Zheshang: Under the high base number, the pressure is slightly relieved and the sales trend of white wine is improving month-on-month.

Zheshang released a research report stating that due to industry inventory remaining relatively high and a slight decline in industry sales during the Spring Festival period (the impact of the "25-year alcohol ban" is gradually dissipating), the industry's collection progress in the first quarter of 26 was weaker than the same period last year, but overall prices remained strong and stable. With consumer demand gradually recovering, the decline in sales during the Spring Festival in the liquor industry has narrowed significantly. It is expected that the performance of the sector in the first quarter of 26, with a high base number, will still be under slight pressure, but the trend may edge towards improvement. It is expected that in the third quarter of 26 or with a lower base number, overall performance will turn positive, focusing on opportunities for bottoming out in the liquor sector. Key points from Zheshang include: Tracking indicators: The core tracking indicators of liquor companies in the first quarter of 26 are still weak, but prices remain stable. Collection/sales: During the Spring Festival, benefiting from the rigid demand for high-end liquor for gifting and banquets, Maotai's sales helped its collection, with Feitian Maotai's sales increasing by 10%-20% year-on-year, and Wuliangye Yibin's overall sales exceeding 20%. At the same time, the mainstream sales price range is 100-200 yuan, showing accelerated sales. Based on this, it is expected that the collection progress of Kweichow Moutai, Wuliangye Yibin, Jiugui Liquor, ZJLD, and Anhui Yingjiagongjiu may remain stable or slightly improve year-on-year, while regional liquor companies are generally weaker in collection progress compared to the same period last year due to the high base and decline in sales. Prices: Maotai's batch price benefited from the expansion of the C-end consumer group, while Wuliangye Yibin's batch price slightly fell (but cost-effectiveness favors sales performance), and prices of other singular products remain stable. Performance outlook: Kweichow Moutai's performance is strong and certain, while most liquor companies are still under slight pressure. Overall, it is expected that the performance of the liquor industry in the first quarter of 26 will still face general pressure but are entering a phase of narrowing declines. Kweichow Moutai is expected to achieve high-quality steady growth, while most liquor companies are still in the stage of clearing their balance sheets, laying a foundation for long-term development. High-end liquor: Maotai is outstanding. It is expected that Kweichow Moutai will maintain positive growth in the first quarter of 26 after the implementation of series marketing reforms, while Wuliangye Yibin and Luzhou Laojiao may experience a slight decline (with Luzhou Laojiao's Guojiao highly controlling inventory and pricing, while low and medium-end products perform well, overall performance is under pressure). Mid-range liquor: Differentiation is clear. Jiugui Liquor may achieve positive growth due to a low base and contributions from popular products, while She De benefits from the smooth volume increase of mid-range products. Sichuan Swellfun may still face pressure on performance despite stable prices, and Zhenjiu may see positive growth in the first quarter of 26 due to an increase in the Da Zhen model. Regional leaders: Overall under pressure. It is expected that Anhui Gujing Distillery and Jiangsu King's Luck Brewery Joint-Stock will see a decline in performance in the first quarter of 26 due to the high base and weak year-on-year sales, with their balance sheets still in the clearing stage. Anhui Yingjiagongjiu may achieve positive growth due to strong sales and collection in the 100-200 yuan price range. Future prospects: It is expected that the performance of liquor companies in 26 will see marginal improvement, and opportunities for positioning in the bottom of the sector are promising. Taking into account that the liquor sector will begin to enter a period of deep adjustment in the second quarter of 25, and performance will begin to decline in the third quarter of 25, with the gradual recovery of consumer demand, it is expected that the performance of the liquor sector will improve quarter by quarter in 26, turning positive in the third quarter of 26. Continued optimism in the opportunities for bottoming out in the liquor sector, with a strong recommendation for Kweichow Moutai (600519.SH). Also pay attention to: Wuliangye Yibin (000858.SZ) and Anhui Yingjiagongjiu (603198.SH) with strong Beta attributes, Luzhou Laojiao (000568.SZ) and ZJLD (06979), as well as Shanxi Xinghuacun Fen Wine Factory (600809.SH), Anhui Gujing Distillery (000596.SZ), Jiangsu King's Luck Brewery Joint-Stock (603369.SH) with strong Alpha attributes. Risk warning: Consumer recovery is lower than expected; food safety risks; policy risks, etc.