The Zhitong Finance App learned that Tianfeng Securities released a research report saying that during the Spring Festival in '24, the overall performance of the liquor industry was stable and strong internal differentiation (in line with expectations), the expected volume was close to flat year, prices remained weak (consumption upgrades and downgrades also existed, and the momentum for internal upgrading of popular wine was still strong), “stable channel profit” + “excellent marketing performance” and “excellent marketing performance” were excellent. “Good start” added another brick to their probability of reaching their annual performance targets.

The liquor industry is still concerned about three main lines: ① It has α, that is, performance stability: Kweichow Moutai (600519.SH) /Shanxi Fenjiu (600809.SH) /Gujing Gongjiu (000596.SZ) /Luzhou Laojiao (000568.SZ) /Jinshiyuan (603369.SH), etc.; ② There may be potential marginal changes: Wuliangye (000858.SZ) /Yanghe (002304.SZ), etc.; ③ beta main line: Shede Liquor () /Shuijingfang (US) /Liquor (600702.SH 600779.SH 000799.SZ) etc.

Tianfeng Securities's main views are as follows:

Consumption situation during the Spring Festival: Judging from data such as delivery/food/movies/tourism, etc., double-digit year-on-year growth was achieved, laying a good foundation for the sale of liquor during the Spring Festival.

Exceed expectations point 1:

More companies with alpha wine have completed their Spring Festival repayment goals. The 24 Spring Festival payout side was clearly divided, showing three major characteristics: ① Early: The Spring Festival in '24 was relatively late, and wine companies generally started a good repayment in November-December. ② Steady: Although the Spring Festival payment was early in '24, the overall payment pace was stable (the completion progress of leading wine companies was in line with expectations). ③ Differentiation: Differentiation of payment progress; differentiation of payment methods.

Exceeding expectations point 2:

The actual Spring Festival sales may be better than the market's previous pessimistic expectations. There is a clear differentiation in sales during the Spring Festival, showing two major characteristics: ① Volume level: Sales performance is expected to lag behind at the price of 500-800 yuan during the Spring Festival in '24, while sales of high-end wine/popular wine are still expected to grow. Overall sales are expected to be close to the same period last year. ② Differentiation: The price differentiation is obvious. In terms of price, high-end wine/popular wine sales were good in '24: the pre-sale price of high-end wine festivals helped supplement channel profits and stabilize the price market and accelerate sales; popular wine benefited from wineries drastically increasing marketing costs for marketing and consumers (scanning red envelopes, etc.), making strong brand wine companies have excellent sales performance.

Exceeding expectations point 3:

Price stability after the holiday season slightly exceeded expectations. Price differentiation during the Spring Festival was obvious, with stable post-holiday performance, and inventory remained normal: after experiencing a decline in batch prices in early January, the price trend continued to rise and repayments for some brands accelerated for 1-2 weeks before the holiday season. After the holiday, lot prices declined normally, overall price performance was stable & inventory was in a normal range.

Thought 1's outlook 24Q1:

Judging from the repayment progress, based on the actual repayment rate of high-end wine/regional liquor more exceeding expectations, considering the overall normal/low performance base of the 23Q1 sector, large differences in payout rhythm+inventory health differentiation + differentiation between regions and performance differentiation between scenarios, Tianfeng Securities expects a good performance of high-end liquor & Huijiu & Fenjiu. Although the base for high-end liquor 23Q1 is generally low, some wine companies still face the problem of high inventory+weak sales and slightly high repayment pressure.

Think about the significance of the price increase for famous wine 2 & whether there will be a wave of price increases in the future:

① Previously, Kweichow Moutai proposed factory prices were more about solving the problem of unreasonable channel profit distribution, while Wuliangye/Jiannan Spring Festival pre-pricing meant more about solving price inversion issues/promoting payback/boosting channel confidence/sorting out the price market; ② the price increase before the famous wine festival is more significant than before the holiday season. It is expected that some popular brands may raise price/upgrade during the off-season (Q2) to ensure strong market competitiveness.

Risk warning: oversupply; food safety risks; weak demand; increased competition for homogenized products in the market.