01 05:33:45

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CITIC Securities Research Report states that the Spring Festival in 2026 continues the characteristics of the past 2-3 years: on one hand, consumers’ awareness of brands has significantly increased, with well-known liquor sales clearly outperforming mid-tier and below brands; on the other hand, white liquor sales are more concentrated during the Spring Festival peak season, and post-festival sales are expected to gradually stabilize. Overall, a solid Spring Festival provides the foundation for stable sales in 2026. Considering that the white liquor industry has been adjusting for many years and is at the bottom of a long-term cycle with low market expectations and low holdings, any marginal improvement is expected to greatly boost investor sentiment, and we are optimistic about a recovery in the white liquor sector. It is recommended to increase holdings during dips. We expect the beer industry to gently recover from its bottom position in 2026, with an overall trend of stable volume and rising prices. Focus should be on leading companies with strong channel control, firm strategic execution of structural upgrades, and brand premium capabilities.

Full Text:

Alcohol｜2026 Spring Festival Meets Expectations, Differentiation Remains the Main Theme

The Spring Festival in 2026 continues the features of the past 2-3 years: on one hand, consumers’ brand awareness has significantly increased, with well-known liquor sales clearly outperforming mid-tier and below brands; on the other hand, white liquor sales are more concentrated during the Spring Festival peak season. Due to changes in demand structure among tobacco shops, distributors, and consumers, demand before the festival has been sufficiently released, and demand during the festival remains stable, mainly driven by real estate liquor. Overall, a solid Spring Festival lays the groundwork for stable sales in 2026. We expect leading brands to maintain a “gradual adjustment and growth” strategy, increasing market share and steadily reducing inventories.

By Price Segment: Top brands boost volume, real estate liquor compensates for profits, and overall sales stabilize and rebound.

According to industry media such as Sugar & Wine Express and Liquor Industry Journal, we estimate that high-end liquor (above 800 yuan) may achieve flat growth in sales in 2026, with demand increasing significantly before the festival; the sub-high-end (400-800 yuan) price segment will see a sharp decline, with both mid- and high-end products under pressure, with declines ranging from 10% to 50%; mass-market liquor (100-300 yuan) will see a significant increase in concentration, with some products gaining notable market share during the Spring Festival. We expect top brands to grow at double-digit rates year-over-year; products below 100 yuan remain stable overall, with no obvious peak season effect, continuing to contribute stable profits to channels.

White Liquor Valuations Remain at Historical Lows, Suitable for Long-term Investment

Given that sales are gradually stabilizing, the 2026 Spring Festival holiday includes an extra day, and considering various consumption scenarios, we estimate that actual white liquor sales during the festival in 2026 will remain stable, with top brands holding a competitive advantage. Currently, the white liquor sector’s P/E ratio (TTM) is about 19x, at the bottom of the medium- to long-term range, reflecting the 22%/13%/7%/15% percentile over 3/5/10 years and since listing, indicating that many pessimistic expectations are already priced in. Additionally, since 2024, leading companies have steadily increased shareholder returns. According to Wind data, dividend payout ratios for top companies are generally above 65%, further enhancing investment safety margins. As of February 13, 2026, the dividend yields for Kweichow Moutai, Wuliangye, Shanxi Fenjiu, and Luzhou Laojiao are 3.48%, 5.42%, 2.17%, and 5.12%, respectively.

Risk Factors:

Macroeconomic consumption demand underperforming expectations
Intensified competition in the white liquor and beer industries
Market performance of core white liquor products below expectations
Channel inventory risks in the white liquor industry
Less-than-expected recovery in catering consumption
Food safety issues

Investment Strategy:

Considering that the white liquor industry has been adjusting for many years and is at the bottom of a long-term cycle with low market expectations and low holdings, any marginal improvement is expected to significantly boost investor sentiment. We are optimistic about a recovery in the sector. It is recommended to increase holdings during dips. We expect the beer industry to gently recover from its bottom position in 2026, with an overall trend of stable volume and rising prices. Focus on leading companies with strong channel control, firm strategic execution of structural upgrades, and brand premium capabilities.

(Source: Southern Finance Network)

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