Bullish on long-term performance of the Baijiu sector!
Regarding the sharp adjustment of Baijiu (China’s distilled liquor), institution pointed out that the recent correction in the Baijiu sector was mainly due to the statements from the Sugar and Wine Fair, fund preferences, and the release of macro data for March.
1) Gefund pointed out to focus on moderate recovery of consumer spending and the long-term performance of the Baijiu sector.
From a valuation perspective, the current valuation of the Baijiu sector has fallen to below the five-year median.
From a fundamental perspective, various factors are unlikely to deteriorate further on a month-on-month basis in the future.
2) China Merchants Securities Baijiu Fund stated that from a longer-term perspective, under the trend of consumption upgrading, Baijiu sector still has good value.
Since mid-March, the industry has gradually entered the off-season, and the marginal trend has become stable.
From May to June, with the recovery of banquet demand, the performance is expected to further improve.
In the second quarter, the low base period, coupled with the release of business and banquet demand, the pace of recovery is expected to gradually materialize, which will have a positive impact on the sector's expectations and sentiment.
3) Research report from CITIC Securities believes that investment focus should shift from real estate wine to high-end wine.
In the current time point, the business banquet market is expected to pick up in the future, and high-end and second-tier brands are expected to benefit more.
Considering the elements of sales, reports, valuations, etc., the firm believes that after the first-quarter report, second-tier brands may be more favorable. The firm will continue to focus on Kweichow Moutai, Wuliangye, Shanxi Xinghuacun Fen Wine, Luzhou Laojiao, Gulinggongjiu, Jiu Shi Yuan, and Yanghe shares, and choose the right timing to lay out the second-tier Baijiu.
If you are interested in the Baijiu industry and want to share its development dividends, then the Baijiu ETF $EFUND LIQUOR(03189)$ is a good choice.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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