On December 10, shares of Kweichow Moutai Co.,Ltd. fell below 1,400 yuan, marking their lowest level in nearly a year. The decline comes amid weakening wholesale prices for Moutai products, which have temporarily weighed on the broader liquor sector.
Huachuang Securities analyst Dong Guangyang's team noted that while wholesale prices for Feitian Moutai continue to seek a bottom, the stock has stabilized after nearly five years of adjustments. Institutional holdings have also dropped to decade lows, and the weakening correlation between stock and wholesale prices signals a potential bottom. Once Feitian wholesale prices stabilize and demand picks up, the stock could see improved performance.
CSC Financial recommends seizing the current low-price opportunity for strategic positioning. The firm highlights the sector’s bottoming valuation based on factors such as earnings normalization, strong brand-driven sales, operational efficiency, and new marketing models. It also suggests monitoring potential consumption policy catalysts in December ahead of the Spring Festival season. Meanwhile, consumer staples are expected to outperform liquor stocks, with opportunities in supply chain improvements, health-focused premiumization, and cost-cycle optimization.
ChinaAMC views non-bank financials, food & beverage, and agriculture sectors as undervalued alternatives for timely allocation. The market has largely priced in liquor sector earnings declines, and current policy headwinds may eventually act as a reversal catalyst. Investors can gain exposure via the Food & Beverage ETF (515170.SH), the largest ETF tracking the sector index with strong liquidity. The ETF holds top liquor players like Kweichow Moutai, Luzhou Laojiao, and Wuliangye, which account for nearly 60% of its weighting and may lead a sector rebound. It also covers condiments, dairy, beer, beverages, and snack leaders poised to benefit from domestic consumption recovery.
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