Guotai Haitong: Liquor stock prices may turn before demand does, highlighting the industry's reshaping and its "bond-like" asset properties.

Guotai Haitong released a research report stating that policy variables accelerating the consolidation of the liquor industry, the current industry is accelerating towards the bottom of performance, and it is expected that the performance bottom may be reached as early as the first half of 2026. Combined with high-frequency signals such as batch pricing, liquor stock prices are expected to trend before the demand side shows a turning point; at the same time, industry logic is being overturned and reshaped, and share logic will gradually replace quantity-price logic. In the long term, grasp the "bond-like asset" attributes of liquor. Guotai Haitong's main points are as follows: Mid-term: Grasp the "three major bottoms" of the industry, the turning point is approaching. The bank believes that the core contradiction of liquor in the medium-term dimension still lies on the demand side. The essence of industry adjustment is the "three major bottoms" of channel bottom, performance bottom, and inventory bottom revolving around the demand side. In terms of sequence, channel bottom > performance bottom > inventory bottom; for investment, the liquor sector as a pro-cyclical growth stock will only see a trend in allocation opportunities after experiencing a performance bottom. At present, policy variables will significantly shorten the industry adjustment time, and the rhythm currently is at the bottom of channel profits and is accelerating towards the performance bottom. It is expected that the performance bottom may be reached as early as the first half of 2026. Combined with high-frequency signals such as batch pricing, liquor stock prices are expected to trend before the demand side shows a turning point. Perspective of the reform stage: Slow variables accelerating, grasp the changes in liquor attributes. The bank believes that domestic economic structure and population characteristics determine that after experiencing continuous price clearance and brand differentiation, the high-end consumption attributes of liquor will continue to weaken while the fast-moving attributes will continue to strengthen. In this dimension, the growth logic of liquor companies will evolve from quantity-price logic to share logic. Companies with share logic will demonstrate sustained competitive advantages. From mid-term to long-term: From "cyclical growth" to "bond-like asset", reshaping liquor investment logic. In the long term, accompanied by changes in the attributes of liquor, share logic will replace quantity-price logic, weakening the growth potential of most liquor stocks. Liquor may no longer be pro-cyclical growth stocks, with a few stocks internalizing their competitive advantages as "bond-like assets", stable ROE will become increasingly important for pricing liquor. The bank believes that the sector will need a considerable amount of time to complete this pricing switch, with the cost being the industry's need to restructure stable growth expectations and stable dividend and repurchase expectations. Risk factors: Food safety, industry policy adjustments, etc.