CITIC Securities: Strong willingness to replenish inventory in liquor terminal, and residents' consumption resilience exceeds expectations.

The report from CITIC Securities stated that the sales of Baijiu (Chinese liquor) are gradually heating up as the Spring Festival approaches. Considering that the 2026 Spring Festival holiday will be one day longer than in 2025, and the resilience of consumer spending during important holidays such as the Spring Festival, it is anticipated that during the Spring Festival, Baijiu consumption will be mainly driven by residents returning home to reunite and drink. With the longer holiday period, there is a favorable opportunity for increased Baijiu consumption. Overall, the performance of Baijiu sales during the peak season of the 2026 Spring Festival is expected to be stable and better than market expectations. The Baijiu industry has been adjusting for many years, and it is currently at the base of a long cycle. Although it is still difficult to pinpoint a clear turning point, under the circumstances of a solid fundamental base, low market expectations, and low positions, any marginal improvements are expected to significantly boost investment sentiment in the sector. It is optimistic about the recovery of the Baijiu sector. It is recommended to increase investment in the Baijiu industry when prices are low. Additionally, considering the proximity to the Spring Festival and Lantern Festival, some high-quality liquor companies may experience short-term strong demand for terminal replenishment.