Maotai sales exceed expectations, triggering a surge across the entire baijiu sector: Is a decade-long bottom taking shape?

``` The baijiu sector is undergoing a long-awaited valuation recovery. Driven by the better-than-expected rise in Maotai’s wholesale price, the baijiu sector, which has been adjusting for nearly five years with both valuation and institutional holdings at historic lows, may be forming a decade-level market bottom. Today, the baijiu sector continued to soar, with the CSI Baijiu Index up 1.94%, Wuliangye up more than 2%, and Maotai up 1.6%. On January 29, the baijiu sector skyrocketed, with the CSI Baijiu Index surging 9.8% in a single day, Guizhou Maotai up 8.61%, 18 baijiu stocks reaching the daily limit, and the sector’s main funds net inflow exceeding 6 billion yuan. On January 30, the original case wholesale price of Feitian Maotai rose to 1,710 yuan, up 55 yuan from January 26, while the wholesale price of loose bottles reached 1,570 yuan. Terminal retail prices in many regions rebounded to 1,700–1,800 yuan, and iMaotai’s 1,499 yuan standard-price bottles continue to sell out. Original case 50-year-old vintage liquor rose 1,000 yuan daily to 25,500 yuan; the Bingwu Year of the Horse zodiac liquor rose 250 yuan daily to 2,950 yuan, with scarcity premiums released markedly. CITIC Securities believes that the core driving force of this round of surges is Maotai’s better-than-expected sales and wholesale price performance, combined with the capital market’s approval of Maotai’s price marketization reform, as well as macro factors like the relaxation of real estate policies and the anticipated turn of PPI. The market is seeing marginal changes in its pessimism toward the baijiu sector. Wholesale price stabilizing and rebounding, sales outperforming expectations Maotai’s wholesale price surge triggered this rally. Since New Year's Day, Maotai sales have achieved positive year-on-year growth, with some channels reporting double-digit increases. January’s payments and deliveries are estimated to be 25%–30%, slightly faster than last year. With the Spring Festival peak season approaching, concentrated demand is being released, creating a short-term supply shortage. Quotas for distributors in January and February are basically sold out, and scarcity premiums for high-end products such as vintage liquor and zodiac liquor are noticeable. Maotai’s wholesale price rose rapidly from a low of 1,600 yuan at the beginning of the year. On January 29, the daily wholesale price of Feitian soared 100 yuan from 1,600 to 1,700 yuan. On January 30, it continued to rise, with the original case and loose bottle wholesale prices reaching 1,710 yuan and 1,570 yuan, respectively. Original case 50-year vintage liquor rose 1,000 yuan in a single day; zodiac liquor for the Year of the Horse rose 250 yuan. According to Tianfeng Securities, iMaotai’s expansion into new consumer groups may be the core reason for the price increase. The launch of iMaotai enabled ordinary customers to purchase genuine Feitian Maotai at standard prices, releasing demand potential. Maotai is promoting market-oriented reforms by eliminating the bundling policy for non-standard liquor, allowing distributors to avoid being forced to buy loss-making products and significantly easing their financial pressure. Previously, the market worried that price increases prior to Spring Festival were a short-term phenomenon, and prices would drop afterwards. But Tianfeng Securities believes that since Maotai's total supply in 2026 likely won’t significantly increase, if shipments before the Spring Festival are large, subsequent off-season supply decreases could ease pressure and wholesale prices may exceed market expectations. Multiple factors resonating, reform effects emerging CITIC Securities points out that the current surge in the baijiu sector is the result of multiple overlapping factors. Besides the recovery in Maotai’s wholesale prices, marginal improvements in the macro environment are also crucial. Signs of relaxation in real estate policies have appeared. Property developers are no longer required to report “three red lines” indicators monthly, and policy tone has shifted from tight to loose. Tail signals in deals in first- and second-tier cities have emerged, and expectations of a property market bottom are rising. High-end baijiu consumption is closely related to real estate cycles, so improved property expectations support baijiu demand. Expectations for PPI turning positive are gradually forming. Prices for industrial raw materials such as metals, chemicals, and oil & gas are rebounding; precious metals like gold and silver are also rising, driving expectations for a positive PPI. High-end baijiu prices are strongly correlated with PPI, and the transmission effect of industrial product prices to consumption is starting to show. Maotai's price marketization reform is highly recognized by the capital market. The reforms aim to regain pricing power for baijiu products, break traditional channel and pricing constraints, and build more dynamic channel incentive mechanisms. Market style rotation is also causing fund flows. In a bull market, the baijiu sector, with valuations at historic lows, is attracting capital attention. On January 29, net financing purchases of Maotai exceeded 2.8 billion yuan, with sector fund inflows over 6 billion yuan. When Maotai is stable, the whole industry benefits. Previously, Maotai’s wholesale price declines led to concerns that others would follow suit. Now, it appears that supply and demand for Maotai may reach balance faster than expected, reducing the risk of an overall price drop for the industry. Historic low valuations highlight allocation value The baijiu sector has adjusted for about 5 years, with current valuation and institutional holdings at historic lows. By the end of 2025, 1,048 funds are heavily invested in Guizhou Maotai, holding about 118.203 billion yuan in total market value, but Maotai is the only consumer stock in the top ten fund holdings. According to Tianfeng Securities, the baijiu sector’s valuation is at historically low levels, with strong bottoming allocation value. Although the market is currently pessimistic about baijiu overall and fundamental improvement still requires a macro demand recovery, in a bull market, share prices may bottom ahead of fundamentals. By company type, high-end and stable leading baijiu companies will benefit first from the recovery of business and gift consumption due to their strong brand power and rigid demand, with high earnings certainty. These companies can gain from valuation recovery and offer dividend yields above 3% through stable operations. Sub-high-end and regional flexible baijiu companies, thanks to deep market roots and refined operations, are set to increase share as banquet and mass-consumption demand improves. Some companies focusing on optimization and product innovation may expand markets, and if interim optimization is effective and sales exceed expectations, they could reap excess returns. Industry turning point approaching, long-term logic restructuring The baijiu industry is still in its final cleanup stage, but signals of a turning point are appearing. CITIC Securities believes that, based on the sector’s development stage, the industry may bottom out in 2026, pressure on channel inventories will decrease, and the toughest times of alcohol restriction policies have passed. Maotai’s wholesale price stabilizing and rebounding is a positive sign. Although macroeconomic pressure and the lingering effects of alcohol restriction will still make Spring Festival baijiu consumption difficult this year, the key marginal change for the sector is Maotai’s surprising wholesale price rise. CITIC Securities believes that the baijiu sector’s valuation is currently at a historical low, with strong bottoming allocation value. With attention to consumption policies as a catalyst, there may be a decade-bottom investment opportunity around the Spring Festival. Risk factors still merit attention. Slower-than-expected macroeconomic recovery, weaker-than-expected end sales, and intensifying sector competition could affect performance. But from the perspectives of current valuations, policy environment, and industry cleanup progress, the baijiu sector’s risk-return profile is improving. Risk warning and disclaimer The market has risks, and investments should be made with caution. This article does not constitute personal investment advice and does not take into account specific investment goals, financial situations, or needs of individual users. Users should consider whether any opinions, viewpoints, or conclusions herein are suitable for their particular situation. Investment decisions made on this basis are at your own risk. ```