Zheshang: 26Q3 performance continues to show strong divergence; baijiu remains focused on clearing as the main theme.

Zheshang released a research report stating that, with baijiu sell-through expected to decline slightly year-on-year in 26Q3, liquor companies' performance is still expected to be dominated by clearing, continuing strong divergence. The bank remains bullish on investment opportunities in the baijiu sector, which features "attractive valuation + institutional holdings at historical lows + industry at the bottom of its cycle." Key indicators to track going forward are high-end liquor wholesale prices / mass banquet sell-through performance / high-end liquor sell-through performance / inventory digestion speed, etc. Zheshang's main views are as follows: 26Q3 baijiu industry demand remains weak year-on-year, with rigid-demand scenarios showing relatively strong resilience Reviewing baijiu industry sell-through in 26Q3, in July-August the industry benefited from active college-enrollment celebration banquets, with mass banquet sell-through achieving year-on-year growth, while commercial/government and gift-giving consumption scenarios continued to show weak performance; during the double festivals, baijiu sell-through is expected to decline slightly year-on-year, with rigid-demand gift-giving and rigid-demand mass consumption achieving growth, but commercial/government and mid-price mass banquet segments both showing relatively weak year-on-year performance, with weakening mass consumption power being the core reason for the slight downgrade in the mass banquet price structure. The source of double-festival growth has shifted from concentrated pre-festival channel stuffing to scenario operation and inventory turnover. In a stock-market context, industry divergence is significant, and there are still consumption scenarios/strong brands and single products achieving squeeze-style growth (market share gains). Earnings preview: 26Q3 liquor company performance expected to continue strong divergence, with clearing as the main theme Although 25Q3 baijiu sector revenue/profit had already deeply cleared (low base), affected by the baijiu industry's overall sell-through still declining slightly year-on-year in 26Q3, overall 26Q3 baijiu industry performance is expected to still face certain pressure, but liquor companies with active sell-through performance are still expected to record steady performance, such as: Kweichow Moutai/Jiangsu King's Luck Brewery Joint-Stock/Anhui Yingjiagongjiu, etc. Specifically: 1. High-end liquor: Kweichow Moutai expected to continue steady revenue performance in Q3. Kweichow Moutai: In 26Q3, with Feitian volume increased year-on-year, the wholesale price at end-Q3 stabilized in the 1,730-1,760 yuan range, reflecting positive year-on-year sell-through performance (incremental consumer groups are mass high-end consumers, and this consumer group still has substantial room for development, laying a good foundation for Feitian's subsequent volume growth/price stability); although non-standard products still face certain sell-through pressure (weak commercial/government consumption), on a low base, Moutai's 26Q3 revenue is expected to continue steady performance; Wuliangye Yibin: In 26Q3, PuWu sell-through received positive market feedback (high cost-performance, wholesale price stable at 770 yuan+), but the performance side may still face certain pressure (inventory digestion); Luzhou Laojiao: In 26Q3, the company still insists on high-end price positioning, keeping wholesale prices high (820 yuan+) to enhance brand value; Guojiao high-degree sell-through faces slight year-on-year pressure/distribution channel inventory slightly high; Guojiao low-degree and mid-to-low-end products perform relatively stably; 26Q3 performance is expected to continue mid-double-digit decline on a high base. 2. Sub-high-end liquor: 26Q3 sell-through under overall pressure, performance accelerating clearing. Shanxi Xinghuacun Fen Wine Factory: In 26Q3, the Qinghua series benefited from its strong cost-performance, with Qing20 sell-through expected to grow positively; based on the company still being in the destocking phase, 26Q3 company performance is expected to continue the 26H1 clearing state, achieving low-double-digit decline; Jiugui Liquor: Considering the low amount recognized in the company's Pang Dong Lai channel in 25Q3 (low base), the Pang Dong Lai channel may be an important performance increment in 26Q3, but due to weak sell-through of core products, 26Q3 revenue is expected to continue declining, with loss narrowing; Sichuan Swellfun/Shede: Due to weak sell-through in corresponding consumption price bands leading to pressure on core single-product sell-through, 26Q3 performance is expected to decline year-on-year for both. 3. Regional leaders: Performance divergence relatively large, structural downgrade & slight inventory increase. Anhui liquor: Anhui Yingjiagongjiu benefited from the smooth completion of fiscal-year collections, with the Dongcang series showing stable sell-through in 26Q3; 26Q3 revenue/profit growth is expected to achieve slight year-on-year growth; Anhui Gujing Distillery benefited from smooth collections, with market share remaining stable; 26Q3 revenue is expected to perform stably, while profit is significantly weaker than revenue growth due to structure and other factors; Jiangsu liquor: Jiangsu King's Luck Brewery Joint-Stock benefited from continuous market share gains in the hundred-yuan price band single products (continuing the H1 trend), with smooth collections; 26Q3 revenue/profit growth is expected to achieve positive growth; Jiangsu Yanghe Distillery, still with "destocking" as the main theme, is expected to face slight year-on-year pressure on 26Q3 performance. Subsequent tracking indicators: high-end liquor wholesale prices / mass banquet sell-through performance / high-end liquor sell-through performance / inventory digestion speed, etc. Investment recommendations Capital rotation / sell-through-wholesale price trends (eps) are the sector's core DRIVE; under the "balanced allocation" direction, the bank believes: Kweichow Moutai's strong momentum continues to be released, the time point of maximum fundamental pressure in Q2 has passed, and it is the top pick in the balanced allocation line. Regional liquor names that are the first to emerge from the performance adjustment period: Jiangsu King's Luck Brewery Joint-Stock/Anhui Yingjiagongjiu/Anhui Gujing Distillery, etc. Risk warnings: consumption recovery weaker than expected; food safety risks; policy risks, etc.