On September 12th, the baijiu stocks fell across the board.

As of press time, Shanghai Guijiu hit the limit down; Kweichow Moutai fell more than 3% to 1338.51 yuan, reaching a new low since November 2022. In addition, Anhui Gujing Distillery, Jiangsu King's Luck Brewery Joint-Stock, Shede Spirits, Luzhou Laojiao, Wuliangye Yibin and other stocks all declined.

Since the beginning of the year, baijiu stocks have been consistently declining, with a cumulative decline of over 35% so far.

The peak season of the Mid-Autumn Festival is not prosperous.

September and October are considered the peak season for baijiu sales due to the presence of two traditional festivals, the Mid-Autumn Festival and National Day. It is also known as the "Golden September and Silver October". Data shows that during the sales period of the Mid-Autumn Festival and National Day, baijiu sales usually account for 20% to 30% of the annual sales of liquor companies.

Compared to previous years, major liquor companies have started their Mid-Autumn Festival promotion activities half a month earlier than usual.

Some manufacturers have launched Mid-Autumn gift boxes. For example, Maotai has launched a Mid-Autumn cultural creative gift box, which not only includes two bottles of 200ml 53% Feitian Maotai liquor, but also comes with a specially designed telescope called 'Moon-watching Chenzheng Mirror'. Yanghe has launched the Yanghe·Mengzhilan Mid-Autumn gift box, which includes a pair of 260ml custom edition Mengzhilan, as well as custom edition Quick Cup, playing cards, and a phone bracket.

In addition, major manufacturers have also carried out a variety of activities. For example, Jiugui Liquor, under the theme 'Mid-Autumn Reunion with Inner Reference', has launched a bottle cap exchange for a home banquet. Langjiu launched the 'Chinese Lang - Fujian Bobing Cultural Festival' for the Minnan region. Yanghe Corporation launched the 'Mid-Autumn Reunion with Yanghe, Win 10,000 Huawei Phones First' activity, using Huawei phones as prizes to increase consumer participation. Golden Seed Wine Industry has prepared a series of exciting events such as the Golden Seed Fuhexiang Star Concert, the Huaihe Poetry and Rhyme · Eurasian Poetry and Wine Culture Night, and the Huaihe Folk Customs · Intangible Cultural Heritage Night.

However, from the current sales situation, this 'golden September' is a bit cold. Many liquor companies, distributors, and retail stores have reported that it is not as prosperous as they expected. Some industry insiders predict that this year's Mid-Autumn sales will decrease by 20%-30% compared to last year.

The 'benchmark' Feitian Maotai liquor has currently fallen below the 2,600 yuan mark and continues to decline. According to the 'Today's Liquor Prices' quotation platform, on September 12, the wholesale price of Feitian Maotai in the original box for 2024 dropped to 2,550 yuan/bottle, and the wholesale price for individual bottles dropped to 2,380 yuan/bottle.

Guosen Securities stated that since the Spring Festival this year, the liquor industry has been facing a situation where peak seasons are not as prosperous and off-seasons are even quieter. Considering that the Mid-Autumn Festival and National Day are traditionally peak sales periods for the liquor industry, it is expected that terminal sales will be better than usual. However, it may be difficult to achieve high sales and the growth rate is expected to be lower than last year.

How much longer will this decline continue?

Currently, the baijiu market still faces a significant "high inventory" issue. The '2024 China Baijiu Market Mid-term Research Report' shows that compared to the same period in 2023, in the first half of 2024, over 60% of dealers and end retailers reported an increase in inventory, over 30% indicated facing cash flow pressure, over 40% mentioned an increase in the degree of the actual selling price inversion, and over 50% reported a reduction in profit margins.

The China Alcoholic Drinks Association points out that the alcoholic beverage consumption has entered a dual rationality era of 'consumption rationality + price rationality.' In 2024, facing the transformation period of alcoholic beverage consumption market, the alcoholic beverage industry has also entered a calm phase, with consumer demand slightly weak, the problem of 'high inventory' particularly prominent, and the characteristics of the stock era becoming more distinct.

Against this backdrop, the performance of A-share listed liquor companies continues to differentiate.

Top enterprises show stable performance. Kweichow Moutai, Wuliangye Yibin, and Jiangsu Yanghe Brewery Joint-stock ranked top three in revenue scale in the first half of the year, reaching 81.931 billion yuan, 50.648 billion yuan, and 22.876 billion yuan respectively, with year-on-year growth rates of 17.76%, 11.3%, and 4.58%. In terms of net income, Moutai attributed a net income of 41.696 billion yuan to shareholders of the listed company in the first half of the year, Wuliangye achieved 19.057 billion yuan, and Jiangsu Yanghe Brewery Joint-stock reported 7.947 billion yuan; with year-on-year growth rates of 15.88%, 11.86%, and 1.08% respectively.

However, some liquor companies saw a decline in performance. Jiugui Liquor achieved revenue of 0.994 billion yuan in the first half of the year, a 35.5% year-on-year decrease; net profit attributable to shareholders of the listed company was 0.121 billion yuan, down by 71.32% year-on-year. Shanghai Guijiu reported revenue of 0.191 billion yuan in the first half of the year, a 77.32% year-on-year decrease; net profit turned from profit to loss, with a net loss of 77.3776 million yuan.

Looking ahead, GTJA points out that the characteristics of baijiu consumption "moving away from real estate dependence" and "moving away from luxury" will continue to be prominent. In this dimension, 'market share is brand', companies can leverage their vertical product structure advantages, utilize strong channels, major brands, and large production capacity, employ suitable pricing strategies, and continuously compete with similar products.

Guoyuan Securities believes that in the past, baijiu prices were mainly driven by price increase and consumption upgrade logics. However, with the change in market consumption trends, consumer demand for cost-effectiveness has become a core requirement. Adapting to this change, the logic behind baijiu prices is evolving towards a dual rationality of consumption and price. The squeeze-driven growth logic remains, with a vast market space and strong consumption stickiness. Baijiu companies that can better meet consumers' cost-effectiveness in different circles, social interactions, and drinking will undoubtedly benefit more.

China Merchants Securities indicates that from a fundamental perspective, the Mid-Autumn Festival peak season effect has become increasingly less obvious in recent years. In this trend, it is more challenging to exceed demand expectations. However, this year, there has been a differentiation on the supply side, with more cautious placements of high-end and mid-range products compared to last year, along with relatively positive investments in real estate liquor policies. Considering the continuous adjustments in the capital markets recently, there are already pessimistic expectations. If the Double Ninth Festival can withstand the pressure test (stable implementation of price systems), there is potential for a stock price reversal.