The baijiu sector became one of the few core directions to move against the broader market trend in this morning's trading session.
At 10:12 during the session, Yingjia Distillery Co., Ltd. (not in the provided symbol list) was the first to lock at the 44.47 yuan limit up, Gujing Distillery Co., Ltd. (not in the provided symbol list) soared 9.72%, and first- and second-tier premium liquor names including Luzhou Laojiao Co., Ltd. (not in the provided symbol list), Huangtai Liquor Industry Co., Ltd. (not in the provided symbol list), Jinshiyuan Co., Ltd. (not in the provided symbol list), Shanxi Xinghuacun Fen Wine Factory Co., Ltd. (not in the provided symbol list), Wuliangye Yibin Co., Ltd. (not in the provided symbol list), and Kweichow Moutai Co.,Ltd. (ASX: 600519) all traded in positive territory.
Fund flows simultaneously showed a notable net inflow trend. Among them, Luzhou Laojiao Co., Ltd. (not in the provided symbol list) received a net inflow of 225 million yuan from main funds, while Huangtai Liquor Industry Co., Ltd. (not in the provided symbol list), Shanxi Xinghuacun Fen Wine Factory Co., Ltd. (not in the provided symbol list), Gujing Distillery Co., Ltd. (not in the provided symbol list), and Yingjia Distillery Co., Ltd. (not in the provided symbol list) also each recorded substantial net inflows, with turnover led by bellwethers including Kweichow Moutai Co.,Ltd. (ASX: 600519), Wuliangye Yibin Co., Ltd. (not in the provided symbol list), and Luzhou Laojiao Co., Ltd. (not in the provided symbol list).
In sharp contrast to the strength of the baijiu sector, the Shanghai Composite Index opened 1.25% lower in the morning session and, despite some recovery, remained down 0.77%. The ChiNext Index opened 3.29% lower, with CPO, copper-clad laminate, and semiconductor computing hardware sectors leading the declines collectively, as sharp overnight drops in South Korean equities and core semiconductor leaders further intensified sentiment divergence on the board. This stark divergence between the concentrated retreat in the computing power industrial chain and the counter-trend rise in the baijiu sector coincided precisely with the baijiu industry having just experienced its worst quarter of earnings in the third-quarter reporting season.
Core product prices were the first to release bottoming signals. As of October 25, the wholesale prices for full-case and loose-bottle Feitian Moutai were maintained at 1,720 yuan and 1,700 yuan respectively, with a relatively limited post-holiday decline, while the price centers for Puwu and high-degree Guojiao 1573 also remained stable. As the industry's price bottom was basically established, the channel's willingness to take on inventory gained a realistic foundation.
During this period, partial bright spots also emerged in the already-disclosed financial report structure. Yingjia Distillery Co., Ltd. (not in the provided symbol list) saw its third-quarter net profit attributable to shareholders rise 8.58% year-on-year, making it the best-performing name among disclosed liquor companies, and it hit a strong limit up in the morning session.
At the same time, channel inventory data saw a temporary reverse marginal improvement. Brokerage surveys showed that inventory at liquor merchants in multiple regions fell 10% to 20% year-on-year, terminal inventory was compressed to a level of one to two months, and the turnover efficiency of major premium liquor single products accelerated somewhat. This also marked the first substantive decline in channel inventory after five consecutive peak seasons of declining sell-through.
From the perspective of valuation and micro-level chip structure, the sector as a whole is at an extremely low historical percentile. As of September 30, the baijiu sector's price-to-earnings ratio (TTM) had fallen to the low level of the 15th percentile over the past decade, and active equity funds' allocation coefficient for the industry also touched a historical bottom.
However, the income statements of most baijiu companies still present a grim reality. Top liquor companies including Luzhou Laojiao Co., Ltd. (not in the provided symbol list), Gujing Distillery Co., Ltd. (not in the provided symbol list), Yanghe Brewery Joint-Stock Co., Ltd. (not in the provided symbol list), and Wuliangye Yibin Co., Ltd. (not in the provided symbol list) all posted significant year-on-year declines in third-quarter revenue and net profit, with some small and medium-sized liquor companies even recording single-quarter losses. Goldman Sachs estimates indicate that total industry revenue fell about 6% year-on-year in the third quarter, confirming the typical current market characteristic of "price repair leading volume repair."
At the individual stock level, the pattern of gains and the marginal changes in current financial reports formed a clear correspondence. Yingjia Distillery Co., Ltd. (not in the provided symbol list), with the best net profit growth, led the entire sector, while Yanghe Brewery Joint-Stock Co., Ltd. (not in the provided symbol list), which saw widening losses, became the only name in the sector to close lower. For some names represented by Luzhou Laojiao Co., Ltd. (not in the provided symbol list), their pricing logic mainly relied on valuation safety margins and the extent of prior oversold conditions, with on-market funds showing a tendency to rank by expectations of financial report bottoming.
In terms of the distribution of gains, first-tier leaders such as Kweichow Moutai Co.,Ltd. (ASX: 600519) and Wuliangye Yibin Co., Ltd. (not in the provided symbol list) saw relatively restrained gains, while second- and third-tier elastic names were more active. This market ranking suggests that the current rally is driven more by trading-oriented funds rather than typical allocation-oriented funds aggressively building positions.
The causes of the substantive destocking in channel inventory need to be calmly distinguished. Existing financial and survey data indicate that the easing of inventory pressure mainly stems from supply-side contraction, as liquor companies proactively tightened shipments and distributors stopped stockpiling, rather than a comprehensive expansion of real terminal sell-through. Financial reports show that contract liabilities of major liquor companies fell sharply, and supply-side contraction can fully explain the temporary decline in inventory. At the same time, high-end and low-end sell-through remained relatively stable, but business demand in the 300 to 700 yuan sub-high-end segment still showed double-digit declines, and Moutai's stabilization does not mean that overall industry demand has completed a full recovery.
Overall, the rally is essentially an oversold repair at the valuation and chip levels and has not yet formally entered a stage of fundamental prosperity reversal. Its repair support comes from a solid price bottom and extremely low institutional positions, while a true future reversal must be premised on a recovery in terminal demand.
The timing of the rally's trigger is directly related to the macro fund structure. Facing concentrated clearing and sharp declines in high-level chips in the computing power industrial chain, the baijiu sector, with advantages including a low position, low institutional holdings, and verifiable marginal changes, naturally became an important destination for on-market funds to rotate from high to low and rebalance.
Looking ahead, whether the rally can continue still requires final confirmation from both actual Double 11 sell-through and Spring Festival opening-redemption payment data. Before these core data points materialize, the height of the sector's rise depends on the firmness of core wholesale prices, while its sustainability depends on the progress of institutional position replenishment. The baijiu industry's financial reports are still continuing to seek a bottom, while share prices are the first to test the right side, and the reasonableness of the rebound is built on price bottoming and historically low positions.
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