The Zhitong Finance App learned that Fangzheng Securities released a research report saying that the liquor sector has decelerated since Q2, and the focus of off-season wine companies has shifted to maintaining the industry's price system, controlling prices and maintaining healthy channel circulation. Q3 and Q4 are expected to continue the financial reporting risk release trend. Fundamentals are being refined, and differentiation between brands has intensified. In terms of price, the 24Q3 high-end liquor business was steady, and the differentiation between sub-high-end and regional liquors intensified. Looking at the current outlook, the bottom has been formed under multiple policy catalysts, and sector dividend dividends have a comparative advantage. As overall economic expectations improve, there is still room for repair in the valuation center of liquor as a high-quality procyclical asset.

The main views of Fangzheng Securities are as follows:

Revenue growth slowed in 24Q3, and the sector actively controlled the speed to release channel pressure.

Looking at the overall performance of the sector, under the weak recovery of the overall consumption environment, 24Q3 continued the 24Q2 deceleration trend. According to CS liquor sector data statistics, 24Q3 liquor sector listed companies achieved total revenue of 96.5 billion yuan/0.8% year-on-year increase, achieving net profit to mother of 36 billion yuan/2.1% year-on-year increase; after excluding the rest of Maotai, 24Q3 achieved comprehensive revenue of 56.8 billion yuan/7.5% year-on-year decrease, achieving net profit to mother of 16.9 billion yuan/8.1% year-on-year decrease. Overall, with weak macroeconomic demand recovery compounded by high price pressure in the industry, wine companies actively adjusted the channel system and controlled the pace of delivery and growth during the off-season. The sector's revenue and profit both achieved positive growth, and the year-on-year growth rate in a single quarter slowed significantly.

The report accelerates the refinement of the fundamentals of the clean-up sector, intensifies fragmentation within the brand, and expects positive economic recovery after the implementation of subsequent policies. After risk release, we will focus on 25 years of corporate goal setting & demand improvement.

Fangzheng Securities believes that the liquor sector has decelerated since Q2, and the focus of off-season wine companies has shifted to maintaining the industry's price system, controlling price increases and maintaining healthy channel circulation. Q3Q4 is expected to continue the trend of risk release on the financial reporting side. Fundamentals are being refined, and differentiation among brands has intensified. In terms of price, the 24Q3 high-end liquor business was steady, and the differentiation of sub-high-end and regional liquors intensified. Combined with individual stock performance, high-end liquor>; leading regional liquor>; others (sub-high-end liquor = liquor from second- and third-tier companies, all showed significant internal differentiation).

High-end wine brands have an obvious siphon effect. High-end gift demand is relatively stable, and leading brands with strong channel brands have excellent cash flow performance and operating cash flow; sub-high-end is greatly affected by weak recovery in business banquets, etc., leading the growth, and other brand differentiation intensified; regional wine had a high growth base during the same period, and scenarios such as 24Q3 banquets declined relatively, but popular prices supported demand. Some regional leaders such as Gujing/Jinshiyuan/Jinhui Liquor had solid operating channel performance and share Stable, leading companies such as Yingjia/Yanghe take the initiative to control speed to release reporting pressure, The remaining brands are still in the process of product/channel/personnel adjustments and reforms.

Looking at the current outlook, the bottom has been formed under multiple policy catalysts. The current sector's PE-TTM is 20.4X, with a five-year quantile of 6%, which is a historically low level, and the sector's dividend dividends have a comparative advantage. As overall economic expectations improve, liquor is a high-quality procyclical asset, there is still room for repair at the valuation center. Follow-up attention is paid to setting corporate goals 25 years after the release of financial risk. In anticipation of supply-side deceleration and contraction, medium- to long-term tracking of the pace of improvement and transmission from the policy side to demand-side recovery.

The fundamentals of the sector are at the bottom, and we look forward to a positive economic recovery after the implementation of subsequent policies. Liquor has now become a representative pro-cyclical sector, which is highly correlated with macroeconomic recovery expectations. The industry shows squeezing growth, and differentiation is expected to further intensify. The liquor sector prioritizes steady management, highlights dividend asset attributes, and the valuation and sentiment base focuses on medium- to long-term development resilience.

It is recommended to focus on:

1) In the macroeconomic shift period, brand+channel is king. High-end wine Wuliangye (000858.SZ), Luzhou Laojiao (000568.SZ), and Kweichow Moutai (600519.SH) are expected to take the lead in recovering as the economy recovers.

2) Excellent performance among sub-high-end and regional leaders: the nationalization process of sub-high-end leaders accelerates, and fragrance potential enhances Shanxi Fenjiu (600809.SH); demand for banquets and gifts is expected to improve with the steady recovery of the economy, driving the recovery of operations, Shuijingfang (600779.SH), Shide Liquor (600702.SH); regional leaders stabilize the market+cost efficiency to release flexible profits and release Gujing Gongjiu (000596.SZ), Yuanjiao () (). 603198.SH 603369.SH

3) Companies focusing on the steady expansion of the region and the upgrading of regional consumption, focus on Jinhui Liquor (603919.SH), which will benefit from the rise in the low price band in the Gansu region in the next few years; 4) the clear trend of online alcohol sales expansion, focus on Xinhuadu (002264.SZ), a professional operating platform with strong supply chain advantages and a strong back-office operation base; 5) benefit from the steady expansion of the soy wine market in the future to bring room for improvement.

Risk warning: macroeconomic recovery falls short of expectations, consumer consumption recovery falls short of expectations, food safety risks, worsening industry competition, etc.