Huachuang Securities: It is expected that the sales of white wine during the Spring Festival will decrease compared to the National Day and Mid-Autumn Festival, but the decrease will narrow and improve. Definitive allocation of Mao Wugu, preferential selection of Old Cellar Fenyang wine, and resilience in the reverse rebound.

Huachuang Securities released the Chinese New Year and Sichuan Baijiu research feedback, stating that the expectations for Chinese New Year sales are not high in the previous channels and markets. It is expected that the decline in Chinese New Year sales compared to the Mid-Autumn Festival and National Day may narrow and improve. It is recommended to focus on Maotai and Wuliangye for certainty, and to select Luzhou Laojiao and Fenjiu for reversal and elasticity. Currently, liquor enterprises on the supply side are generally pragmatically reducing speed to ease pressure, actively assisting channels in digesting inventory. The demand side is still flat in the short term, with better performance in the 100-300 yuan mass market price range. Under the policy transmission next year, the terminal demand for Baijiu is expected to gradually warm up. The valuation side is currently at a relatively low level, and the dividend yield provides a thick safety cushion. In the short term, it is recommended to pay attention to the marginal dynamics of various indicators for the Chinese New Year, and the long-term dimension of value space has now emerged. Specifically: From the perspective of profit target certainty, Maotai and Wuliangye Yibin are the top choices for the bottom, along with Gujing, which is expected to maintain double-digit growth next year. From the perspective of reversal and elasticity, Luzhou Laojiao, Fenjiu, and Jiangsu King's Luck Brewery Joint-Stock are preferred, and attention is paid to rare liquors. The main viewpoints of Huachuang Securities are as follows: Preface: After retrieving funds in October and November, it is currently a key time for liquor companies to hold distributor conferences, set goals for the next year, and prepare for the Chinese New Year. This week, I went to Sichuan to attend the Wuliangye Yibin 1218 distributor conference and visit and research many liquor companies and channels. The core feedback is as follows: Channel observation before stocking up for the Chinese New Year: pragmatic slowing down and downgrading, price stability for mass market brands. This year, due to weak demand, channels have been affected in terms of confidence, profits, and funds. The pace has been delayed and disrupted compared to previous years. First, most liquor companies did not add back incomplete payments and shipments in the fourth quarter, and channel feedback shows that the completion progress of the 24-year payment is generally at 70%-90% before the National Day. Second, the signing of next year's targets and contracts, as well as the Chinese New Year payment dates, are later than usual, leading liquor companies to lower next year's growth rate practically. Third, most brands currently have high inventories, with sales in November and December showing slight improvement compared to the Mid-Autumn Festival and National Day, but still weak. E-commerce has intensified price fluctuations. Brands in the 100-300 yuan price range have shown relatively good quantity and price performance. With the policy transmission next year, Baijiu terminal demand is expected to gradually warm up. The valuation is currently at a low level, and the dividend yield provides a thick safety cushion. In the short term, most brand price ranges have recently fallen, how will the outlook be in the future? Brands will exchange prices for quantity during the Chinese New Year to reduce inventory, and the prices of mass market brands are more stable. Recent observations show that prices of brands in the 400-1000 yuan range have fallen, including Puwu and Gaode Guojiu at around 900 yuan/850 yuan respectively, and Jing Brand Crystal Sword at 390 yuan. Some other mass market brands, such as Fenjiu and Taste Jades, have maintained relatively stable prices. The reasons behind this are mainly due to channel funding recovery in the fourth quarter, weak demand, and increased pressure from e-commerce on prices. Brand behavior may be price-oriented in the short term, potentially leading to long-term damage to brand image. Looking ahead to the Chinese New Year, the industry may focus on digesting inventory and exchanging prices for quantity, and mass market brand price ranges are expected to remain relatively stable. How will Chinese New Year sales be? It is expected that the decline compared to the Mid-Autumn Festival and National Day may narrow and improve. Currently, the expectations for Chinese New Year sales in the channels and markets are not high. It is expected that the decline in Chinese New Year sales compared to the Mid-Autumn Festival and National Day may narrow and improve. This is due to the clear turn in macro policies, with many regions issuing consumer vouchers, which may improve the confidence of both enterprises and residents in consumption. In addition, with poor Mid-Autumn gifting, there may be some improvement in Chinese New Year gifting and business scenes. Chinese New Year is the most important festival of the year, and in recent years, the peak season effect has become more apparent. Historical data shows that the Chinese New Year opening ceremony is a high probability event, as gatherings such as family gatherings and banquets are expected to be resilient. This year's Chinese New Year holiday is one day longer than usual, which may have a certain stimulating effect on demand. Considering the high base of last year's Chinese New Year and the current high inventory levels, it is expected that the focus will be on digesting inventory during the Chinese New Year, and real recovery in demand will need to be observed until the second half of next year.