CITIC Securities: The baijiu sector is currently in the late stage of cyclical bottoming and the tail end of clearing.

CITIC Securities research report states that the baijiu sector is currently in the late stage of cyclical bottoming and the tail end of clearing, with bottoming signals such as price, inventory, and expectations already evident. Looking ahead to 2027, it is judged that supply and demand in the baijiu industry are expected to achieve a new equilibriumdemand is expected to see a weak recovery under macro catalysts and a low base, while supply is expected to contract further but competition will intensify. In the long term, the industry is expected to steadily enter a benign repair phase. Although there is still some pressure on the domestic demand side at present, current valuations have already reflected considerable pessimistic expectations for the industry's medium- to long-term development. Considering that the baijiu sector already possesses strong dividend value and the potential expectation gap from a shift in future demand expectations, it is recommended to increase allocation to leading liquor companies at the industry bottom.