CMSC: Liquor industry continues to consolidate, Moutai performs well in the first quarter of 2026.

CMSC released a research report stating that most liquor companies in the first quarter of 2026 are expected to continue the trend of inventory clearance that began in the third and fourth quarters of 2025, but the decline is relatively narrowing. In the first quarter of 2026, most liquor companies no longer require a strong start to the year, channel inventory pressure continues to release, price adjustments are approaching their lowest point, and companies that adjusted earlier are relatively relaxed. Among them, Maotai's sales performance exceeded expectations, and the increase in Maotai sales in the first quarter could help the company's performance not decline, showing overall strength; Wuliangye Yibin's sales exceeded expectations, and it is expected that the report will continue the trend of clearing inventory burdens. 2026 will be a period of industry bottoming out, and the focus will be on inventory clearance and channel profit recovery of liquor companies. Companies that adjusted early are expected to see marginal improvements in the second half of 2026. The main points of CMSC are as follows: Outlook for the Baijiu sector in the first quarter of 2026: Industry continues to clear inventory, Maotai shines Most liquor companies are expected to continue the trend of inventory clearance that began in the third and fourth quarters of 2025, but the decline is relatively narrowing. In the first quarter of 2026, most liquor companies no longer require a strong start to the year, channel inventory pressure continues to release, price adjustments are approaching their lowest point, and companies that adjusted earlier are relatively relaxed. Overall, Maotai's sales performance exceeded expectations, with Maotai's sales in the first quarter helping the company's performance not to decline, showing overall strength; Wuliangye Yibin's actual sales in the first quarter of 2026 exceeded expectations, and the report is expected to continue the trend of clearing inventory burdens. Laoba and Fenjiu's sales in the first quarter of 2026 have dropped significantly, putting pressure on their financial performance. Looking at individual companies, Maotai's performance is strong, while Laoba and Fenjiu have adjusted earlier and have relatively easy conditions. 1) High-end Baijiu: Maotai's sales performance in the first quarter of 2026 exceeded expectations, with distributors making good progress from January to March, Fu Flying sales growth, post-holiday distributor inventory generally less than half a month, non-standard consignment mode opened, distributor pressure reduced, combined with a price increase on March 31, price transmission further improved, and performance is expected to be significantly better than the industry. Wuliangye Yibin's actual sales in the first quarter of 2026 exceeded expectations, and the report is expected to continue the trend of clearing inventory burdens. Laoba's sales in the first quarter of 2026 dropped significantly, putting pressure on financial performance. 2) Mid-to-high-end Baijiu: Fenjiu's progress was relatively stable in the first quarter of 2026, with a slight decline in sales, Bofi Fen continued to grow, Qing 20 inventory slightly increased and pressure increased, and it is expected that Fenjiu will adjust lightly in the first quarter of 2026. Jiugui Liquor's traditional channels continued to decline in the first quarter of 2026, with additional growth driven by Free Love. Shedoo saw a double-digit increase in sales during the Spring Festival period, followed by a normal decline after the off-season. Sichuan Swellfun continued to maintain a benign price system, and is expected to continue adjusting in the first quarter of 2026. 3) Regional famous wines: Yanghe continued to destock and stabilize prices, with feedback indicating a slight single-digit decline in Hai Zhi Lan and a double-digit decline in the Dream series. Jiangsu King's Luck Brewery Joint-Stock saw growth in Dokai and Daya, while Sika and V series declined. Gujing's feedback indicated that Gu 5 and Gu 8 are relatively steady, Gu 16's growth rate has slowed slightly, Gu 20 is under pressure, and adjustments are expected in the first quarter of 2026. Anhui Kouzi Distillery still faces pressure on collections during the Spring Festival period, with intense competition in core markets, while performance in other markets remains relatively stable. Yemeya performed well during the Spring Festival, strengthening the advantages of Dong 6 and Dong 9, and performance in the first quarter of 2026 is expected to be better than the industry overall. Investment recommendation: Different paces of adjustment, select individual stocks at the bottom The Baijiu sector has returned to a bottoming out point, with clear expectations for first-quarter reports releasing previous pressures. We recommend maintaining a sufficient position in Kweichow Moutai (600519.SH), and recommend Wuliangye Yibin (000858.SZ) (upward pricing in the off-season is a catalyst), Shanxi Xinghuacun Fen Wine Factory (600809.SH), and Anhui Yingjiagongjiu (603198.SH) (continued momentum from Dongcang, expected to lead the way out of adjustments, upgraded to a "strongly recommended" investment rating). Risk factors Unexpectedly weak sales, unexpected price performance, increased competitive risks, and rising cost risks.