Huachuang Securities: Liquor companies refocus on flagship products, the industry enters a period of bottoming out and differentiation after 26 years.

HuaChuang Securities released a research report stating that in 2026, the white wine industry as a whole has slowed down practically since 25 years, and top white wine companies such as Maotai and Luzhou believe that the industry will still be in a period of adjustment in the coming years. Many white wine companies have indicated that they will reduce unnecessary expenses, focus more on costs for consumers, and shift their focus back to flagship products. On the distribution side, distributors' cash flow has improved marginally, and confidence is gradually increasing, with the consensus that the worst period has passed. After the Spring Festival, the high-end Maotai price remained firm, with Feitian stable above 1600 yuan, and Puwu maintained at around 800 yuan, better than expected. Combined with feedback from various channels, the decline in white wine sales compared to last year has narrowed to around 10%. The industry has reached a period of differentiation and bottoming out in 26 years. Commercial group purchases are still the weakest in terms of demand, while the mainstream scenes remain stable. HuaChuang Securities' main points of view are as follows: Spring Sugar observation: The overall enthusiasm for industry participation has declined, with traditional exhibitions cooling down, but new retail and new wine-drinking showing significant improvement. The number of participants from white wine companies at this year's Spring Sugar has further decreased, with Maotai, a leading white wine company, absent from the hotel exhibition, and small and medium-sized brands becoming the main force at the exhibition. Companies have generally reduced their expenses during the sugar and wine festival, moving towards more precise marketing and consumer interactions. The traditional commercial role of the sugar and wine festival continues to weaken, and the industry's marketing model is transitioning towards effectiveness. Distributors have generally adopted a cautious and wait-and-see attitude, with a low willingness to represent new products. However, unlike the cooling down of traditional exhibitions, the heat of new retail and new wine-drinking has significantly increased this year. The "waima" forum organized by Meituan was crowded inside and outside, and Lu liquor was in high demand. Maotai's Ezhu brand and Gu Jing Gongshen Liquor had their own exhibitions, and a special area for health liquor was set up at the Spring Sugar. Behind the calm of traditional formats and the heat of new formats lies the intergenerational switch of consumption and the shift in demand. After the 80s, 90s, and 00s become the main consumers of alcoholic beverages, they pay more attention to product quality, self-comfort attributes, and ease of purchase. Spring Sugar considerations: 2026 marks not only the bottoming out of the white wine cycle, but also the beginning of a new era. On the enterprise side: Moving from virtual to real requires efficiency, focusing on the consumer end and transformation. Maotai and other leading white wine companies withdrew from the exhibition, and a consensus is forming that emphasizes the shift from "channel-centric" to "consumer-centric". The position of distributors is weakening, and the direct link to consumers has become a core issue. Maotai has pioneered the direct-to-consumer transformation in the industry, reconstructing its business model through iMaotai and leading the industry in a generational transformation. White wine companies have generally slowed down their practicality in 26 years, with top companies such as Maotai believing that the industry will still be in an adjustment phase in the next two years. Many white wine companies have indicated that they will reduce unnecessary expenses, focus more on consumer costs, and shift their focus back to flagship products. On the distribution side: The worst point is expected to have passed, with marginal improvements in cash flow, inventory, and price per batch. Firstly, there has been a marginal improvement in distributors' cash flow, and they are gradually becoming more confident, with a consensus that the worst point has passed. Secondly, leading white wine companies have actively reduced their inventory, with Maotai having virtually no stock, Wuliangye Yibin's inventory reduced to within one month, and national Huangjiu reduced to around two months. Small and medium-sized white wine companies have passively reduced inventory since 24 years; regional white wine companies have achieved a basic balance between procurement and sales, with inventory being stable and manageable. Thirdly, the high-end Maotai prices remained firm after the Spring Festival, with Feitian stable above 1600 yuan, and Puwu maintained at around 800 yuan, better than expected. On the consumer side: More rational, more diverse. On one hand, white wine consumption has become more rational, with consumers paying more attention to cost-effectiveness when purchasing products. This year, the core flagship products of various price ranges performed well after adjusting prices to increase sales volume. On the other hand, the demand for wine consumption has not significantly decreased, but has become more diversified. Wine consumption is gradually shifting from traditional business banquets and social drinking to more personal gatherings, home drinking, and leisurely new scenes. Younger consumers have a preference for low-alcohol, healthier products. Industry feedback: Sales decline has narrowed, with regional differences still present. Combined with feedback from various channels, the year-over-year decline in sales has narrowed to about 10%, marking a period of differentiation and bottoming out for the industry in 26 years. Demand for commercial group purchases remains the weakest due to economic impact, while the mainstream consumer scenes remain stable. In terms of price bands and brands, national circulation-type premium white wines (Maotai + Wuliangye Yibin + Luzhou) succeeded in increasing demand by lowering prices, with the mid-range 300-600 yuan category bearing the brunt of the impact. Most brands have downgraded to below 300 yuan, and local wine stocks have remained high and slow to adjust, with the adjustment speed in the inventory cycle slower than that of premium wines. These local brands are exploring incremental markets in towns through lower-priced product structures. Individual stock feedback: Operating acceleration reaches bottom, with Maotai's sales shining. Maotai Feitian's sales have performed well, with post-holiday price stability better than expected. In Q2, the company adopted a non-standard consignment system, and the channel's willingness to cooperate is currently high. Wuliangye Yibin's market share has increased significantly during the Spring Festival, and the company plans to reduce channel costs from April to July, while reducing shipments in line with the off-season pricing. Lao Jiao's strategy is clear and decisive, with Huangdi Guojiao firmly maintaining prices and reinforcing promotions for low-alcohol products. Fenjiu's Spring Festival performance surpassed expectations, with stable channels planning to enhance promotions for traditional products such as Laobaifeng, Wenchuang Wine, and Ezhu brand. Sujiao's performance in the 100 yuan price range has been good, with Hai Qi and Daya achieving good sales feedback. Yanghe has recently adjusted its internal structure and personnel distribution, awaiting future actions. Jiangsu King's Luck Brewery Joint-Stock has upgraded its national strategy. Huijiu aims for low single-digit growth, with Gujing performing better outside the province, and the turnover of Gu 5/8/16 is relatively good. Yingjiadongcang's channel profit is slightly higher than its competitors, and it has launched Gong 3/5 as a supplement. Shede/Shuijing's sales decline has narrowed, and the channels are starting to stabilize. Investment advice: Industry differentiation at the bottom, Maotai leads the turning point HuaChuang Securities believes that the era of unilateral downward movement in the white wine sector ended after 25 years, and 26 years may enter a period of bottoming out and differentiation, driven by both performance and new demand. At the current position, the company first recommends Kweichow Moutai (600519.SH), which has significantly expanded its business and has high operational certainty and dividend yield. It also recommends Wuliangye Yibin (000858.SZ), which may outperform expectations in terms of sales, with accelerated sales clearance on its financial statements. The company suggests focusing on Anhui Gujing Distillery (000596.SZ), which has strong demand from the public and may recover significantly in demand in the future. Additionally, attention should be given to the clearance pace of Shanxi Xinghuacun Fen Wine Factory (600809.SH) and Luzhou Laojiao (000568.SZ), as well as the launch of new products such as Kuaijishan Shaoxing Rice Wine and the innovative variety ZJLD (06979) for potential catalysts. Risk warning Continued weakness in macro demand, intensified industry competition, etc.