Hua Chuang Securities: Baijiu Mid-Autumn stockpiling begins, with highlights and divergence latent in a weak recovery.

Hua Chuang Securities released a research report stating that the bottoming signals for baijiu are gradually becoming clearer, making it advisable to sow seeds for the long term and seize quarterly right-side improvement opportunities in the short term. In Q2, the sector's accelerated clearing, and current bottoming signals are becoming evident. Opportunity selection focuses on: First, it is recommended to "sow seeds" from a 1-2 year perspective in a batch of high-quality blue-chip white horse stocks whose fundamentals have actually emerged from winter but whose stock prices are still enduring severe cold; Second, from the perspective of quarterly improvement, select right-side opportunities, with yellow rice wine and snack volume retail opportunities worth focusing on. Specifically: the liquor Q2 financial reports are accelerating their bottoming, and the second half of the year is expected to gradually recover on a low base; mass consumer goods should be positioned at the bottom in high-quality blue chips, seizing marginal improvement opportunities. The main views of Hua Chuang Securities are as follows: Mid-Autumn stockpiling begins, and the industry is expected to shift from supply clearing to supply-demand rebalancing, overall showing characteristics of restrained supply and weak demand recovery This week, baijiu officially entered the Mid-Autumn and National Day stockpiling period, and high-end famous liquor gift-giving has also begun. In recent years, the Mid-Autumn and National Day period for baijiu has generally been lackluster. This year, against a low base, the year-on-year and quarter-on-quarter sentiment is expected to improve, and the industry is expected to shift from supply clearing to supply-demand rebalancing, overall showing characteristics of restrained supply and weak demand recovery. Specifically, on the supply side, liquor companies and channels generally no longer push inventory, top liquor companies have normal payment collection, Lao Jiao promotes payment collection through price-following, Jiangsu King's Luck Brewery Joint-Stock actively pursues the ten-billion target layout, channels have fully cleared earlier inventory, and selling pressure is limited. On the demand side, this week high-end gift-giving improved slightly by a single-digit year-on-year, Moutai and Wuliangye sales and payment collection are smooth, mass retail demand is acceptable, and the 300-800 yuan sub-high-end business demand continues to face pressure. Specifically, by price band: Ultra-high-end Moutai: Mid-Autumn Feitian volume release with firm prices, series liquor sales exceeding expectations. Based on channel feedback, offline traditional channels have normal Feitian payment collection and delivery rhythm, currently about 80% progress. After the September quota arrives, Feitian sales continue to be in short supply, wholesale prices remain firm, rigid demand for high-end gift-giving has certain year-on-year growth, and channels expect Feitian wholesale prices to have strong support around 1,700 yuan before and after Mid-Autumn, and the company can also effectively stabilize prices through iMoutai. At the same time, Moutai series liquor progress exceeds 80% with good sales, Moutai 1935 volume and price both rebounded, mainly benefiting from the strong brand siphon effect, as well as the effectiveness of price setting and expense policies under market-oriented reform. The consignment model for high value-added products continues to advance, currently with limited volume, balanced supply and demand, and stable prices. Wuliangye and Lao Jiao strategy divergence: Pu Wu held prices earlier, prices slightly fell after this week's shipment, Lao Jiao fully follows prices to collect payments. Wuliangye Yibin continued to control goods and hold prices in Q3, tightened channel policies, earlier wholesale prices rebounded to 800 yuan+, after this week's peak season release wholesale prices fell back to 770-780 yuan, channel feedback indicates subsequent prices depend on the company's supply rhythm. But at the same time, under Wuliangye Yibin's strong brand effect, payment collection and turnover performance are excellent, some regions feedback that full-year payment collection has been completed, sales are flat compared with the same period in 2024. On the contrary, the strategy for high-degree Guo Jiao shifted to full price-following to collect payments. It is judged that this strategy will have better effects in base markets such as Sichuan, while markets such as Henan and Shandong mostly take a wait-and-see approach, and low-degree Guo Jiao maintains stable volume, price, and share. Sub-high-end overall under pressure, mass price band resumes growth, regional leaders destock Channel feedback indicates that the 300-800 yuan price band continues to face pressure due to consumption downgrading and weak business scenarios, with some demand sinking to the 100-300 yuan price band. By brand, Jian Nan Chun sales feedback is flat to slightly down, Fenjiu Qing 20 in Shandong also feedback slightly down, long-tail brands still decline by double digits. At the same time, the 100-300 yuan mass price band resumed year-on-year growth. Regional leaders such as Anhui Gujing Distillery, Jiangsu King's Luck Brewery Joint-Stock, and Yingjia benefited from the recovery of mass banquets in the 100-200 yuan brand sales, generally achieving growth from July to August, with marginal inventory destocking. The bank believes there is potential for exceeding expectations in this year's Mid-Autumn peak season. First, this year's holiday effect and base effect are strong, and demand-side year-on-year and quarter-on-quarter sentiment is expected to be good This year's Mid-Autumn and National Day holiday is relatively long (only 3 days apart), and Mid-Autumn Festival falls on the first day of the holiday. The festival effect, holiday effect, and low base effect are strong, and it is judged to have a certain promoting effect on peak season sales year-on-year and quarter-on-quarter sentiment; Second, on the price side, Moutai prices are expected to remain firm at high levels. Currently, after Feitian release, demand absorption is good, high-end gift-giving demand has support. Although Wuliangye Yibin prices have fallen, turnover is excellent; Third, industry inventory is expected to continue to be digested after the peak season, mainly because liquor companies generally do not push inventory during this year's Mid-Autumn and National Day, channel earlier selling has basically ended, and inventory will continue the destocking trend after Mid-Autumn. Risk warnings: continued weak macro demand, intensified industry competition, continued industry clearing.