CITIC Securities: Actual sales of Baijiu during the 2026 Spring Festival are expected to remain stable; optimistic about bottom-up allocation opportunities in the Baijiu industry

CITIC Securities Research Report states that the liquor industry is about to迎来Spring Festival peak season marketing activities, with channels continuing to learn and absorb multi-dimensional reform experiences from leading enterprises in channels and products after the distributor conference. CITIC Securities believes that the industry may refocus on market cultivation and consumer education under new reforms and directions, promoting opening and sales and reducing burdens for distributors. Considering various factors such as the gradual stabilization of sales, an extra day during the 2026 Spring Festival holiday, and the consumption scenarios of baijiu during the Spring Festival, CITIC Securities judges that the actual sales of baijiu during the 2026 Spring Festival are expected to remain stable, and there is no need for excessive pessimism. Furthermore, with the clear trend of gradual recovery, the industry’s bottom-position allocation opportunities are optimistic. It is expected that the beer industry will experience a gentle recovery at the bottom in 2026, and it is recommended to focus on industry leaders with strong channel control and brand premium capabilities.

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Alcohol｜Q4 2025 Liquor Holdings Decrease Month-on-Month, Spring Festival Baijiu Sales Expected to Remain Stable

In Q4 2025, the proportion of liquor holdings in mainland funds’ heavy positions is 6.25% / down 0.64 percentage points month-on-month; the food and beverage sector holdings are 7.00% / down 0.54 percentage points; northbound funds’ holdings are 3.93% / down 0.66 percentage points. The baijiu industry is about to迎来Spring Festival peak season marketing activities, with channels continuing to learn and absorb multi-dimensional reform experiences from leading enterprises in channels and products after the distributor conference. We believe that the industry may refocus on market cultivation and consumer education under new reforms and directions, promoting opening and sales and reducing burdens for distributors. Considering various factors such as the gradual stabilization of sales, an extra day during the 2026 Spring Festival holiday, and the consumption scenarios of baijiu during the Spring Festival, we judge that the actual sales of baijiu during the 2026 Spring Festival are expected to remain stable, and there is no need for excessive pessimism. Furthermore, with the clear trend of subsequent gradual recovery, we are optimistic about the bottom-position allocation opportunities in the baijiu industry. It is expected that the beer industry will experience a gentle recovery at the bottom in 2026, and it is recommended to focus on industry leaders with strong channel control and brand premium capabilities.

Funding Environment: In Q4 2025, mainland funds’ liquor holdings decreased significantly, with northbound funds reducing allocations.

According to Wind, in Q4 2025, the proportion of food and beverage holdings in mainland funds’ heavy positions is 7.00% / down 0.54 percentage points, with current fund holdings close to 2017 levels. The proportion of liquor holdings in mainland funds’ heavy positions is 6.25% / down 0.64 percentage points, with overall holdings decreasing, exceeding the standard allocation ratio for the liquor industry by 3.62 percentage points, a decrease from the 3.98 percentage points over-allocated in Q3 2025; in terms of individual stocks, the stocks with the largest increase in fund holding proportion in Q4 2025 are Yingjia Gongjiu (+0.47 ppts), while stocks with significant reductions include Bai Run Shares (-1.79 ppts), Gujinggong Liquor (-1.43 ppts), Tsingtao Beer (-1.28 ppts), Yanjing Beer (-0.75 ppts). Northbound funds’ holdings account for 3.93% / down 0.66 percentage points from Q3 quarter-end. In terms of share changes, compared to Q3, Q4 saw significant increases in holdings of Tianyoude Liquor (+214.1%), Yilite (+41.0%), Jinzenshi Liquor (+31.4%), CITIC Niyah (+27.4%), Bai Run Shares (+23.0%), and notable reductions in Heji Mountain (-82.2%), Shuijingfang (-66.5%), Zhujiang Beer (-57.2%), Shede Spirits (-56.6%), Guyue Longshan (-54.0%), Jiugui Liquor (-21.8%), Wuliangye (-20.3%).

Baijiu: Leading companies accelerate consumer focus and actively promote reforms of existing channels.

We believe that since 2026, the industry has experienced many major events and changes, driving channel upgrades and breakthroughs in the baijiu industry. In the short term, we observe that leading baijiu companies are actively embracing consumers, with unprecedented enthusiasm for consumer outreach and education; mid-tier companies are appropriately lowering prices to maintain market volume and price balance; lower-tier companies are halting production and clearing inventories. In the long term, a “consumer-centric” channel collaboration system is expected to become the core competitiveness in the next industry cycle, requiring companies to gradually enhance customer acquisition, service, and scene operation capabilities. Under the new market cultivation, the industry as a whole is expected to benefit from the current efforts to acquire new consumers and improve consumer education.

Beer: Structural upgrades continue, high-quality development drives value growth.

According to data from the National Bureau of Statistics, from January to November 2025, the total output of industrial-scale enterprises’ beer was 33.18 million kiloliters, a year-on-year decrease of 0.3%, with industry output slightly declining. Industry concentration remains high, with competition increasingly focusing on value chains and product quality. The trend of consumers diversifying and pursuing high-quality lifestyles places higher demands on brand building, scene penetration, and channel control for breweries. In terms of channels, catering channels are experiencing a bottoming and gentle recovery, but channel markup rates and store acquisition efficiency have not yet returned to pre-pandemic levels; non-draft channels are still rapidly expanding, with the penetration of instant retail and other time-sensitive channels accelerating. We believe that in 2026, the beer industry will experience a gentle recovery at the bottom, with overall volume stable and prices rising, and recommend focusing on industry leaders with firm strategic execution, strong channel control, and brand premium capabilities.

Risk Factors:

• Macroeconomic consumption demand falling short of expectations
• Intensified competition in the baijiu and beer industries
• Market performance of core baijiu products’ prices below expectations
• Channel inventory risks in the baijiu industry
• Consumption recovery in catering falling short of expectations
• Food safety issues, etc.

Investment Strategy

The baijiu industry is about to迎来Spring Festival peak season marketing activities, with channels continuing to learn and absorb multi-dimensional reform experiences from leading enterprises after the distributor conference. We believe that the industry may refocus on market cultivation and consumer education under new reforms and directions, promoting opening and sales and reducing burdens for distributors. Considering various factors such as the gradual stabilization of sales, an extra day during the 2026 Spring Festival holiday, and the consumption scenarios of baijiu during the Spring Festival, we judge that the actual sales of baijiu during the 2026 Spring Festival are expected to remain stable, and there is no need for excessive pessimism. Furthermore, with the clear trend of subsequent gradual recovery, the industry’s bottom-position allocation opportunities are optimistic. It is expected that the beer industry will experience a gentle recovery at the bottom in 2026, and it is recommended to focus on industry leaders with strong channel control and brand premium capabilities.

(Source: People’s Financial News)