In the morning session of November 2, the baijiu sector extended the previous trading day's strength. By 9:40, Kweichow Moutai Co.,Ltd. (ASX: 600519) was quoted at 1,428.35 yuan, up 2.61%, with an intraday high of 1,432.06 yuan, reclaiming the 1,400 yuan level and hitting a more than six-month high. Huangtai Liquor hit its second consecutive limit-up, Gujing Gongjiu rose 5.24%, Shede Spirits gained 3.89%, Luzhou Laojiao climbed 3.62%, Shanxi Fenjiu advanced 2.13%, and Wuliangye added 1.06%, with first- and second-tier famous liquors rising across the board. (Kweichow Moutai share price trend; Gelonghui)
Capital flows showed a simultaneous and notable net inflow. The liquor industry index rose 2.18%, topping the morning session's sector gainers; main-force net inflow reached 5.138 billion yuan, with an inflow rate of 19.89%, both ranking first among sectors in capital flow direction.
The trigger for the rally came from the third-quarter report released the previous evening. Kweichow Moutai's third-quarter operating revenue was 41.006 billion yuan, up 3.0% year on year; net profit attributable to shareholders was 19.951 billion yuan, up 3.78% and up 15% quarter on quarter. This earnings report single-handedly overturned the previously widespread pessimistic market expectation of "flat revenue and declining profit." Among the highlights, direct-sales channel revenue in the quarter reached 21.812 billion yuan, surging 40.31% year on year, raising its revenue share to 54.21%; the digital marketing platform "iMoutai" contributed 18.299 billion yuan in the quarter, with a net profit margin as high as 48.65%.
Looking at the industry reports disclosed so far, the year-on-year data under the base effect remains severe. Luzhou Laojiao's revenue and net profit attributable to shareholders for the first three quarters fell 36.58% and 47.31% year on year, respectively. Gujing Gongjiu's quarterly net profit fell more than 60%, and Yanghe's quarterly revenue decline also exceeded 60%. However, the direction of marginal improvement was clearly reflected on a quarter-on-quarter basis. Luzhou Laojiao's third-quarter net profit attributable to shareholders reached 1.332 billion yuan, doubling from 631 million yuan in the second quarter; Shede Spirits recorded quarterly net profit of 49.55 million yuan, successfully turning profitable quarter on quarter.
Yingjia Gongjiu presented even more complete financial details. The company achieved quarterly revenue of 1.413 billion yuan, up 4.25% year on year; net profit attributable to shareholders was 414 million yuan, up 8.58% year on year. Contract liabilities at period-end increased by 30 million yuan from the end of the second quarter, and operating net cash flow reached 516 million yuan. The ability to still secure dealer payments at a stage when industry willingness to make payments is weak is a signal with more substance than quarterly book profit. Wuliangye demonstrated another strategic trade-off of proactively shrinking its balance sheet. The company's third-quarter operating net cash flow turned positive from negative to 2.2 billion yuan, while contract liabilities and receivables financing decreased by 1.5 billion yuan and 6.5 billion yuan quarter on quarter, respectively. Liquor companies proactively tightening the pace of collections and prioritizing helping channels destock became the main reason for the temporary pressure on quarterly book profit.
The wholesale price performance of core flagship products has already taken the lead in releasing a solid bottoming signal. Feitian Moutai's full-case wholesale price held firmly at the 1,700 yuan mark, with loose bottles around 1,710 yuan; Wuliangye's Puwu stabilized at 760 to 780 yuan, and high-degree Guojiao 1573 remained at 810 to 830 yuan. Although the average terminal retail price edged lower for three consecutive trading days, the single-day decline has clearly narrowed at the margin. The inventory structure on the channel side also recorded a reverse marginal improvement.
Liquor merchants in multiple regions saw inventories fall 10% to 20% year on year, the terminal inventory cycle compressed to one to two months, and the overall turnover efficiency of famous liquor flagship products accelerated. This is the first substantive decline in channel inventory pressure after the industry experienced five consecutive peak-season sales declines. The downward slope of macro demand has likewise shown signs of slowing. During the 2026 Mid-Autumn and National Day holidays, overall industry sales fell about 10% year on year, showing a gradual clearing pattern compared with declines of 30% in 2024 and 20% in 2025. On October 30, the National Development and Reform Commission made clear it is studying and formulating an implementation plan for the strategy of expanding domestic demand, providing a macro expectation backstop for terminal demand.
In terms of price-band structure, the divergence of "strong at both ends, weak in the middle" has become further entrenched. Feitian Moutai still maintained double-digit year-on-year growth in sales across multiple regions, making it one of the very few ultra-high-end products with positive-growth resilience; mass consumption below 100 yuan remained stable on rigid self-drinking demand; while the 300 yuan to 700 yuan sub-high-end range faced the heaviest pressure, with related names posting mid-range gains. During JD.com's famous liquor opening promotion, transaction value rose 30% year on year, with Kweichow Moutai and Luzhou Laojiao recording high growth of 23% and 35%, respectively. Although the surge in e-commerce sales came with short-term price volatility caused by some concentrated discounts, the actual absorption capacity of terminal consumption still objectively exists.
As of the close on October 30, the CSI Baijiu Index's trailing price-to-earnings ratio stood at the 24.14th percentile of the past decade, while its price-to-book ratio was at an extremely low percentile of about 5% over the past decade. The sector's overall dividend yield reached 4.45%, with names such as Luzhou Laojiao, Shanxi Fenjiu, and Gujing Gongjiu all exceeding 4.6%, forming the widest historical spread against the 10-year government bond yield of around 1.6%. The micro-level chip structure has also reversed. In the third quarter, active equity funds' heavy holdings in the food and beverage and baijiu sectors rose 0.67 and 0.42 percentage points quarter on quarter, respectively, ending the previous unilateral reduction trend that lasted multiple quarters. However, after excluding four top institutions, the baijiu sector remained in an overall underweight state for a ninth consecutive quarter.
Taking the multi-dimensional market evidence together, the price bottom and inventory bottom have been basically confirmed, while the true establishment of a demand bottom still awaits observation. The core verification point ahead will point entirely to the Spring Festival consumption season. The collection progress of opening-presale payments is the only core credential for upgrading the current reporting bottom into a medium- to long-term trend bottom. With wholesale prices holding the 1,700 yuan mark and dividend yields maintained above 4%, the baijiu sector already offers a relatively high downside safety margin.
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