Baijiu stocks strengthened again during early trading on February 2, with Huangtai Wine Industry hitting the daily limit-up increase, while Sichuan Swellfun Co.,Ltd. and Jinhuiqu Co.,Ltd. rose over 5%. Among the leading baijiu stocks, Wuliangye Yibin Co.,Ltd., Kweichow Moutai Co.,Ltd., and Shanxi Xinghuacun Fen Wine Factory Co.,Ltd. gained over 2%, whereas Luzhou Laojiao Co.,Ltd. and Yanghe Brewery JSC Ltd. advanced more than 1%.
The peak Spring Festival season is drawing ever closer.
On the news front, recent fluctuations and a rebound in the wholesale price of Moutai liquor, coupled with the approaching historically long Spring Festival holiday, have provided some support for baijiu stocks.
A CITIC Securities research report stated that the baijiu industry is about to enter its Spring Festival peak season marketing activities. The industry may refocus on market cultivation and consumer education under new reforms and directions, promoting actual consumption from opened bottles and reducing the burden on distributors. Comprehensively considering factors such as the gradual stabilization of sales, the extra day in the 2026 Spring Festival holiday, and various baijiu consumption scenarios during the period, it judges that actual baijiu sales during the 2026 Spring Festival are expected to remain stable.
Expectations for favorable policies are strengthening.
Beyond the boost from the Spring Festival holiday, the recent policy environment facing baijiu stocks has also shown improvement. SDIC Securities pointed out that baijiu is a typical pro-cyclical industry; its market pricing, besides considering its own fundamentals, is also inseparable from two key external factors: domestic demand and the real estate market's performance.
Senior leadership has placed boosting domestic demand at the forefront of important planning and work. On January 20, senior leadership indicated that 2026 would involve researching, formulating, and issuing an implementation plan for the 2026-2030 strategy to expand domestic demand, providing a clear timeline for the policy.
Simultaneously, after years of adjustment, the real estate market is gradually bottoming out. The release of the document "Improving and Stabilizing Real Estate Market Expectations" on January 2 officially acknowledged that "real estate carries significant financial asset attributes, with strong linkages, wide involvement, and high social attention," and proposed "adopting more forceful and precise measures to strengthen macro-control of the real estate market, continuously improve and stabilize real estate market expectations, minimize the adjustment period, and smooth out market fluctuations."
Furthermore, it was reported that many real estate developers are no longer required to report the "three red lines" indicators monthly; only some financially distressed developers are required to regularly report financial indicators like the asset-liability ratio to special task forces in their headquarters' cities. A series of actions indicate that changes are occurring in both domestic demand and real estate, representing significant positive developments for the baijiu industry.
Public fund allocations have reached a historical low point.
Additionally, as baijiu stocks have trended lower with volatility over several years, voices suggesting they now offer good value have begun to emerge. From the perspective of public fund allocation, as of the end of 2025, the proportion of public fund holdings in the baijiu sector fell to 3.93%, sitting at the 23.4th percentile historically, with the overweight ratio nearing a historical low. This provides ample room for capital to flow back, supporting the current rebound.
Renowned investor Duan Yongping recently voiced his opinion, stating that from a long-term perspective, the current share price of Moutai is "truly not expensive." He expressed strong optimism about the i Moutai app's direct sales initiative for Feitian Moutai, noting that this model addresses at least two issues: firstly, it tackles the problem of counterfeit alcohol, unleashing purchasing power that is difficult to imagine; secondly, it addresses the issue of high prices, which also releases substantial purchasing power.
Duan Yongping previously revealed on social media his plan to increase his holding by 20,000 shares of Kweichow Moutai Co.,Ltd. at 1,365 yuan per share, involving approximately 27.3 million yuan. He emphasized that Moutai being "not expensive" is based on a long-term holding perspective (5-10 years), with the core logic lying in its irreplicable brewing conditions (Chishui River water, local red-tasseled sorghum, over five years of aging) and the i Moutai platform's systematic management of channel irregularities.
Could valuation rebound ahead of earnings?
Based on the disclosed 2025 performance forecasts, baijiu stocks' earnings are clearly under pressure. For instance, Anhui Kouzi Distillery Co.,Ltd., Sichuan Swellfun Co.,Ltd., Yanghe Brewery JSC Ltd., Tianyoude Liquor, and Huangtai Wine Industry have pre-announced decreases in earnings; Jiugui Liquor Co.,Ltd., Beijing Shunxin Agriculture Co.,Ltd., Anhui Golden Seed Winery Co.,Ltd., and *ST Yanshi reported losses for 2025.
Although earnings are under pressure, some institutions believe that valuation might recover ahead of earnings. A Tianfeng Securities research report indicated that the current baijiu sector adjustment has lasted about 5 years, with industry valuations and institutional positioning now at historical lows. While the market is generally pessimistic about the baijiu sector, a subsequent recovery in industry fundamentals will still require support from a rebound in external macro demand. Under the current stock market backdrop, share prices could potentially bottom out ahead of fundamentals. The sector might be in the final stage of a fundamental clearing-out, with the stabilization of Moutai's wholesale price being a positive signal of marginal improvement; sector valuation repair may lead the recovery in earnings.
A China Securities research report expressed the view that the industry is expected to bottom out in 2026, with leading companies' market share increasing, and it is optimistic about the baijiu sector potentially presenting a once-in-a-decade low investment opportunity around the Spring Festival. Currently, baijiu sector valuations are at historical lows, possessing strong value for bottom-fishing allocation, while also paying attention to potential catalysts from consumption policies. The logic for bottom allocation centers on shedding the burden through earnings clearing, strong brand support for sales, robust operations empowering channels, and exploration of new marketing models.
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